Have you saved enough for retirement?

A number of online savings calculators demonstrate how much your savings will be worth in the future. Just plug in your current savings, how many years you plan to save, and average annual gains and — thanks to compounding interest — you see how your savings grows with time.

But these calculators don’t give you the full picture as to how much you’ll need to live comfortably in your retirement.

Inflation nation.

Over time the cost of goods goes up. By way of calculators that take inflation into account, $100,000 today would only be worth around $68,000 a decade from now (with 4 percent inflation). To have the same buying power in 2023 as your $100K has now, you’d need to sock away $148,000.

 

While the rate of return on your investments is on your side, you may need to adjust your expectations.

In retirement you may be buying products and services whose prices have been outpacing the average inflation rate. For example, health care is nearly twice the average rate of inflation — at close to 8 percent.

Other retirement staples include food and gas for travel — both of which have outpaced the 12-month, 2.9 percent inflation rate across all items (as of 2012) — with 4.5 percent for grocery items and a whopping 12.6 percent for gasoline.

 

It’s a matter of time.

Consider you’ll be living longer in retirement that your parents or grandparents did.

And people are not only living longer, but they’re living healthier. You may be in a position to work longer, which may help soften the blow of the additional monies you’ll need to cover the longer period of time you’ll be in retirement.

U.S. government tables illustrate that, back in 1940, the average man could expect to live fewer than 13 years after age 65, while the average woman would live another two years beyond her male counterpart at the time.

Fast-forward to 1990, and the average man and woman could expect to live at least another 15 years and another 20 years respectively beyond their 65th birthdays.

According to 2011 U.S. government statistics, the average American spends $2,450 each month. Even if you don’t retire until age 70, if you’re male you would need to save $294,000 to maintain your present lifestyle for the 10 additional years you are expected to live beyond your 70th birthday. Female? You would need to sock away $441,000 to account for the five additional years in retirement beyond your male counterparts.

At 4 percent inflation, as a woman you’d need to save more than $790,000 to equal today’s $441K buying power. As a man, you’d need to save at least $435,000.

Don’t delay. Planning ahead can save a painful “surprise” that you haven’t saved nearly enough to fund your retirement years.