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Did you know only 48 percent of workers say they and/or their spouses have taken the time to complete a retirement needs calculation?* Knowing the amount of retirement income you will need can play a significant role in helping you reaching your financial goals. Take a look at your specific situation to determine how much you should ideally contribute to your retirement account.

Estimating your need

Determining how much retirement income you will need involves your annual salary and how long you expect to be retired. Financial professionals suggest you accumulate at least 75 to 80% of your current annual income  for each year of retirement.

People live longer these days, so retirement could be longer than it used to be — as many as 20 or more years longer!

Retirement income goal example:
Annual salary: $45,000
Annual Retirement Income Goal: $45,000 x 80% = $36,000
Number of Years in Retirement: 25 years
Total Retirement Income Goal: ($36,000 x 25 years) = $900,000

Inflation’s impact

Inflation erodes the buying power of money over time. So, when estimating how much you’ll need to retire, it’s important to consider how inflation will impact the value of your account. Using a conservative annual inflation rate of 3 percent and assuming retirement is 35 years away, let’s see the impact on our example.

Inflation example:
Retirement income goal = $900,000 
Inflation rate: 3% = 1.03
Years until retirement: 35
Inflation adjusted retirement income goal: (1.0335) [The inflation rate multiplied by itself 35 times] x $900,000 = $2,532,476

* The 2020 Retirement Confidence Survey from Employee Benefit Research Institute and Mathew Greenwald & Associates.


OneAmerica Financial is the marketing name for the companies of OneAmerica Financial. Group annuity contracts are issued by American United Life Insurance Company® (AUL) and registered variable annuity products are distributed by OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRASIPC, One American Square, Indianapolis, IN 46282, 1-877-285-3863. McCready and Keene, Inc. and OneAmerica Retirement Services LLC provide administrative and recordkeeping services and are not brokers/dealers or an investment advisors. Neither AUL, OneAmerica Securities, McCready and Keene, OneAmerica Retirement Services nor their representatives provide tax, legal or investment advice.

All individuals are fictitious and all numeric examples are hypothetical. These hypothetical investment returns are for educational purposes only and are not indicative of any particular investment or performance. Hypothetical returns assume reinvestment of earnings. Actual returns or principal value will vary. Balances shown are before reduction for taxes.