Cash for retirement

How do I know how much I need to save for retirement?

"First, add up your cash flow from all sources, including Social Security, income from rental properties, and any pension," says Fritz Wood, CPA, CFP, Veterinary Economics Personal Finance Editor and a financial consultant who owns H.F. Wood Consulting in Lake Quivira, Kan. Unsure about your Social Security benefits? Check out www.ssa.gov to find out how much to expect. "Then, if you want $75,000 in annual income and $15,000 comes from Social Security and $30,000 comes from rents collected, you need to save enough money to pay yourself $30,000 annually. A good rule of thumb: Save 25 times the yearly amount, which is $750,000 in this case," Wood says. Want more information? He says to visit www3.troweprice.com/ric/RIC/ for a great online retirement-income calculator.

Fritz Wood, CPA, CFP