There are many rules of thumb to help determine your needs in retirement and if you haven’t calculated it out, the sooner you do, the better you can plan. Beyond a guesstimate that considers just your current savings, social security and anticipated lifestyle remember that everyone’s situation is different and will require organization and customization. Key factors to financial comfort may include consolidating accounts and credit cards; a budget you can adhere to that incorporates in everyday expenses, discretionary expenses and unexpected expenses and, of course, a customized financial plan that considers your needs, wants and wishes and keeps you focused and on track. Some main items to consider when thinking through how much will be enough include:
- How long will you live
- Where will you live
- How much healthcare will cost
- Your legacy
Once you have assessed your current situation you may find that there are gaps in meeting your goals, but there are always options and adjustments you can make today to impact your future. Can you:
Save More: Are you able to pare back and save any additional money? Take a close look at your budget and cash-flow.
Take less: Can you adjust your retirement lifestyle to make the money last longer? Consider six rounds of golf each month rather than eight or one vacation per year rather than three…
Earn More: Do you want to supplement your income in retirement through part time work or can you retire from your full time job in stages?
Wait: While many of us have a target retirement age in mind, what age is realistic for you? We are living longer than ever. Will delaying retirement for a few years help?
Only you know how much income you will need to retire and what sacrifices, if any, you are willing to make to have a particular lifestyle. By taking control now, you significantly improve your chances of not outliving your money.
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