Figuring out your question of “how much do I need to retire” can be answered in a number of ways but we are not going to waste your time speculating here.
The simple truth in figuring out how much you need to retire on can only be answered by you looking at your financial position now and then working out what your expenses are compared to what they might be in the your retirement years.
Retirement Calculator
First thing you’ll want to do is use a retirement calculator. You can get access to one by clicking here.
Retirement calculators aren’t the be all and end all of figuring out how much money you need to retire. What they are is a simple calculation method, after adding some basic information such as age, current income, and desired retirement income and it will give you an overall figure.
Retirement calculators are just an aid in giving you a ball park figure for you to work from. What they can’t predict is life itself. They can’t determine if you’ll die before retirement, hit the lottery or suffer a debilitating injury. They can’t predict your health status either. Anything that will change your retirement planning strategy.
Retirement Planning Choices
The general consensus from experts in how much you’ll need to retire comfortably on is to take your current income and then work on a plan for retirement which will give you 70-80% of that income.
Obviously there will be expenses you incur now that you will want to cut down or cut out completely on by the time you reach retirement but the 70-80% rule is pretty much what many financial planners will work on. Now that’s just a base figure and this is where you now need to be creative.
How Much Money Do I Need To Retire
- There are many questions you can ask yourself. Write them down and then answer them to the best of your ability and you need to be very honest with the answers.
- Do you have a 401(k)? How much are you paying into it now? Will it give you that 70-80% figure by the time you retire? If not, then you’ll have to look at increasing your contributions.
- What about your home? Will it be paid off by the time you retire? Will you keep it or sell it and move into a smaller property?
- What about bank savings? Are you putting money away each week? Are you investing outside your 401(k)? What about IRAs or Annuities?
There are many ways to get creative with retirement planning and we highly suggest you meet with a financial planner to discuss ways you can get to 70-80% of your current income in retirement and even increase upon it to make life even more comfortably financially.