What’s Your Number?

What’s Your Number?

Most people will spend 30, 40, or even 50 years working toward retirement, putting a little away each month so that they can enjoy their golden years. But when it comes to retirement savings, how much is enough?

Determining how much you need saved for retirement is a crucial first step in the retirement planning process. The goal is to balance saving enough for your future without sacrificing too much of your present lifestyle. To figure out how much you’ll need, start by understanding your expected retirement expenses. Consider factors like whether you’ll stay in your current home, have additional or fewer expenses, and whether you’ll support family members or focus on philanthropy.

Next, evaluate your income sources during retirement. Social Security, rental income, pensions, and investment dividends may be key to your retirement budget. Comparing your expected income to your monthly expenses will give you an idea of your net monthly cash flow, which can help you determine how much you need to save. A common rule of thumb is the “Rule of 25,” which suggests you need 25 times your annual expenses saved to retire comfortably. However, a more personalized approach, factoring in factors like healthcare costs and life expectancy, can provide a more accurate and reliable figure for your specific needs.

There are a few key steps to the process, and we shared our thinking in a recent resource. https://bit.ly/3lhpSW4

Published On: October 8, 2020|Categories: Resource Center|Tags: financial planning, investing, retirement|

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