Can I afford to retire?

If your sole source of retirement income was a $955 monthly Social Security check, could you make ends meet? That’s the average benefit for a worker retiring in 2004, according to the Social Security Administration (SSA).

According to many experts, you will need 70% to 80% of your preretirement income to live comfortably each year in retirement. The SSA says Social Security should replace about 40% of preretirement income for the average earner. The rest of your retirement income will come from your employer plan and personal savings.

Know how much you need to save

Knowing specifically how much to save for retirement is valuable information. Research says that those who know how much to save are twice as likely to be saving enough for retirement as those who don’t.

Your action steps

• Find out your estimated Social Security retirement benefit. It’s on your annual statement, which you receive in the mail from the SSA about three months before each birthday if you are age 25 or older.
  
• Use the Can I Afford to Retire? worksheet to see if you have enough money put away. Log on to your account at www.vanguard.com. From the Retirement Plans section, click the Planning & Advice tab, and then More Tools.
  
• Call Vanguard® Participant Services at 800-523-1188 Monday through Friday from 7:30 a.m. to 8 p.m., Central time, if you have questions or want to increase the amount you’re saving.

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