Ponte de Lima, Portugal

THEGIFT777 | iStock Unreleased | Getty Images

Didn't save enough for retirement?

One solution: Spend your golden years in a country where life is less expensive than it is in the U.S.

More Americans are doing just that.

The number of retirees who are collecting Social Security abroad rose 40%, to more than 410,000, between 2007 and 2017. More than 160,000 are in Europe, and over 90,000 are in Asia. Thousands of others are in Canada and Mexico.

More from Personal Finance: Why you might not want to move all your IRA money to a Roth Here's why you should consolidate those 401(k)s and IRAs If you hit the $237 million Powerball jackpot, this is your tax bill

Aspiring expats should do their homework before they start packing. For example, Medicare typically provides no coverage abroad. And you'll want to figure out the tax implications of retiring in, say, France instead of Florida.

But there's no question you stand to save a lot by relocating to a place such as Portugal or Vietnam, according to International Living, a website for expats, which recently released its annual global retirement index for 2020. (In its ranking, the site factors in not just the cost of living and housing, but perks offered to older residents, plausibility of permanent residence, health care, governance and general opportunity.)

Your retirement budget will hopefully go further in these 10 countries.

Lisbon, Portugal

SeanPavonePhoto | Getty Images

You can live a comfortable life here for about $2,500 a month.

Flag on Cinta Costera, Panama

Dixon Hamby

You can get by in Panama City for around $2,600 a month, including rent, groceries, utilities and entertainment.

Manuel Antonio National Park, Puntarenas, Costa Rica

Christer Fredriksson | Getty Images

A couple can live on a budget of around $2,000 a month here.

Tourist couple looking at Gaviota Azul beach, Cancun, Quintana Roo, Mexico.

Getty Images

A couple can live here for $1,500 to $3,000 a month, depending on location.

A horse-drawn carriage in colonial Cartagena, Colombia.

Dan Herrick | Getty Images

You can retire here for$1,030 to $2,720 a month, depending on location and lifestyle.

Quito, Ecuador

Gabrielle and Michel Therin-Weise | Getty Images

A couple can get by here for around $1,800 a month.

Kuala Lumpur, Malaysia

Muhammad Hafiz bin Muhamad | Getty Images

A couple can live in Penang for $1,800 a month.

Panorama of Puerto Viejo, Spain

Mimadeo | iStock | Getty Images

A monthly budget of $2,500 a month will allow a couple to live well in most parts of the country.

The Canal de Brienne in France.

nito100 | iStock Editorial | Getty Images

Outside of major cities such as Paris and Lyon, a couple can live here for under $2,500 a month, including rent and health care.

Mu Cang Chai in Yen Bai, Vietnam.

Sumith Nunkham

In Ho Chi Minh City and Hanoi, two people can live well on less than $1,500 per month.

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The 10 best places to retire abroad - CNBC

Sunset on Dominical Beach. (Tico Times file photo.)

International Living, a United States-based publication specializing in you guessed it living internationally, has named Costa Rica among its best places to retire in 2020.

Costa Rica ranks third on International Livings list, behind Portugal and Panama, and ahead of countries including Colombia, Mexico, Spain and France.

Why Costa Rica? According to Kathleen Evans, International Livings Costa Rica correspondent, the Central American country attracts visitors with its tropical climate; low cost of living; top-notch, affordable medical care; bargain real estate; and natural beauty.

A couple can live a comfortable, but not necessarily extravagant life here for around $2,000 a month, Evans writes.

International Living cites a welcoming culture, the more progressive government of President Carlos Alvarado, affordable healthcare and the countrys dozen microclimates as reasons to consider Costa Rica.

Check out the full list on International Living here.

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International Living names Costa Rica as third-best retirement destination in 2020 - The Tico Times

Almost a quarter of Americans have less than $5,000 saved for retirement.

And to someone with no savings and an annual salary of $75,000, the idea of putting away $2 million for retirement can seem like an impossible goal. It can be done, however, it will take time and dedication.

As a rule of thumb, most financial advisors suggest you save 10% to 15% of your salary. But if your goal is to get to $2 million, the percentage you need to invest will vary widely based on how old you are when you start.

