As we grow older we all have the same ultimate goal—a secure retirement. However, figuring out how much we need to retire comfortably can be quite complicated. Our team at Charter Oak can help you better understand your financial requirements, so you can wisely plan around all that life has in-store for you. Financial planning isn’t just about numbers or dollars and cents. It’s about you and your pursuit of happiness. Here are some of the many factors that you should consider when planning your post-employment future:
When Should You Retire?
Unfortunately, there is no simple formula or mathematical equation that can tell us the age we should retire. In fact, it is different for everybody! On average, most people begin to plan for retirement around the age of 62 and older. However, as the human lifespan continues to grow, so does the need to fiscally support it. In modern times, many people are working longer to ensure a stress-free retirement. If you are planning your retirement, here are a few questions you should ask yourself before making any critical decisions:
- Can I afford to retire comfortably?
- What kind of lifestyle do I want?
- If I retire before 65, how will I pay for health insurance?
- Will taxes have a severe impact on my retirement income?
- How do I plan on spending my money once I do retire?
If you need further assistance planning your retirement, our team of financial advisors are ready to help you take your first steps.
How Much You Will Need to Retire?
Much like when you want to retire, how much you will need to retire strongly depends on the lifestyle that you desire. It is a common belief that an individual needs about 10 to 12 times the amount of their current income to live out a comfortable retirement. While this ballpark figure might be true for the vast majority, there are other variables that should be taken into consideration before solidifying the amount of your nest egg. While some of us want to lead a lavish retirement filled with travel and excursions, others may wish to live a simplified version of their pre-retirement life. It is true that while we may not all need millions of dollars to retire comfortably, the more money we can save the better, as life and health issues arise we should all have a plan in order to best prepare for unexpected expenses.
How You Can Determine Your Cost of Living for Retirement?
The first step in figuring out your cost of living for retirement is understanding your current expenses. Once you know how much you are spending, you will be able to create a budget that tracks your regular monetary habits. In this day and age, it is recommended that you set up a retirement fund that matches your current income. Many people assume that when retirement hits, expenses may start to decline. However often times spending doesn’t slow down during retirement; it does the opposite. With lots of extra time on your hands there will be various opportunities to travel, dine out, and take up new hobbies. Our financial advisors at Charter Oak can help you create a strategy to save the right amount of money and afford the retirement you deserve and envision.
How Long Will Your Assets Last?
When it comes to planning retirement there are many factors we can control, however planning how long we will need a steady amount of post-employment income isn’t one of them. That’s why it is best to prepare ourselves for the long haul. With life expectancy increasing, a person who retires at the age of 65 could very well live another 30 years. It’s important to take that into consideration when planning a retirement fund and budget. Our team at Charter Oak can help you strategize a post-employment budget that will keep you comfortable for more than 3 decades past your retirement date.