What Do You Need For Retirement?

By: Jody Smith

Retirement age is no longer automatically reached at 65, but whatever age you are when you retire, you're going to want to do some research well in advance. Questions will need to be answered with more than a wing and a prayer.

Do you know how much money you will need to be able to retire with security? To come up with your own unique answer for your own unique situation, there are a few things you should look at.

For instance, what do you spend every month when you pay your bills? You'd be surprised how many people have never sat down and figured this out. Or maybe you wouldn't be surprised. Maybe you are amongst this number.

But better late than never. Add up your monthly payments, annual payments, and total debt. Think realistically about how much you spend, and how much you'd like to be able to spend in the future on holidays, travel and other luxuries.

Do you know what your assets are? Do you know how much you have in any types of savings? This is where you'd look at a 401K, or any pensions. Are you near the age to qualify for social security, or is that a ways off yet? Health insurance costs is another thing to take into consideration.

You may be in good health now, and you may stay that way. But the future is always notoriously hard to see from the present and it's smart to plan for the possibility of future health care needs.

Everyone's situation is unique. But there are a few general guidelines that may help you get a clearer picture for yourself.

One suggestion is that you should plan to have 70-80 percent of your current income from your working years, as you go into the years of your retirement. Or consider withdrawing no more than 4 percent from your savings. This could maintain your savings for 30 years.

You may find that you keep coming back to a disconcerting question. All of this is going to be affected by one pivotal unknown. How many years do you want this money to last for? In other words, how many years you will be around?

This glimpse at our own mortality may be one reason why many people don't look as closely, as early, as they should at their retirement savings. But getting old is not for the squeamish, and if you haven't realized this fact before now, it is going to get harder to avoid as time goes on.

Get proactive about your retirement needs early on, and when you are old, having savings to support yourself with, you will be glad you did.

Jody Smith is a freelance writer for EmpowHER.com.

Sources:

How to Determine Your Income Needs For Retirement Planning

http://www.goodfinancialcents.com/how-determine-retirement-income-needs

How Much Should You Spend in Retirement?

http://www.goodfinancialcents.com/how-much-should-you-spend-in-retirement/

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