In a recent DebtHelper.com article we touched on the subject of preparing for retirement. Let’s take a closer look at preparing for retirement…
If you are like me, with fewer working years in front of you than behind, the thought that continuously enters my mind is, “Am I going to have enough money to retire”.
I have to admit that I often “freak out” over the thought of reaching retirement age. And it seems that I am not alone. A recent Gallup poll found that over 50 percent of people surveyed were “very” or “moderately” concerned they will not have enough money for retirement.
There’s no doubt that everyone wants to retire at some point in their lives… and keep living the lifestyle, or at least close, they are used to. But how much do you need to retire?
Do you need $1 million? Maybe $2 million? 10 times your current yearly salary? …I wasn’t sure, so I put pencil to paper and tried to figure it out…
There are a lot of variables, will you retire were you are? Will you move to another state? Or scale down to a smaller place? The first step is to try and figure out what your expenses will be when you retire.
First, figure out how much you will have to spend on living expenses… a good starting point is to use your current expenses.
You can get a good idea of your situation by comparing your income to your spending… sounds simple, but it is at best, a rough estimate.
Add up your savings and retirement accounts. Use the “4% Rule”. Many planners suggest that you can withdraw 4% of your retirement savings a year without outliving your money. So if you have $250k saved, that’s $10,000 a year. …can you live on that?
Don’t forget Social Security (if it’s around when you retire), go to the Social Security Administration’s website and use the retirement estimator.
There’s still more work to do, and we’ll finish working on estimating the amount of money you need to retire in a future article.
If in the meantime, if you find yourself struggling with debt or would like to find out about becoming debt free, call Debthelper at 800-920-2262, or visit @ www.debthelper.com.