Merrill Edge: No One Size Fits All for Retirement Savings

When it comes to saving for retirement, experts will espouse the need to save $1 million, 80% of your pre-retirement income or 12 times your working salary. But those figures are just starting points. Saving for your golden years is not a one-size-fits-all endeavor, nor is how you check up on your efforts thus far.

"Because there are so many variables, even the retirement researchers can't agree on a total dollar amount," says Ben Storey, director of retirement and personal wealth solutions at Merrill Lynch, in a blog post that appeared on Merrill Edge, the financial platform that offers access to online and advised investing. "What each person needs will vary widely based on a number of factors."

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When it comes to figuring out how much you will need in retirement, you have to look realistically at how much you will spend once you stop working full time. This is the reason that retirement savings are unique to each particular person. After all, if you will have no mortgage or debt when you retire and are extremely healthy, the amount you spend is going to be less than someone who has two mortgages on their home, suffers from chronic illnesses and is in debt.

"Having a percentage or dollar amount to give you a rough idea for planning can be helpful, but you can't be focused solely on that," Bill Hunter, director of personal retirement strategy and solutions at Bank of America Merrill Lynch, said in the same post. "Everybody's lifestyle is different. What they want to do in their retirement years may be very different as well." Hunter said that pre-retirees should create a rough annual estimate of expenses based on their current lifestyle and what might change in retirement. Keep in mind the potential for unexpected healthcare expenses and all of your sources of retirement income, including social security benefits, a 401(k) account, and any part-time, consulting or freelance work you plan to do.

According to Merrill Lynch experts, people who have calculated how much they think they will need in retirement should check up on their progress from time to time, comparing it with others in similar situations. If you see that your savings rate is way lower than that of your peers, it may be time to pick up the pace. Workers can also use retirement calculators to view a projection of savings to identify any gaps between what you have and what you will need when you reach your golden years.