How much will you need to save for retirement?

I saw this article discussing how much you'll need to save for retirement a while ago. It's one of the most useful articles I've seen in a LONG time. I've always just set a goal of "millions" but this is a realistic article that you can use to figure out how much you should try to save. The details can get involved, but as a bonus there are good charts.

In a nutshell, here's the process:

Start saving 12% of your income at age 30.

Pay off your debt (house, car, etc.) by the time you retire.

Assuming a 5% rate of return (nice to see an assumption on the low side) you should have 12 times your pre-retirement salary saved up when you retire.

You can withdraw 5% of these savings per year after retirement; this should give you 60% of your pre-retirement income.

Social Security should give you another 20% of your pre-retirement income. So even if Social Security goes away, you still have 60% of your pre-retirement income.

Voila. You've got 80% of your pre-retirement income.