NerdWallet crunched the numbers, and we can tell you exactly how much of your $75,000 you'll need to tuck away to get there.

Just a few things to remember: These numbers assume you have no money in your retirement plan, that you will get an average 6% return on your investments and that you will retire at age 65.

The math also does not account for potential pay increases, employer matches, inflation or any curveballs that life may throw at you. So plan accordingly.

Now let's dive into the figures.

More from Invest in You: How Walmart and other big companies are trying to recruit more teenage employees Americans are more in debt than ever and experts say 'money disorders' may be to blame

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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How to save $2 million for retirement if you make $75,000 a year, broken down by age - CNBC

FOX Business' Kristina Partsinevelos reports on how Congress aims to pass 401(k) changes including small business packages and part-time worker eligibility.

Lawmakers are preparing to pass comprehensive retirement reform, which would give more people access to retirement accounts,for the first time in more than a decade, with the aim of helping Americans save enough to live comfortably throughout their older years.

The Setting Every Community Up for Retirement Enhancement,or SECURE, Act is tied to a bipartisan spending bill that Congress must pass in order to sidestep a government shutdown at the end of the week.

The legislation contains a number of provisions that experts believe could meaningfully help Americans stash away more money, but also some that are perceived as negative for taxpayers.

It [is] quite a comprehensive bill, Chad Parks, founder and CEO of Ubiquity Retirement + Savings, told FOX Business. I think that the best way to characterize this is, its kind of cleaning house [Lawmakers] knew they had all these little things that are not quite right.

PENDING RETIREMENT RULE COULD MAKE THE IRS YOUR BIGGEST IRA BENEFICIARY, EXPERT WARNS

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One of the key parts of the legislation is that it aims to increase access to retirement plans,which is among the biggest savings barriers right now. The government will give tax credits to small businesses for having plans.

The government is paying you to put a retirement plan in place, Parks said.

The tax credit expires after three years.

The bill would also make it easier for companies to band together to offer multi-employer plans. Some businesses would berequired to allow some part-time workers to participate.

Multi-employer plans are currently available, but the legislation would change one significant rule that might encourage more businesses to participate. The so-called one bad apple rule refers to the fact that if 10 employers go into a plan together, and one person doesnt follow the rules, the whole group will suffer. Now, Parks said, businesses would be allowed to outsource two fiduciary rules to address that dilemma.

In order to help Americans stretch out retirement savings over their lifetime, the plan also calls for an annuity option in retirement plans, which are fixed sums paid out over a lifetime.

John Iammarino, the principal and founder of Securus Financial, told FOX Business the annuity option is particularly important since future retirees won't have a pension like their parents and grandparents.

It doesnt matter how much money you have if you dont turn it into a predictable lifetime income stream, Iammarino said. The annuity option [gives people] the ability to have a predictable income stream and helps alleviate some of that pressure from Social Security.

Another pair of provisions target the flexibility of accounts: People would be allowed to stash money into IRA accounts beyond the current age limit of 70 1/2. It would also delay when individuals are required to begin taking required minimum distributions to 72, from 70 1/2.

Iammarino saidraising the contribution threshold will have that significant of an impact on most people, but delaying the age at which individuals would be required to withdraw funds from their accounts allows for nearly two extra years of planning and delays potentially being pushed into a higher tax bracket.

Among the changes that could be negative for retirees is the elimination of stretch IRAs. The proposal stipulates that most non-spouses who inherit an account must drain it within 10 years of the owners death, while the current law allows them to stretch it out over a lifetime.

Stretch IRAs are an estate planning strategy that allows people to pass their retirement funds to their kids, grandkids or other beneficiaries. For example, achild, who inherits money held in a parent's retirment account, under current law,can allow that money to grow tax-deferred or tax-free over the course of a lifetime and that beneficiary can take smaller required minimum distributions along the way, which is based on age and life expectancy. Those distributions, however, are subject to income taxes. Since larger distributions will need to be made during the 10-year timeframe, the tax liability could be larger.

If you are leaving money then you might want to have some different plans You could be making the IRS your biggest beneficiary, Iammarino said.

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Overall, however, experts are optimistic about what lawmakers are trying to accomplish.

