How Much Money Should I Save for My Retirement?

One of the biggest fears family child care providers have about retirement is that they will run out of money before they die. Yet, most providers are not saving enough for their retirement.

To start planning for your retirement ask yourself this question, “How much will I need to live on to maintain a retirement lifestyle that I will be content with?”

Most experts say you’ll need about 70% to 80% of your current family income (your profit, plus a spouse’s gross income) in retirement to maintain your current standard of living. This is a rough estimate. You will probably spend less on housing, clothing, etc., but more on health care. Let’s say your family income is $80,000. That means you need to have $56,000 to $64,000 in income per year when you retire.

Next, look at how much you will receive from Social Security benefits. Go to to see your annual statement. It will tell you how much you can expect to receive at age 62 or at your full retirement age of 66 or 67. Let’s say you and your husband will receive a total of $30,000 in annual Social Security benefits when you retire. That leaves you about $26,000 to $34,000 short.

Most providers can’t rely on a pension, so the other options are to work longer or save enough to live on the interest of your investments. I strongly recommend that providers use one of many online retirement calculators to help them estimate how much they will need to save to meet their retirement goals.  Here are some calculators you can use:;, and

Using the first calculator, if you have twenty years before you and your spouse will retire, you’ll need about $426,000 to $557,000 in retirement savings on the day you retire.

Don’t be intimidated by how much the calculators say you may have to save between now and your retirement. Most providers will either work a little longer than their full retirement age or live on less income in retirement.

If you consistently save a little money each month you can make significant progress in meeting your retirement goal.

If you saved $100 a month and it earned 6% a year, you would have $47,000 after 20 years, $70,000 after 25 years and $101,000 after 30 years. It’s never too late to save. If you are age 52 and save $10 a day, earning 8% a year, you will have $294,000 by age 70.

The earlier you take responsibility for retirement savings, the less you will have to save!

Tom Copeland –

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For further information see my book Family Child Care Money Management & Retirement Guide.

Categories: Money Management & Retirement, Retirement Planning

1 reply

  1. This rough estimate is accurately what you will need in every single year, that means if you retiree in your 40s you will roughly need 2 to 3 million dollars until the day of your death. However retirees with over 55 or 60 of age have more opportunities such like reverse mortgage kinds of schemes. So they do not need to save their retirement monies rather they will be provided more money so that they can live the end years of their life in the best way.

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