## Although it is nearly impossible to predict all the variables that might affect your retirement income over a 30-year time window, there is a simple calculation you can make to get a picture of how your savings will behave through time, giving you an idea of how much you’ll have by the time you retire. Learn how to calculate your retirement fund.

If you've asked yourself ‘do I have enough to retire?’ this article will help: we present you with a way of finding out. All you need to do are some calculations based on your ideal retirement age and how much you want to spend while in retirement.

There is a simple 5-step calculation that will help you determine if you’ll have enough income and savings by the time you reach retirement.

### To get started, you need to follow these 5 steps:

1. Determine your total annual contributions to the retirement savings plan

2. Multiply that number by the number of years left until you retire

3. Add your current retirement savings to that number

4. Divide by the number of years you expect to live in retirement

5. Add that to any guaranteed source of income

These 5 steps will help you determine how well your savings are doing towards a relaxed retirement. Let’s see how it works. For this example, we’ll use a sample couple, both partners aged 55:

A) Every year, each contributes the maximum amount to an IRA fund. That’s $16,000 ($8,000 each).

B) They have already saved $140,000.

C) They would like to retire at the full retirement age of 67, as defined by Social Security.

D) Based on life expectancy calculations, they expect at least one of them to live to the age of 94, so that’s 27 years in retirement.

F) He will have $2,200 each month in Social Security benefits ($26.400 per year), and she will collect half of that amount ($13,200) as a spousal benefit.

### So now that we have all the data, let’s see how the calculation goes:

1. $16,000 is the total annual contribution to their retirement savings plan

2. $16,000 x 12 (years left until retirement) = $192,000

3. They had already saved $140,000, so if we add that to this result: $140,000 + $192,000 = $332,000

4. $332,000 / 27 (number of years expected to live in retirement) = $12,297

5. Add that to any other guaranteed source of income: $12,297 + 26,400 + $13,200 (from Social Security) = $51,897

So, in this example, $51,897 represents the expected annual income for this couple. The last step to see if your retirement savings are doing well is to calculate a budget and see if it will be enough.

Although many fluctuations and variations are impossible to predict (and that can really affect your savings), this is a simple yet effective way of calculating if you are on your way to a relaxed retirement. Also, if you take the time to calculate this and you notice that you are not saving enough, it is a great way to correct that. The sooner you know, the better!