At the end of the day, todays retirement is on the employee, Iammarino said. I dont think the bills going to have an overall impact on peoples ability to save, but I do think people over the long haul will be happier in retirement with their annuity option.

The SECURE Act is attached to a package of spending bills that lawmakers need to pass by Friday in order to avoid a government shutdown. The retirement bill itself passed the House by a margin of 417-3 in the spring, but progress had stalled in the Senate.

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Retirement reform: Key SECURE Act provisions that will affect you - Fox Business

When you are ready to retire, there are certain basic things you should do before you leave the comfort and security of your old job. You need to make final adjustments to your financial plan and make important decisions about Social Security and health insurance.

Here's a checklist for retiring in 2020:

-- Decide when to start Social Security.

-- Sign up for Medicare or other health insurance.

-- Check your retirement benefits.

-- Take advantage of last-minute benefits at work.

-- Consider rolling over your 401(k) to an IRA.

-- Make a financial plan.

-- Decide what to do next.

Remember to do these things if 2020 is the year you're finally going to take the leap into retirement.

Decide When to Start Social Security

You're eligible to claim Social Security payments beginning at age 62. However, you will receive a reduced payment unless you begin collecting benefits at your full retirement age, which varies depending on when you were born. For example, the full retirement age is 66 and 2 months for people born in 1955. You can increase your monthly payments if you sign up for Social Security after your full retirement age. Each year you wait, your monthly benefit grows by about 8%, up to age 70. Sign up for a my Social Security account to view how much you will receive from Social Security if you start payments at various ages.

[Read: Medicare Enrollment Deadlines You Shouldn't Miss.]

Sign Up for Medicare or Other Health Insurance

Medicare coverage begins at age 65, regardless of your Social Security full retirement age. When you enroll in the program you will need to make decisions about Medicare supplement plans and prescription drug coverage or Medicare Advantage plans. If you retire before age 65, you have to figure out how to get medical insurance that isn't connected to your job. Some people qualify for health insurance through an old employer, professional organization or a working spouse's health insurance plan. You can also obtain coverage through your state's health insurance marketplace until you qualify for Medicare.

Check Your Retirement Benefits

Confirm eligibility for a pension or other retirement benefits you earned at work. Also, check to see if you qualify for benefits from a previous employer. You might collect income from two or three places where you worked during your career. Find out if you're eligible for retiree employer-subsidized health insurance. Check to see if retirees can take advantage of any other company-sponsored benefits, from life insurance to membership in a health club to employee discounts on company products.

[Read: How Much You Will Get From Social Security.]

Take Advantage of Last-Minute Benefits at Work

If you have dental and vision coverage at work, you may want to visit the dentist and pick up a new pair of glasses before you retire. If the company matches any charitable giving, then make your annual contribution before you retire. If your child has an employer-sponsored college scholarship, see if the scholarship will continue after you leave. This is your last chance to use the benefits the company offers.

Consider Rolling Over Your 401(k) to an IRA

Employers typically allow you to keep your 401(k) account with the company after you retire. However, you might be better off transferring the money to an IRA or Roth IRA. IRAs typically have more investment options, and you can shop around for lower cost or better performing funds. If you own company stock, either inside or outside a retirement plan, now may be the time to sell some in order to diversify your holdings. You may also want to tweak your investment strategy and make a plan to minimize taxes as you draw down your retirement assets.

[See: 10 Tips for Rolling Over a 401(k) When You Change Jobs.]

Make a Financial Plan

There's more to financial planning than tending to an IRA. Try to make a budget that details your expected income from Social Security, pensions, retirement savings, other investments and part-time work. Then estimate how much you're going to spend. The estimate may have contingencies, such as spending less by moving to a lower cost community or spending more if you're planning to travel, but you should have some idea of what your expenditures are going to be, at least for the next few years. Don't forget to include an emergency fund, in case of unexpected bills like a medical emergency or major home repair.

Story continues

Decide What to Do Next

There's more to retirement than your finances. Try to imagine what your retirement life is going to look like. There are major decisions to be made about what you are going to do each day. Perhaps you are planning to move to a new location, buy a beach cottage or extensively travel. Maybe you're going to play golf, learn a foreign language, start a second career or take care of your grandchildren. When you're retired you have the freedom to do what you want, which means you have to identify something meaningful that will keep you active and engaged in life.

