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# Here's how much millennials at every age need to have saved right now to retire at 67

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You may have heard that you need to save \$1 million over the course of your lifetime to retire comfortably. But it can be confusing to know how much that means you need to be saving right now.

Financial analysts at Blacktower Financial Management Group did the math for you, and it turns out that you can probably squeak by with a little over a third of that \$1 million benchmark saved if you invest it well.

Blacktower calculates that the average person will need to put away \$386,100 of their own money over their lifetime to retire at 67, assuming you want an annual income of about \$35,100 in retirement, which is just under 75% of the national median income of \$48,700, according to the Bureau of Labor Statistics. Depending on how you invest that money, it could last up to 50 years.

To reach a total of \$386,100 by 67, the youngest millennials (age 24) need to have \$8,775 already set aside, while the oldest millennials (age 39) should have about \$140,400 stashed away in retirement savings. Here's a breakdown by age:

## Doing the math on retirement savings

Blacktower's calculations assume you'll earn an average return of about 6%. To get to that number, Blacktower notes that the average annual return of the S&P 500 Index is historically at around 10% and takes into account the adjusted 2.25% of long term inflation. While the data shows that the average real return would consequently sit at 7.75%, Blacktower's analysts would conservatively average this down to a target rate of 6% per year to account for market fluctuations.

That means if you start saving \$8,775 a year, or about \$730 a month, in a retirement account like a 401(k) over the course of the next 44 years, that \$386,100 in savings will grow to over \$1.7 million thanks to compound interest. Again, that's assuming you earn about a 6% rate of return. With that kind of savings, you'll have enough for about 50 years of retirement.

If you set aside that same \$730 a month in a savings account paying 1% interest, you'll earn less and only have about 13.7 years before the money runs out. And if you stick your savings under a mattress, which is not recommended, you'll likely run out of money by 78, which is roughly the average life expectancy, according to the current estimate from the Centers for Disease Control and Prevention.

Yet whether or not \$35,100 a year will buy you a comfortable retirement is also up for debate. In addition to any personal retirement savings, the average Social Security retirement benefit is currently about \$1,470 a month, or about \$17,640 a year, according to the Center on Budget and Policy Priorities.

However, the typical American spent about \$3,900 a month last year on basics such as food, housing, utilities, transportation and health care, according to the latest consumer spending data from the Bureau of Labor Statistics. That adds up to about \$46,800 a year, which means that there's not a lot of room for luxuries, such as travel, if you're trying to stick to a \$35,100 budget plus Social Security.

## How to boost your retirement savings

If you don't have Blacktower's recommended amount saved, you're not alone. Older millennials (ages 32 to 37) had about \$1,000 saved in their 401(k) accounts in 2016, which is the most up-to-date data on file, according to progressive think tank the Economic Policy Institute.

Older Americans didn't fare much better. Those 56 to 61 had a median balance of \$21,000 in their 401(k)s. That total reflects almost 30 years of savings.

For millennials, the good news is that it's not too late to jump-start retirement savings. First, evaluate your income and expenses. It can help to create a written monthly budget and carefully manage your credit. Once you have a fairly modest monthly budget, consider living below your means as long as possible.

Young people need to be very careful about dramatically raising their standard of living, says Bart Brewer, a certified financial planner with California-based Global Financial Advisory Services. "It's much harder to ratchet down after you've ratcheted up."

Another big boost: Immediately enroll in your employer's retirement plan if you're eligible and start adding funds if you haven't already. If you're self-employed or working as a contractor, consider investing using a solo 401(k) or a SEP IRA.

If you have a 401(k) through work, your company may offer to match the amount of money you put in, up to a certain point. If you put 5% of your salary into your 401(k), your employer may also contribute 5%, for example, depending on the type of program. Make sure you're contributing at least enough to take advantage of any match your company may offer.

If you do want to plan to have a more robust budget or any income after 78, it's also worth considering to work longer and delay claiming Social Security until later. "Benefits from Social Security are 76% higher if you claim at age 70 versus 62, which can substitute for a lot of extra savings," according to Olivia S. Mitchell, a professor and executive director of Wharton's Pension Research Council at the University of Pennsylvania.

It actually may be worth delaying full retirement indefinitely, Mitchell says. "If you can keep working, do so. If you can't work full-time, work part-time. Every little bit helps."

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