# you are considering a job that offers a pension of 80% of your highest yearly salary prior to retirement. you expect your highest yearly salary will be $70,000. what amount of savings, earning 5% per year, would you need to save in order to match the income from the pension?

### James

Guys, does anyone know the answer?

get you are considering a job that offers a pension of 80% of your highest yearly salary prior to retirement. you expect your highest yearly salary will be $70,000. what amount of savings, earning 5% per year, would you need to save in order to match the income from the pension? from EN Bilgi.

## 401(k) Calculator

### Percent to contribute

This is the percentage of your annual salary you contribute to your 401(k) plan each year. Your annual 401(k) contribution is subject to maximum limits established by the IRS. The annual maximum for 2022 is $20,500. If you are age 50 or over, a 'catch-up' provision allows you to contribute an additional $6,500 into your account. Employer contributions do not count toward the IRS annual contribution limit.

Employees classified as "Highly Compensated" may be subject to additional limits based on their employer's overall 401(k) participation. If you expect your salary to be $135,000 or more in 2022 or was $130,000 or more in 2021, you may need to contact your employer to see if these additional contribution limits apply to you.

### Annual salary

This is your annual salary from your employer, before taxes and other benefit deductions. Since your contribution and employer match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.

### Current age

Your current age.

### Age at retirement

Age at which you plan to retire. This calculator assumes that the year you retire, you do not make any contributions to your 401(k). For example, if you retire at age 65, your last contribution occurs when you are actually 64.

### Current 401(k) balance

The starting balance or current amount you have invested or saved in your 401(k).

### Annual rate of return

The annual rate of return for your 401(k) account. This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31^{st} 2021, had an annual compounded rate of return of 13.6%, including reinvestment of dividends. From January 1, 1970 to December 31^{st} 2021, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 11.3% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.

### Annual salary increase

The annual percentage you expect your salary to increase. The calculator assumes that your salary will continue to increase at this rate until you retire.

### Employer match

The percentage of your annual 401(k) contributions your employer will match. These contributions are often capped. Please read the definition for "Employer maximum" for more information. Also note employer contributions do not count toward the IRS annual contribution limit.

Matching contributions can also be subject to a vesting schedule. See your plan information for details.

### Employer maximum

This is the maximum percent of your salary matched by your employer, regardless of the amount you decide to contribute.

For example, let's assume your employer provides a 50% match on the first 6% of your annual salary that you contribute to your 401(k). If you have an annual salary of $100,000 and contribute 6%, your contribution will be $6,000 and your employer's 50% match will be $3,000 ($6,000 x 50%), for a total of $9,000. If you only contribute 3%, your contribution will be $3,000 and your employer's 50% match will be $1,500, for a total of $4,500.

If you increase your contribution to 10%, you will contribute $10,000. Your employer's 50% match is limited to the first 6% of your salary then limits your employer's contribution to $3,000 on a $100,000 salary. The total 401(k) contribution from you and your employer would therefore be $13,000.

## How Much Do You (Really) Need to Save for Retirement?

Many of us wonder how much we'll need to save for retirement. View our tips to help you understand if your retirement plans are on track. Get retirement tips and information on how to prepare, here.

Copyright 2022 FactSet. All rights reserved.

Net Asset Value (NAV) returns are based on the prior-day closing NAV value at 4 p.m. ET. NAV returns assume the reinvestment of all dividend and capital gain distributions at NAV when paid.

Market price returns are based on the prior-day closing market price, which is the average of the midpoint bid-ask prices at 4 p.m. ET. Market price returns do not represent the returns an investor would receive if shares were traded at other times.

Returns include fees and applicable loads. Since Inception returns are provided for funds with less than 10 years of history and are as of the fund's inception date. 10 year returns are provided for funds with greater than 10 years of history.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation ("BofA Corp.").

Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

## Kiplinger's Personal Finance

The most trustworthy source of information available today on savings and investments, taxes, money management, home ownership and many other personal finance topics.

# Kiplinger's Personal Finance Şub 2006

Bu dergi hakkında

Tüm konulara göz at

### Google Play'de Kitap Satın Alın

Dünyanıın en büyük e-Kitap Mağazasına göz atın ve web'de, tablette, telefonda veya e-okuyucuda hemen okumaya başlayın.

Google Play'e Şimdi Git »

Guys, does anyone know the answer?