Tom Sightings is the author of "You Only Retire Once" and blogs at Sightings at 60.

More From US News & World Report

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How to Retire in 2020 - Yahoo Finance

Electrical products and power management company Eaton (NYSE:ETN) -- up nearly 38% on a year to date basis as I write -- was arguably the best stock of the year if you're a retiree. The company is far from being the most exciting stock on the market, but boring should do just fine for investors looking for a reliable stream of income in their old age. Here's how Eaton made it to the top of the list and why it's still an attractive investment for 2020.

Image source: Getty Images.

First, a few words on the selection process -- not least so readers can perform such exercises themselves in the future. Using commonly available stock screeners, the following filters can be used to whittle down the universe of suitable stocks. For reference, this is not a list of the only suitable stocks for retirees, just ones that performed the best in 2019 within certain parameters -- there are many other ways to find stocks suitable for retirees.

As outlined below, I've looked for stocks with a current yield in excess of 3% and manageable debt with good dividend coverage.

Filter

Metric Explanation

Rationale

Stocks Left After Filter Applied

Market Cap Above $2 billion

Price times shares listed

Need for liquidity in a stock

837

Dividend Yield Above 3%

Dividend divided by price

Need for a decent income

165

Return on Equity Above 10%

Net income divided by shareholders equity

Retirement stocks must have growth potential

100

Long-Term Debt to Equity Below 60%

Long-term debt divided by equity

Debt can become a significant issue in a recession

24

Current Ratio Above 1

Current assets divided by current liabilities

Company must have good liquidity

10

Payout Ratio Less Than 75%

Dividend divided by earnings

Flexibility to grow the dividend

4

Data source: Author's analysis using macrotrends.com stock screener.

The four final candidates are shown below. It can immediately be seen that Eaton and asset manager Eaton Vance (NYSE:EV) were the best performers in 2019.

ETN data by YCharts

I'll focus on Eaton in a moment, but it's worth noting that the two technology also-rans, namely telecommunications equipment company Cisco Systems (NASDAQ:CSCO) and integrated circuit maker Maxim Integrated Products (NASDAQ:MXIM) are companies that many investors would dismiss as candidates for a retirement portfolio in any case.

Cisco is a worthy company, but to buy the stock for the long term, you need to be confident in the long-term future for its switches and routers as internet infrastructure moves away from the enterprise level toward the cloud.

Similarly, Maxim Integrated is an exciting company, especially as the Internet of Things (IoT) looks set to spur ever more increasing use of electronics in automobiles, and in industrial and consumer products. However, it's a highly competitive field and Maxim comes up against far larger semiconductor companies like Analog Devices and Texas Instruments -- a concern in a highly cyclical industry where scale is so important.

Meanwhile, Eaton Vance is an investment asset manager -- a great business to be in when the markets are in good shape and assets under management are expanding. However, Eaton Vance's management fees will always be subject to the underlying performance of equity and fixed income markets -- nearly half of its management fees come from assets under management held in equities.

Eaton is also a somewhat cyclical company, but it has a relatively diverse collection of end markets ranging from utilities, trucks, and aerospace to industrial factories, data centers, and construction. In fact, Eaton's lower risk profile is reflected in the following metrics.

The standard deviation of monthly returns is simply a mathematical representation of how much a stock's monthly return tends to vary from its average. A lower number is better, as it implies the stock is less volatile. As you can see below, Eaton's is significantly lower than the others.

In addition, I've included the "Sharpe ratio," which simply takes returns generated in excess of a risk-free rate and then divides it by standard deviation -- a higher number is better. From this you can measure whether a company is making its returns through being more risky.Again, Eaton scores relatively well.

MXIM Historical Sharpe Ratio (10Y) data by YCharts

There's a reason why Eaton has done so well, and that comes down to operational improvements over the years. In a nutshell,a series of restructuring actions and acquisitions have significantly improved its margin and free cash flow generation in the last decade.

