The money division of U.S. News notes that an individual can determine how much money he needs to save for retirement by calculating how much he needs to spend either every month or every year of retirement. An individual should also consider how much health care may cost him when he retires and make adjustments for the money that is no longer being saved for retirement.Continue Reading
Besides accounting for the money that is no longer being saved up for retirement, an individual should also factor in his payroll tax as well as any lifestyle changes that may be made upon retirement.
As of 2014, financial experts predict that a majority of individuals need roughly anywhere from 75 to 80 percent of income before retiring to retire in financial comfort, notes U.S. News. An individual should also factor in the recurring income he receives through Social Security, pension, royalties and rent if he owns real estate property or plans on renting out rooms.
It is best if the final calculation is either zero or a negative number after an individual's income has been subtracted from his expenses. If the calculation is positive, then there is more than likely an income gap that needs to be accounted for because a majority of retired individuals has more expenses to take care of than income, according to U.S. News.Learn more about Financial Planning