Early retirement is a dream for most Americans, but most would settle for knowing that they’ll have enough savings and investments to let them comfortably enjoy their families, friends, hobbies and travel once they choose to transition out of work life. Yet, according to the Employee Research Institute, in 2015, only 48% of workers (and/or spouses) had tried to calculate how much money they would actually need to save for a comfortable retirement. If you’re still putting off that exercise, or you’re simply guessing, you may be in for a shock. What you think you’ll need and what your savings patterns point to are often two completely different numbers.
Thanks to medical advances, nutrition and many other factors we’re living longer – a sharp two-edged sword when it comes to retirement planning. The average life expectancy in 2010 was 85.2 for a woman and 82.6 for a man, according to the Social Security Administration and that number will continue to increase. It’s also far from an end-point number: you may live a good 30+ years after you wave good-bye to your employer. Add uncertainties about safety nets like Social Security and Medicare, inflation and the future impact of our growing national debt and most adults would rather avoid the retirement equation conversation altogether.
However, it’s arguably the most important discussion you should have with a financial expert. If you haven’t yet had that conversation, do yourself and your loved ones a big favor and schedule that appointment today. You’ll walk away with a clear vision of today’s most effective retirement saving strategies.
Here are just a few of the questions that you’ll need to answer in order to stay the course:
Whether you’re 22 or 42, if you don’t know your target retirement age and the monthly income you’ll need to enjoy it, it’s high time to fire up a calculator or meet with a financial professional.