Fidelity's Guidelines on How Much to Save and Withdraw for a Secure Retirement

Core Insights - Fidelity emphasizes the importance of understanding how much money is needed for retirement, which varies based on factors like longevity, lifestyle, and Social Security benefits [1] - The brokerage has developed four key retirement planning guidelines that should be assessed carefully [1][9] Retirement Guidelines Based on Age - The age at which an individual retires significantly influences the income needed from personal savings, affecting savings rates, savings factors, and sustainable withdrawal rates [4] - Fidelity's findings on retirement guidelines based on retirement age include: - At age 62: 55% income replacement, 14 times current income savings, 25% yearly savings rate, and a 3.9% withdrawal rate - At age 65: 50% income replacement, 12 times current income savings, 19% yearly savings rate, and a 4.2% withdrawal rate - At age 67: 45% income replacement, 10 times current income savings, 15% yearly savings rate, and a 4.5% withdrawal rate - At age 70: 40% income replacement, 8 times current income savings, 11% yearly savings rate, and a 4.9% withdrawal rate [4] Development of Guidelines - Fidelity's guidelines were developed by analyzing yearly savings rates, savings factors, income replacement rates, and sustainable withdrawal rates, highlighting their interconnectedness [6] - The research assumed no pension income, continuous employment, and uniform wage growth, with stress testing conducted to ensure success in various market conditions [7]