Choose a percentage of your current salary (or you and your spouse’s combined salaries, if married) as your desired annual income in retirement. The calculator will adjust the desired income to account for inflation and raises.
Many financial professionals estimate that a retiree will need 80% or more of his or her preretirement salary each year. Depending on what you plan to do in your retirement, you can choose a figure that’s higher or lower. Consider what your major retirement expenses might be:
Housing — Do you plan to buy a new house or rent? Will you finance a home with a mortgage or buy it outright?
Medical — What kind of health care costs can you expect? Even with health insurance you might budget for costs that are not covered.
Family — Do you plan to provide financial support to children or grandchildren?
Travel — Do you plan to travel extensively? What other leisure activities do you plan to enjoy?
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.