About half of U.S. workers think they are building a large enough nest egg to retire.
A 2019 study by the Transamerica Center for Retirement Studies and the Aegon Center for Longevity and Retirement found that 54% of workers are confident that they are on track to be able to retire.
The same study found that most workers estimated they would need a nest egg of $500,000 before retiring.
However, figuring out how long your savings will last can present a lot of variables. If you plan to stop working in your 60s, that leaves a huge question mark about how many years of retirement you will need to fund.
An “interest-only” retirement plan removes one of the biggest fears about life after leaving your job: Will my money outlast me?
Because if you can save enough now, you can fund your retirement by living off your returns without ever touching your nest egg.
NerdWallet crunched the numbers, and we can tell you how much you need to save to get $100,000 every year in retirement, without taking a bite out of your principal.
First, some ground rules. The numbers assume you will retire at 65 and have no money in savings now.
For investing, we assume an annual 6% return when you are saving and a more conservative 3% rate for your interest-only retirement. We do not factor in inflation, taxes or any additional income you may get from Social Security and your 401(k).
Check out this video to learn more.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.