ETN Operating Margin (TTM) data by YCharts

Indeed, management expects to generate some $8 billion in free cash flow between 2019-2021, a figure representing around 20% of the current market cap with low-single-digit growth in revenue and earnings. After dividend payments of $3.5 billion, Eaton should have around $4.5 billion of cash available (around 11% of its current market cap) with which to make share repurchases or acquisitions -- another source of earnings growth potential.

Not only was Eaton the best retirement stock for investors in 2019, but it also has plenty of potential to do well for investors in the coming years. The dividend is very well covered and the company's cash flow generation, ongoing restructuring, and relatively diverse end markets suggest it can grow its dividend for many years to come.

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This Was the Best Retirement Stock of 2019 - The Motley Fool

GEORGETOWN (CBS) Police escorts are reserved for important people, and the woman driving the Georgetown school bus is so special all the high school students lined the street cheering her on. After 18 and half years, bus driver Betty Langlais is now retired.

As if those surprises werent enough, Betty was in for another treat. But throughout the day she kept on saying, I am just a bus driver. But ask anyone who knows her and they will tell you she is so much more.

Friday night, a surprise party capped off Bettys last day.

In recognition of 18 years of outstanding service, one man read from an award.

Betty received a proclamation from the Massachusetts House of Representatives.

I am surprised about everything, but I love them all, Langlais said.

She is like a combination of mother earth and mother superior. She just loves everybody but you cannot pull anything over on her, said Sylvia Leonard, another Georgetown bus driver and friend of Langlais.

Betty drove bus number two, carrying up to 70 students of all ages, like Makayla Manning.

She had a saying Put your tushie on your cushie, Manning said.

Langlais started driving the school bus to fill the time after her husband passed away.

The kids. I love the kids, she said.

With her 80th birthday coming up, Betty decided it was time to hang up the bus keys.

I lost it. Thats why my face is red. I have been crying all day, Langlais said.

Everybody is going to be missing her and she should come for visits, Manning said.

That is a definite as Langlaiss nickname proves just how much she means to the community. They call her Georgetown Betty.

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Beloved Georgetown Bus Driver Treated To Surprises Before Retirement - CBS Boston

Americans are losing a popular retirement tax strategy next year that allows the wealthy to leave large inheritances in retirement accounts.

The Senate passed legislation on Thursday that eliminates a popular financial planning tactic called the "stretch IRA."

The retirement bill, the Secure Act, was tucked into a bipartisan $1.4 trillion spending package that federal lawmakers had to pass by Friday to avoid a government shutdown. The House passed the spending package earlier this week. It now heads to the desk of President Donald J. Trump, who is expected to sign it.

The stretch IRA used primarily by Americans who have saved a substantial amount of money in their retirement accounts applies to beneficiaries of individual retirement accounts and certain workplace retirement plans like 401(k) plans.

Current tax rules state that beneficiaries, such as children and grandchildren, who inherit retirement accounts when the account owner dies must take distributions from those accounts over a certain time period.

Today, that timeframe can be lengthy since it's based on the beneficiary's age and life expectancy. A 40-year-old inheriting a deceased parent's IRA, for example, could theoretically take distributions from the account over a period lasting more than three decades.

However, the Secure Act significantly compresses the window of time for beneficiaries to take such distributions, which will have broad implications for many Americans, potentially even those of more modest incomes.

The new rules around the stretch IRA require beneficiaries of 401(k) plans and IRAs to withdraw all the money from inherited retirement accounts over 10 years. Taxpayers would have flexibility around when they take the distributions they could withdraw an equal amount of money each year from the account or decide to withdraw all funds in year 10, for example.

This would be true for both traditional, pretax retirement accounts and tax-free Roth accounts. Failing to withdraw funds within the 10-year period would result in a 50% tax penalty on assets remaining in the account.

The elimination of the stretch IRA has been hotly contested in Washington. Opponents of curtailing the strategy contend the new rules are punitive for taxpayers who have structured their financial plans to leave large inheritances in retirement accounts for children and grandchildren. Proponents of upending the status quo say retirement accounts were never meant for estate-planning.

New rules cut tax benefits to consumers in two primary ways, according to Jamie Hopkins, the director of retirement research and vice president of private client services at Carson Group, a financial advisory firm based in Omaha, Nebraska.

