The Dolans' Retirement Savings Worksheet

Let's roll up our sleeves and get to work. We promise it will be worth it. Our goals are to figure out approximately how much you'll need in retirement and whether you're on track to meet that.

Most people need about 70% to 80% of their pre-retirement income, plus another 3% or so every year to keep pace with inflation, so let's start with your average annual income. We recommend taking your income over the last five years and dividing by five to get your average. If you're anywhere close to retirement, this will be a very accurate measure. If you're still years away, it's worth doing anyway, realizing though that your income will change – hopefully for the better! – in the coming years.

Line 1 : Average annual income (last five years): $__________

Line 2 : Figure that you'll need 75% of that, so multiply line 1 by 0.75. 75% of your current income: $____________

Now, let's factor in inflation to give us a better idea of how much you'll need in your first year of retirement.

Line 3 : How many years until you retire? ____________ years

Line 4 : Multiply line 3 by 0.03 to give you a rough estimate of how much your income will have to increase to keep pace with inflation: %_________ (Note: We realize this is not true compounding, but the result is fine for estimating.)

Line 5 : Multiply line 2 by line 4 to get a ballpark figure for the amount you will need in your first year of retirement to maintain your present standard of living: $____________

Now we'll turn to the money you'll have coming in. There are a variety of income sources when you retire. Possibilities include:

• Tax-deferred retirement accounts
• Cash value on your home
• Investments
• Social Security
• Pension

Let's project the amount you can expect to collect annually. We'll start with Social Security. You can find how much you'll receive from Social Security on the statements you receive periodically. Call 800-772-1213 if you haven't received a statement, or request a statement at www.ssa.gov. You can also get a rough estimate with this calculator on the Social Security Administration site: http://www.socialsecurity.gov/OACT/quickcalc/index.html. (Interruptions in your career in which you made less or were not working will bring down the Social Security taxes you paid and hence the money in your Social Security account.)

Line 6 : Social Security annual benefit: $____________

Line 7 : Annual traditional employer pension (if applicable): $____________

Line 8 : Second-career income: $____________

Line 9 : Other income: $____________

Line 10 : Add lines 6-9 to get your approximate total annual income for sources other than your retirement account: $____________

Line 11 : Subtract line 10 from line 5 to determine what you need from retirement accounts each year: $____________

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