The Truth on Retirement Savings

Garrett Shinn, CPA

Most likely, you have heard financial experts provide various benchmarks and guidelines concerning retirement savings. But who should you believe?

Guidelines on how much to save often vary widely, and for good reason: when it comes to retirement savings, there is no “one size fits all” answer.

Although the guidelines of financial experts are often a good starting point, determining the amount that you really need to save for retirement is a more complex process, and must be handled on a case-by-case basis.

For instance, many experts suggest saving enough to replace 70% of your pre-retirement income. However, this percentage depends on the amount of your pre-retirement earnings. If your pre-retirement income is relatively low, you will need to save a larger proportion for retirement, since your cost of living will not change much. Likewise, if you earn a higher income before retirement, you will need a smaller percentage for retirement, as many of your current expenses will decrease or disappear later in your life. These expenses include taxes, your mortgage, the costs of raising your children, and etcetera.

Other factors play a role in determining how much to save as well, such as the age you will retire, how much you already have in savings, how long you expect to live, and the amount of medical expenses you will have to pay later in life. These variables are largely unpredictable, but nevertheless should be considered when you are deciding how much to save.
Due to the complexities and variables involved in retirement planning, it may be helpful to either consult your financial advisor or to use an online calculator, which will consider multiple variables at once.

If you have any questions, please contact the Shinn & Co team at or call 941.747.0500.