How Much Money is Enough for a Comfortable Retirement?

In 2011, the oldest members of the Baby Boom generation reached retirement age and over the next 15 years, around 8,000 Boomers per day will turn 65. And as more Americans contemplate life in retirement and preparing for it, they need to have a clearer picture of what their income (AGG[1]) needs will be after they’re done working full-time.
Although overall retirement income adequacy for Baby Boomers and Generation X households improved last year, helped by rising stock prices (VTI[2]), the gap between haves and have-nots in retirement readiness is still very wide.
Various factors, especially access to 401(k)-type retirement plans, can produce significant individual differences, according to the Employee Benefit Research Institute (EBRI).
In my latest retirement planning video[3], I talk with Ron Surz at PPCA about calculating the exact sum a person will need to enjoy a comfortable lifestyle. I also examine strategies for people who haven’t saved enough, in addition to reaching a feasible money accumulation goal for individuals who are still working.
Longevity and high health care costs still play huge roles in retirement income planning.
For both of these factors, a comparison between the most “risky” quartile with the least risky quartile shows a spread of approximately 30% for the lowest income range, approximately 25% to 40% for the highest income range, and even larger spreads for those in the middle income ranges.
“It would appear that while retirement income adequacy depends to a large degree on the household’s relative wage level and future years of eligibility in a defined contribution plan, a great deal of the variability in these values could be mitigated by appropriate risk-management techniques at or near retirement age,” said Jack VanDerhei, EBRI research director.

By ETFguide
Source; www.investorplace.com