Financial experts share the secret to properly planning for retirement.

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There's much more to planning your retirement than simply daydreaming about how much golfing you can do throughout your week, which destinations to add to your travel list, and time spent with the grandkids. When financially planning your post-career years, how much savings do you need to accumulate in order to retire comfortably?

It's important to note that when it comes to determining your retirement savings goal, it's not about a single uniform number—it's about your individual income. Throughout life, the average person should aim for a cash cushion that considers living expenses, retirement income, and savings according to James Barksdale, president and founder of Barksdale Investment and Research. Ahead, Barksdale shares the helpful formula for retirement savings:

senior woman calculating finances
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How to Calculate Savings

Ideally, Barksdale explains that your goal should be a savings of 25 times your living expenses in excess of estimated income, which are your living expenses minus retirement income. This is based on the four-percent rule, which dictates that you can expect to withdraw four percent of your savings in your first year of retirement; that amount stays the same each year and rises only with annual inflation. With that in mind, you can expect to need about 80 percent of your pre-retirement income to cover the cost of living in retirement. In other words, if you make $100,000 today, you will expect to use $80,000 annually after you retire.

Barksdale adds that this may not be a suitable goal for everyone. If that is the case for you, he recommends doing half the level of savings by calculating 12 1/2 times. And as you inch closer and closer to retirement, trying to save the ideal 25 times as it will optimize your security.

The idea is that once you retire, you'll be able to eliminate certain expenses. For instance, you'll no longer have to save for retirement and you might spend less on commuting expenses or other costs related to your former career. It's still a good idea to consult your financial advisor who can not tailor a retirement savings goal that's right for you.

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