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Assets held in an inherited retirement account would have a shorter amount of time to grow on a tax-deferred basis, meaning overall account size would be smaller in most cases. Withdrawals will also be larger, since they're compressed into a shorter frame of time, making it more likely that beneficiaries of a pre-tax account will be pushed into a higher income-tax bracket when they take distributions.

For example, the beneficiary of a $1 million account could withdraw roughly $33,000 a year over 30 years under current rules; however, that would be $100,000 a year under new rules.

"For most people, that would push them into a higher tax rate," Hopkins said.

The Congressional Budget Office in April projected the elimination of stretch IRAs and workplace retirement plans would raise nearly $16 billion for the federal government over a decade.

Significantly, individuals affected by this change in tax law only have a short time to amend their financial plans. Taxpayers who inherit a retirement account from an account owner who dies after Dec. 31, 2019 would be subject to the new distribution rules. Accounts of those who die before the end of the year would be subject to the old distribution rules.

"In some cases it may be better to die on Dec. 31, 2019 than Jan. 1, 2020," said David Levine, an attorney at Groom Law Group.

The stretch IRA doesn't necessarily apply only to wealthy Americans, Levine said. It could apply to those who've saved diligently over several decades and have relied primarily on Social Security and other retirement assets such as a pension for retirement income.

There are exemptions for certain beneficiaries, however. The new rules wouldn't apply to a surviving spouse, a minor child, disabled or chronically ill individuals, or anyone within 10 years of age of the deceased account holder.

401(k) and IRA owners should consider reviewing their beneficiary designations before the end of the year due to the change in law, Hopkins said. Some may wish to spread the wealth to multiple beneficiaries instead of just one to reduce the overall tax burden.

They may also consider converting a traditional IRA to a Roth. The account holder would have to pay the associated income tax to convert the account, but would spare beneficiaries from having to pay the tax in the future.

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Lawmakers are killing this popular retirement tax break for the wealthy - CNBC

Democratic presidential candidates do not seem particularly concerned about Americans' retirement savings accounts, CNBC's Jim Cramer said Friday.

"I listened to the Democratic debate last night. None of those candidates, I find, is really interested in your 401(k)," Cramer said on "Squawk on the Street."

Seven candidates qualified for Thursday's primary debate in Los Angeles, spending nearly three hours going back and forth on topics such as Trump impeachment, climate change, the role of money in politics and how the contenders would approach foreign policy with China.

It was the conversation on China that caught Cramer's attention the most, the "Mad Money" host said.

Pete Buttigieg, mayor of South Bend, Indiana, took one of the strongest stances toward China, whose poor human-rights record has been spotlighted in recent months by protests in Hong Kong and by Beijing's treatment of minority Uighur Muslims.

Cramer said Chinese leader Xi Jinping should agree to a definitive trade deal with the U.S. because a potential Democratic administration would likely be tougher than President Donald Trump.

"They're talking about a titanic struggle between two great nations," Cramer said of the Democrats.

It was also Buttigieg considered one of the top-tier candidates alongside former Vice President Joe Biden, Vermont Sen. Bernie Sanders and Massachusetts Sen. Elizabeth Warren who took explicit aim at the stock market.

He argued the Dow Jones Industrial Average isn't the way to measure how Americans are doing financially, and instead the focus should be on how people feel when it comes time to pay the bills each month.

Some people who share Buttigieg's view may point to the fact only half of Americans have access to 401(k)s.

Many experts agree that the stock market shouldn't be the sole measuring stick for the broader economy.

When trying to gauge the stock market, others such as CNBC's David Faber also note that the S&P 500 provides a better read than the Dow, which consists of just 30 large companies.

"But I think there is a component that does matter because of 401(k)s," Cramer said, noting the "trillions of dollars in wealth being created."

In addition to Biden, Sanders, Warren and Buttigieg, Minnesota Sen. Amy Klobuchar, entrepreneur Andrew Yang and billionaire businessman Tom Steyer rounded out the seven candidates at the Los Angeles debate.

