When it comes to planning for retirement, the biggest question on most people’s minds is: How much money do I need to save? Unfortunately, there is no one-size-fits-all answer to this question. The amount of money you need to save depends upon several important factors, which can vary from one person to the next.
When do you expect to retire? The earlier you retire, the longer your retirement years will last. Therefore, retiring at an earlier age requires you to have more money in the bank than if you choose to retire several years later. Of course, no one can predict retirement age with absolute certainty. Factors beyond your control may force and early retirement, so it’s always better to estimate a few years in advance of your actual expected retirement age. Make sure to give yourself a little wiggle room.
What is your life expectancy? This can be a bit of an uncomfortable subject, but it goes without saying that those with a longer life expectancy will spend more years in retirement. Once again, no one has a crystal ball which helps them to predict this factor with absolute certainty. But if you take into account your parents’ longevity, your current state of health, and your lifestyle, you probably have some idea of your own life expectancy. If people in your family tend to live to 100, you will want to plan for a long retirement!
Don’t forget to consider health care. When we think of our expected monthly budgets, we tend to consider things like rent, utilities, and food. But keep in mind that an extended stay in a nursing home can multiply your expenses drastically. We would all like to remain in our own homes indefinitely, but that’s not always possible for many of us.
What are your expectations for your retirement lifestyle? You’ve worked hard to reach your retirement years, and you deserve to enjoy this time in your life. If you hope to travel, pursue other hobbies, or dream of moving to a more expensive area, then your expected lifestyle will figure heavily into your savings goal.
Take all of these factors into consideration when planning your retirement, and don’t forget to include inflation in your calculations. Also, remember that Social Security should not be seen as a primary source of income, but more as a supplement. A skilled insurance and financial advisor can help you to formulate a dependable plan for the future, so that you can enjoy your retirement without financial worries.
This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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