One of the most complex aspects of retirement planning is determining how much money you need to save. There are many variables involved. Some, like your life expectancy, are nearly impossible to predict with accuracy. A lot also depends on how you envision your retirement, including where you’ll live and how you’ll spend your time.

There’s no retirement savings target that works for everyone. However, looking at average retirement expenses can give you a useful baseline when estimating your own needs.

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Here’s how much the average retiree needs to live independently

Retirees need quite a bit of income just to meet their basic needs. Whether you rent or own your home, you’ll have housing expenses. Then there’s food, transportation, and healthcare, plus a variety of other expenses like clothing and recreation.

The University of Massachusetts Boston put together an Elder Index that breaks down how much the typical retiree currently needs to live independently for a year. Here are the results for a single adult:

Data source: University of Massachusetts Boston Elder Index.

Even in this data, there’s quite a range in terms of how much annual income you might need. A homeowner in excellent health with no mortgage would need just $24,000, while a homeowner in poor health with a mortgage would need $41,544.

Also, this is just the national average. Factors like the city you live in, and whether you plan to travel or make big-ticket purchases in retirement, have a huge effect on how much you’ll need to save for your future.

How to estimate your own retirement needs

You can use data like the Elder Index to get a rough estimate of how much you’ll need for retirement. You can enter your state or metropolitan area to get a rough idea of how much housing, food, transportation, healthcare, and miscellaneous costs may total in your area. But that’s only the first step.

You must then compare this to your own expectations of your retirement expenses. If you know you want to travel a lot, you might have to increase funding for transportation. If you live in a home that’s more expensive than average for your area, you may need to budget more money for housing.

Once you have an approximate idea of what your annual spending in the first year of your retirement will look like, subtract money you expect to receive from other sources in retirement. This could be Social Security benefits, a pension, or alimony. The remainder is the amount you’ll need to cover on your own.

One popular strategy says to multiply this remainder by 25 (the 4% rule). The result is supposed to be the amount you need invested to last for 30 years of retirement. But again, you may need to make some adjustments. If you anticipate a retirement that’s longer than 30 years, you probably need to save more than this.

You can also use a retirement calculator if you want a personalized retirement savings estimate. This can also help you figure out how much you need to save per month to reach your goal.

You’ll probably need to repeat this process more than once as you get closer to retirement. Your plans might change over time. You may also need to adjust your timeline if you’re not able to save as much as you’d like each month. Check in with yourself at least annually, and make small changes along the way, so you aren’t scrambling to make larger changes on the eve of retirement.

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