Two rules of thumb for retirement saving and spending


Editor’s note: Lawyer and car-buying expert Adam Goldfein fills in for Clark Howard Monday the 19th – Wednesday the 21st of this week. Below is a summary of some of what he discussed. Visit for more information.

How much do you need to be able to save in order to retire?

Regardless of income, there are two quick rules of thumb that Adam Goldfein advises.

  1. Spend only half of what you make in gross income before taxes. The other 50% is used for taxes and a little more than 15% left for retirement and savings.
  2. If you can put away 15% a year, you should have at least 12 times your household income after a working lifetime when you reach 65. If your money grows conservatively at 5% annually, you can then draw between 3% and 5% each year and have a 30-year supply of money during your retirement years.

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