CNBC Calculates Monthly Savings Needed for Retirement Income Goals

Retirement savings strategies: CNBC calculates monthly savings needed for $60K-$80K annual income; tips to maximize 401(k) contributions in 2024; addressing widespread fear of running out of money in retirement.

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CNBC Calculates Monthly Savings Needed for Retirement Income Goals

CNBC Calculates Monthly Savings Needed for Retirement Income Goals

CNBC has calculated the monthly savings required to generate $60,000, $70,000, or $80,000 per year in retirement interest income without touching the principal. The calculations assume a 6% annual return while saving, a 3% return during retirement, and starting from zero savings at age 65.

To maximize 401(k) contributions in 2024, the article provides several tips, including setting specific goals, building an emergency fund, budgeting, and considering a side gig to increase income. It also emphasizes the importance of contributing regularly throughout the year to reach contribution limits, as employers may have earlier cutoff dates for adjustments.

For those working full-time and highly motivated to improve their financial situation, the article offers advice based on their current financial phase. When accumulating savings, it recommends reviewing subscriptions, diversifying investments, and contributing enough to tax-advantaged retirement accounts to meet goals. As retirement approaches, individuals should reevaluate their investment mix and consider alternatives like real estate or vacation homes. In the distribution phase, planning for required minimum distributions and reviewing tax implications is critical.

Why this matters: With 63% of Americans worrying more about running out of money than death, according to Allianz Life's 2024 Annual Retirement Study, understanding retirement savings strategies is more important than ever. The fear is highest among Gen Xers and Millennials, driven by factors such as inflation, inadequate Social Security support, high taxes, and low income.

The article also mentions a nonprofit budget coaching service in Melbourne, Florida, available to qualified individuals earning less than $89,600 per year. To address retirement savings concerns, respondents in the Allianz Life study suggested building up retirement savings, optimizing retirement account usage, and exploring various retirement plans with tax advantages.

Roth IRAs are highlighted as a valuable tool for tax-free investment earnings, but misunderstanding the rules or picking the wrong investments can be costly. Contributing to a Roth IRA in addition to an employer's retirement plan can provide more investment options and tax-free earnings, but income limits and withdrawal rules must be carefully considered to avoid penalties.

The Allianz Life's 2024 Annual Retirement Study underscores the widespread concern about running out of money in retirement, particularly among younger generations. "63% of Americans worry more about running out of money than death, up from 57% in 2022," the study reveals. Setting retirement savings goals and understanding the different options available for growing wealth efficiently are vital steps in addressing this fear and securing a financially stable retirement.

Key Takeaways

  • Monthly savings needed for $60K-$80K annual retirement income at 6% return
  • Tips to maximize 401(k) contributions in 2024: set goals, build emergency fund, budget
  • 63% of Americans worry more about running out of money than death, per Allianz study
  • Roth IRAs provide tax-free investment earnings, but rules must be understood
  • Widespread concern about running out of money in retirement, especially among younger