Estimate urges retirement savings of 8 years' income

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How much should you save for retirement?

Think eight.

As in eight years of your final yearly salary before you say goodbye to your job and head off for retirement.

That’s according to Fidelity Investments, the nation’s largest holder of employer-based 401(k) retirement accounts.

If you make $50,000 in your last year of working, you should have $400,000 saved, Fidelity financial planners say. If you make less, then you won’t need as much. But if you make more, you should have more money stashed away to ensure a comfortable retirement.

“While every individual’s situation will differ greatly based on desired lifestyle in retirement, the average worker may replace 85 percent of his pre-retirement income by saving at least eight times his ending salary,” according to a Fidelity statement.

The timetable has people working and saving until 67 and living until 92.

Boca Raton, Fla., financial planner Mari Adam said the Fidelity retirement savings goal is doable. “I like this way of measuring,” she said. “It’s easy to understand.”

In fact, in an earlier newsletter to clients, she offered a timetable in which a potential retiree accumulated as much as 10 to 12 times their annual salary by the time of retirement.

The Fidelity recommendation “cuts some slack to workers,” Adam added. “Everyone is so tired about hearing that they are not doing enough. People are saying they can’t save more.”

Some people may, in fact, not need to save as much as eight times their salary, said Deerfield Beach, Fla., financial adviser Chris Nichols. Those with pensions may only need a fraction of that, he said. Even people without pensions can opt to work longer, he said.

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