How do you know that you’re still on track? Many factors affect your savings rate, including your retirement age, retirement lifestyle, and how long you’ve been saving.
Other factors to consider include the rising cost of healthcare and cost of living, and the fact that life expectancy is up. For these reasons, you’ll need to not only save up more money but to make it last longer than you would’ve in the past. Exactly how much income is enough when planning for retirement? There are many variables to consider. Rest assured, we can help you understand them better.
One of the most important things to do when planning for retirement is to make a budget for yourself. A realistic retirement budget takes into account all the things you will need money to spend on each month. This is the foundation of a smart retirement.
First, you should start with basic expenses. Healthcare, housing, transportation, and food are among the most important things to have money to spend on in your retirement budget. Next, there are discretionary items: Traveling, dining out, gifts, etc. You should also have money for these things. And, you should probably keep an “emergency fund,” to cover any unfortunate unforeseen expenses.
Inflation is another key factor to consider when thinking about how much you need to have saved for retirement. The rising cost of living causes each dollar you save to depreciate in value over time. The basic inflation rate can be calculated. The Fed typically aims to keep inflation at a rate of around 2% annually. Therefore, you should take your usual yearly expenses, and add a compounding 2% with every year. An effective retirement strategy requires figuring out how much income you’ll need years into the future. We can walk you through this process, keeping your specific circumstances in mind.
We Can Help You Feel Confident When Planning For Retirement
Get in touch with us to schedule a one-on-one meeting, or attend one of our no-cost, no-obligation seminar events (which come with a complimentary dinner.)