First, I am going to make the assumption that you have retirement as a goal. I mean you do want to retire one day, right? Of course, we all do. Retirement means different things to different people. It doesn’t have to mean not working. Retirement can simply mean reaching a state of financial independence where you don’t have to rely on a paycheck to sustain a your current lifestyle. This would give you the freedom to be able to pursue interests you enjoy. Doesn’t that sound like something worth working for? I think so.
If you are really serious about wanting to retire, one of the questions you need to ask yourself is How Much Money Will I Need For Retirement. The first lessons in goal setting is to know your target. You can’t just say, I want to retire early. So, when it comes to retirement planning, we have to do the math. Regardless of your age, you need to do this now. The sooner you get your target lined up in the cross hairs set, the better chance you will have of nailing it. Even if you don’t nail it, by planning you will greatly increase your chances of having a comfortable retirement. After all, isn’t this the goal?
One rule of thumb says that you will need 80% of your current income in retirement. This rule assumes that you will have less expenses in retirement. Specifically, it assumes you won’t have dependents living in the household, that your mortgage payment will be gone and that you will no longer have to save for retirement. So, if you are making $50,000 now, you would need $40,000 in retirement. Keep in mind that you need to consider your own situation. Personally, I plan to do a lot of traveling. I’d also like to have 2 different homes that I live in seasonally. So, I will probably want to have at least 100% of my income in retirement. The only wrong answer is to not prepare. Sound reasonable so far?
So How Much Will You Need To Save?
The following retirement calculator from CNN Money is a great tool in seeing how much you will need to save for a comfortable retirement. The calculator takes into account your age, current savings, desired retirement goals, life expectancy and when you plan to retire. This is a great place to start and should give you an idea of where you are today. Don’t be intimidated. The answer, in any case, is to understand where you are and improve on it.
I will be writing about retirement planning strategies in future posts. But first do this little check up and see where you are.
The CNN Money Retirement Calculator is right Here: HOW MUCH WILL I NEED FOR RETIREMENT
A Side Note: When you use the calculator, be sure to click on the additional links on the right side of the page. This will really open your eyes.
Please share your comments and suggestions that you are following to achieve your retirement goals.
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