THE NEW RULES OF RETIREMENT SAVING • 113
Now let’s look at Edna Mae’s great-granddaughter, Rachel, in 1990. Rachel has nearly an 84 percent chance of making it to re- tirement age of sixty-five . ¹⁹ Much better. And she’s likely to live an average of twenty years in retirement, to age eighty-five. That’s a retirement that’s four times longer than her grandmother. So Rachel’s retirement savings better last about four times longer, too. And when you go to retire in 2020, or 2050, the numbers are going to be even higher. There’s a good chance you’ll live thirty or more years in retirement. That means your savings has to last dra-matically longer. Of course, the only way to completely eliminate longevity risk is to die young, and I’m certainly not advocating for that. Short of dying young, your best strategy is to make sure you save e nough money to support yourself for at least thirty years in retirement. How much money will that take? Give Me a Dollar Amount. Alright, I promised to help you figure out how much you need to accumulate by retirement. I’m going to keep to that promise. Below is a simple way to estimate how much you’ll need, in real dollar amounts, at age sixty-five to fund your retirement. I’ve bro- ken it down into two steps and included a worksheet area in each section where you can create an estimate for your own situation.
¹⁹ Social Security Administration. “Social Security History: Life Expectancy for Social Security.” http://www.ssa.gov/history/lifeexpect.html.
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