The thought of retiring might be daunting.
Retirement usually entails replacing your annual salary with other income sources to keep up with your lifestyle. While Social Security may cover part of your budget, the rest of your money will most likely need to come from your savings and investments.
NerdWallet crunched the numbers, and we can tell you how much you need to save now to get $65,000 every year in retirement, without taking a bite out of your principal.
First, some ground rules. The numbers assume you will retire at age 65 and that you currently have no money in savings.
For investing, we assume an annual 6% return when you are saving and a more conservative 3% rate during your “interest-only” retirement. We also do not factor in inflation, taxes or any additional income you may get from Social Security.
Watch the video above to learn more.