Updated: Jul 26
Retirement is one of the most talked about topics in the world, yet so many either fail to plan, or have a very basic plan. We work all of our lives for this ‘time’, and we spend so much time thinking about it, but we often don’t sit down with a professional and write out a plan. A plan to get there, and then a plan once we are there.
How much do I need for retirement?
This is the question on everyone's mind, and rightfully so! Since most companies have ditched the old Pension and golden parachute plans, this is all on you! Scary right! Well, it doesn’t necessarily have to be. If you are reading this then you are well on your way to making sure you understand, and that is a powerful step unfortunately not everyone takes.
So now that you made this step, which we applaud, what in the world is next? Quite simply, you need to determine what amount of money you will need, and it needs to be adjusted for inflation. Some people use 2%, some 3%. We like to use 2.5% as your equation. Next, grab a spreadsheet, or napkin and pen if you prefer, and let’s get to work (click here for a template). Begin listing out all of your potential expenses clearly. You will have two emotional categories here, one for absolute needs, and one for wants. You can separate them out as you see fit. You may ‘need’ that trip to Fiji as a way of fulfilling your life’s dreams. None the less, you will need to outline everything you want to do in your retirement years. While you want to calculate this month on an annual basis, you can roll it up to years to clearly see. Please note, you likely will not be spending as much at the age of 90, assuming you are properly insured, as you are at age 67, so please keep that in mind.
Next, line up your income sources. This includes social security, rent on a house or condo you may own, a possible pension if you are in the educational services or of the age where it wasn’t near extinction, and anything else.
Some additional things you need to note that are quite important. In terms of assets, many do not consider the primary residence as a potential income source, and that might be a mistake. Downsizing during retirement might be a way to have a better lifestyle while utilizing your assets you have. Also, postponing certain needs, like Fiji, and offering your assets time to grow can be helpful to the overall plan. It is very important to come up with a spending plan. This is important both pre and post retirement.
Here is a whitepaper <<Would want a PDF Pop-Out With Lead Capture>> we have created to help you further your education!
In the end, it is wise to have an advisor, the good ones can help you and that is why we all have a job!
I am in or about to Retire!
For most people, going into retirement doesn’t mean you are going to sit on your a** and watch TV. While we don’t judge those that might want to, it is not typically the norm. We can help work with you to budget and allocate your assets to help meet your objectives; whether that is traveling, downsizing and having a second home, or starting a small business – we can help you plan side-by-side with your dreams.