How Much Savings Is Necessary For A Comfortable Retirement?
As you begin your financial journey, as a high school or college graduate, you may give a fleeting thought towards retirement, and tuck it away for safekeeping for when you REALLY need to start planning for retirement. As the years go by, expenses get higher. You get married, have children, the children have medical expenses, and private school tuition. Eventually you’re helping to foot the bill for college. By the time those expenses are all said and done, you are 50 years old, still paying on your mortgage, with very little set aside for your own retirement. If I’ve just described your current situation, don’t be alarmed, many Americans are in the same boat. However, no matter how old you are, there is no time like the present to truly consider how much you will need to salt away for a financially sound, comfortable retirement.
How Much Money Is Enough To Retire Comfortably?
How much is enough, is a very arbitrary question. Every person has different goals and dreams for their own retirement. And how much you need to save is dependent on how much you desire to spend. Most financial planners will tell you if your goal is to maintain your current lifestyle in retirement, you will need to have around 70-80% of your annual income at your disposal per year. If you have the idea that you’re going to take part in some expensive traveling or some other extravagance, that percentage goes up. According to Investopedia, the amount of money you will need to retire comfortably is largely dependent on the following factors:
-Everyday living expenses
-Your life expectancy
-The projected costs you will be facing
-Resources set aside for unplanned expenses, such as health care.
-Your Property, do you own it? Owe on it? Desire to use it as a reverse mortgage?
-Your desired lifestyle
Talk To A Financial Planner About Saving For Retirement
If you haven’t already done so, you really should consider speaking to a Redhawk advisor near you in order to determine what your individualized retirement plan will look like. After determining your desired retirement lifestyle, an advisor can help point you in the right direction as to which investment vehicles are most important depending on your age and ability to take on risk exposure. Typically retirement is built on a 3-legged stool comprised of social security, your employer backed retirement plan and your own personal savings. The amount available to you in the first two legs of the stool will help reduce the amount of personal savings you need to come up with. Additionally, the younger you are the more ability you have to get invested in riskier ventures, which has the potential for a higher yield. For more information on how to retire comfortable speak to an advisor today and get your questions answered.