Workers Think They'll Need $500,000 to Retire Comfortably. Are They Right?

Building a nest egg is easier if there was a universal savings amount that would guarantee financial security in retirement. There is no magic formula for financial security in retirement. The amount of money required to secure your retirement can vary from one person to the next.Imagine that your retirement goals include moving to a small community, starting a home-based baking business, and spending time in your grandchildren's backyard. It might be cheaper to retire in a smaller area than someone who travels internationally and lives in major cities every week.It may still be helpful to have a better idea of what workers today think is a good retirement savings goal. Transamerica has the answer. According to Transamerica's 21st Annual Retirement Survey of Workers, workers expect they will need $500,000 in savings to be financially secure when they retire.However, Gen Xers and Gen Zers believe they will be able to retire comfortably with $500,000 while baby boomers expect they'll need a median $750,000. The millennial generation is confident that they can make it with a median income of $300,000.What amount of money do you need to retire?Whatever generation you are, $500,000 may be a wise retirement savings goal. You may feel otherwise. There is no right or wrong answer.Instead of following the masses' opinions (or in this instance, the many thousand Transamericans surveyed), it is better to ask these questions. This will help you determine the amount of savings you should have to retire.1. How much will my monthly Social Security Benefit be? Can I increase it?The Social Security Administration will send you an annual earnings statement that includes an estimate of your future benefits. You will get a more accurate estimate the further you go in your career. However, even if it's not as precise, you can still use it to determine how much income Social Security will provide.There are steps you could take to increase your Social Security benefits. For example, if you delay filing your Social Security benefit application until 70 years old, you will receive a monthly salary for life. You can determine how dependent you will be on your savings and how much you should save by knowing what benefits you might be eligible for.2. 2. Am I putting money aside for healthcare?Healthcare is likely to be your largest retirement expense, if it's not the most important. However, if you aren't saving money for your future medical expenses, it can put pressure on your nest egg.A lot of workers have the option to save money in a health savings account (or HSA). If you are enrolled in high-deductible insurance, this option may also be available. You can carry the money from an HSA forward indefinitely. If you have exhausted your contributions and aren't taking withdrawals, you might not need to invest as aggressively in a 401k or IRA.3. What is the best place to retire?A $500,000 nest fund will be more valuable in some areas than it is in others. Your lifestyle choices can also impact how fast you spend your savings. However, where you choose to call home will determine how much you will spend.Spend some time looking for affordable places to retire. Be aware that not all states will impose a tax on Social Security benefits.Are you able to retire with $500,000?A $500,000 nest egg may prove to be a good investment for retirement. You may be disappointed if it is not enough. Instead of dwelling on the results from a single survey, you can use $500,000 as a guideline, and adjust it to suit your needs.You can also think about your expected ending salary and set a goal to save approximately 10 to 12 times this amount before you end your career. The $500,000 savings estimate might be reasonable if you are in your 50s and earning $50,000 per year. However, it may not be if you are in your 40s and earning $100,000.Saving for retirement is an individual matter. When setting a savings goal, consider all the above and push yourself to achieve it.