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Cramer: None of the Democrats at the debate seem to care about your retirement savings - CNBC

Do you know how much money you need to save for retirement? If you do, you're part of a small minority of Americans. Employee Benefit Research Institute's recent survey found just 42% of all Americans had attempted to calculate the amount of money they'll need to support themselves in their senior years.

One reason why so few Americans have figured out their magic number: It's complicated to estimate the amount of income you'll need to support yourself decades from now for an indeterminate length of time. But while it can be difficult to set a clear retirement savings goal, there are some tried-and-true techniques you can use to figure out how much to save.

Image source: Getty Images.

The most accurate -- but most complicated -- method of figuring out your retirement savings goal is to determine the amount of cash you'll need as a senior and then figure out how much savings you'll need to produce it.

This technique works best if you'll be retiring soon, as it can be almost impossible to anticipate expenses decades from now. But if you're pretty close to retirement, you can look at your current expenses, figure out which will remain when you retire, and add in any new spending you anticipate.

Say you're spending $50,000 per year -- but that includes $10,000 on a mortgage that'll be paid off before you retire, as well as $1,500 in commuting costs and clothing for the office. Your spending would go down to $38,500, but you might want to add in an extra $2,000 for a big vacation you plan to take each year. In this case, you'd need $40,500. And of course, you can't forget to add in money for additional healthcare costs you might need as you age -- the costs of which could be over $4,000 per year or more.

Once you have an estimate of how much you'll need, figure out the amount you'll get from Social Security and other sources of funds, such as a pension. You can estimate your Social Security benefits using a calculator on the SSA website, but keep in mind that the calculator won't be exact.

To determine how much money you'll require your investments to produce, subtract the income you'll get from these other sources from the amount of income you'll need.If you need $45,000 and get around$17,500 from Social Security, you'd need your retirement accounts to produce $27,500 in income.

Then use the 4% rule to see how much you need in savings. The 4% rule estimates a safe withdrawal rate of 4% of your savings in the first year of retirement (you'll then increase this amount by inflation each year). If you needyour retirement account to produce $27,500, multiply that number by 25 to see that you'd need $687,500 saved.

If you don't want to figure out your exact retirement budget or can't do so because retirement is too far away, you can estimate the amount of money you'll need as a retiree based on a percentage of what you're earning before you leave the workforce.

Most financial experts recommend you have 70% to 80% of your final salary available to spend in retirement if you want to maintain your standard of living. If you anticipate being a big spender, err on the side of a larger percentage of pre-retirement funds.

To use this approach, first estimate what your final salary will be by using your current salary and anticipating a 2% annual raise. So if you're earning $45,000, add 2% to $45,000 to figure out your likely salary a year from now -- then repeat this for each year until retirement. The chart below shows what that would look like.

Years to Retirement

Current Salary

Salary 1 Year Later After 2% Raise

10

$45,000

$45,900

9

$45,900

$46,818

8

$46,818

$47,754

7

$47,754

$48,709

6

$48,709

$49,684

5

$49,684

$50,677

4

$50,677

$51,691

3

$51,691

$52,725

2

$52,725

$53,779

1

$53,779

$54,855

0

$54,855

$55,952

Chart by author.

In this example, you'd have a final salary of $55,952. If you decide you need 80% of that amount for retirement, you'd need an income of $44,761. If your Social Security benefits are around $17,500, you'll need your investmentsto produce $27,261. Using the 4% rule, multiply this number by 25 to see you'd need about $681,525 invested to produce the desired retirement income.

Finally, financial experts recommend saving 10 times your final salary to have a secure retirement. You can figure out your final salary as described above -- use your current salary and assume a 2% annual raise for each year until retirement. Then multiply that number by 10.

If your final salary is $55,952 based on the above calculations, this approach would indicate you need about $559,520 saved to support yourself as a senior. This is less than the amount you determined using the two methods above. But if you'd planned to spend 70% of your final salary instead of 80%, you'd have determined you need $541,660 -- so it's pretty close.

As you can see, the three different approaches to calculating retirement income give you somewhat divergent answers to the amount of money you'd need, depending on the assumptions you make. Think about which approach makes sense for you, or try all three and choose the highest amount if you want to be sure you'll have cash to support you for the rest of your life.

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3 Ways to Calculate How Much to Save for Retirement - The Motley Fool