Are You a Boomer Planning To Work 10 More Years? This Is All the Savings You Will Need

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Perhaps all of your friends are retiring but you’re not ready to throw in the towel. In fact, you want to continue working for another decade.

Maybe this decision is based on financial issues or just a sheer passion for your job. Regardless, working another 10 years will almost definitely allow you to give your savings a substantial boost.

Of course, you still need a financial plan.

“A common rule of thumb is to have assets 10 times your income at retirement at age 67,” said Mark Struthers, CFA, CFP, founder of Sona Wealth Advisors. “This figure includes the use of Social Security, which would give you a total income replacement ratio of around 77%.”

He said Social Security benefits account for approximately 37% of your replacement income, and around 40% comes from your assets, assuming the 4% rule. This is the idea that you should be able to live comfortably off 4% of your investments in your first year of retirement, slightly increasing or decreasing that number every subsequent year to adjust for inflation(4).

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“A 77% income replacement is often enough for most people,” he said.

He said the main issue with this general guideline is people who earn a lot more than the maximum Social Security benefit.

“For someone making $100,000 today at age 57, the 77% holds true,” he said. “Social Security makes up around 37%.”

However, he said if you earn $200,000 per year, Social Security accounts for just 22% of your replacement income.

“So, with the 40% income replacement from the assets — 10 times ending income — you only have around a 62% replacement ratio, which is often not enough,” he said.

Consequently, he said he often recommends a higher multiple for higher earners.

If the $200,000 earner, in today’s dollars, has a 13-time income at age 67 and uses the 4% rule, the person will have around 74%, he said.

This breakdown includes 22% from Social Security and more than 52% replacement income from assets.

“This is especially important, because higher earnings will generally have higher taxes in retirement,” he said. “RMDs [required minimum distributions] alone can push them up into higher tax brackets — thus, they may need a higher replacement ratio.”

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Breaking Down Savings Goals

“Estimating how much savings baby boomers planning to work for an additional 10 years will need involves several factors and assumptions,” said Lynn Toomey, founder of Retirement Solved and Her Retirement.

She offered a step-by-step breakdown to calculate the amount you’ll need to save.


  • Desired annual retirement income: “Let’s assume that a baby boomer aims to maintain their current lifestyle in retirement, which includes an annual income of $50,000 after tax,” she said.
  • Inflation: “We’ll assume an average annual inflation rate of 2%, which is a typical long-term average,” she said.
  • Rate of Return: “We’ll assume an average annual investment return of 6% on their savings, which is a reasonable long-term expectation for a diversified portfolio,” she said.
  • Social Security: “We’ll assume that Social Security benefits will cover a portion of their retirement income,” she said. “The exact amount will depend on their earnings history and when they start claiming benefits.”


To estimate how much savings you’ll need, she recommended using the formula below.

Required Savings = (Desired Annual Retirement Income / Expected Rate of Return) * (1 – (1 + Expected Rate of Return)^(-Number of Years in Retirement)) / (Inflation Rate – Expected Rate of Return)

She said you’ll then plug in the numbers.

  • Desired Annual Retirement Income = $50,000
  • Expected Rate of Return = 6%
  • Inflation Rate = 2%
  • Number of Years in Retirement = 10 years (Since you plan to work 10 more years before retiring.)

Next, she said you’ll do your calculations.

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Required Savings = ($50,000 / 0.06) * (1 – (1 + 0.06)^(-10)) / (0.02 – 0.06)

Required Savings = $526,316

“So, a baby boomer planning to work for 10 more years and aiming for an annual retirement income of $50,000 — adjusted for inflation — would need approximately $526,316 in savings to supplement their Social Security benefits and support their desired lifestyle in retirement,” she said.

When creating your savings plan, she said the categories below should be included:

  • Retirement accounts: “Continuously contribute to retirement accounts like a 401(k) or IRA during the working years, taking advantage of any employer matches or catch-up contributions if eligible,” she said.
  • Emergency fund: “Maintain an emergency fund to cover unexpected expenses in retirement, reducing the need to dip into retirement savings,” she said.
  • Debt reduction: “Pay down high-interest debt, such as credit cards or loans, to free up more retirement income,” she said.
  • Healthcare costs: “Consider healthcare expenses and potentially long-term care insurance as health-related costs can increase in retirement,” she said.
  • Budgeting: “Create a detailed budget to track spending and ensure that retirement savings align with financial goals,” she said.
  • Investment strategy: “Diversify investments and periodically review the portfolio to balance risk and return,” she said.
  • Social Security strategy: “Develop a strategy for claiming Social Security benefits to maximize monthly income,” she said.
  • Tax planning: “Be mindful of tax implications when withdrawing from retirement accounts and consider tax-efficient withdrawal strategies,” she said.

Because individual circumstances can vary significantly, she said it’s essential to work with a financial advisor to create a personalized savings plan.

Now that you know how much to save, it’s time to get back to work — for the next 10 years.

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