Do I Have Enough to Retire?
“Do I have enough to retire?”
It’s a vital question. Healthcare costs are rising. Everyday living expenses are up. Even basic food and housing costs more and more each year. How do you know if you have enough?
There are many pieces to the retirement “puzzle,” but, there is hope. We can find an answer to your question: “Do I have enough to retire?”
Factors to Consider
One thing to consider? Inflation. You should calculate a basic inflation rate. Most professionals agree that it’s around 2% per year in increased costs. So, take your typical yearly expenses, and add a compounding 2% to that each year. For example, if you need $40,000 each year to cover your expenses, at 2% inflation, you’d actually need $40,800 the next year to maintain the exact same lifestyle. After 5 years, you’d need around $44,000. And after 10, around $49,000. You can work with a professional to determine what the right amount of income is for you.
Meet with us. We help walk you through this process. Inflation is one element of helping you answer the “do I have enough to retire” question.
Budgeting
Expenses are yet another important aspect of your retirement strategy. You should create a budget in order to make sure you have enough for retirement. First, lay out just how much you intend to spend on essentials such as food and housing. Next, be sure to include “extras,” such as a “dining out” budget item, or a line item for gift-giving. Finally, always have an “unknown” or “just in case” section of your budget. This will protect you in the event of unexpected costs.
Is Your Money Safe?
Many stable retirement options, such as CDs and traditional savings, hardly seem sufficient any more. Company-offered pensions, for example, are almost non-existent today. Even government workers are finding they are forced to contribute more to their retirement plans than before, and that the resulting payout is less than what they had hoped for.
Riskier options, though, such as mutual funds or stocks, are also less than ideal. If the stock market crashes, your money could, too. Unfortunately, many experienced this first-hand during the stock market dips in 2008 and 2020. Many people found themselves with far less money than they had originally saved.
This is why it’s so crucial to learn more about how to protect your retirement savings. With the right combination of tools, you can do this, as well as get yourself reasonable rates of return,** and other benefits, too. We believe that you should be able to emphatically answer “yes” when asked, “Do you have enough to retire?”
