Retirement may seem like it’s pretty off for those who are
part of the X and Millennial generations. However, as has always been the case,
retirement has a way of creeping up on people.
With retirement not quite as far off as it seems, it’s
important for the members of these two
generational groups to have a solid
estimate of how much they need for retirement. After all, they need to be
saving for it now.
In a perfect world, everybody would be able to save about a
million dollars before retirement. However, in today’s far-from-perfect world,
that number, or even half of it, can be downright impossible to save in a
lifetime. Thanks in large part to a poor housing market, student loan debt,
credit card debt, and just lots of debt in general, saving for retirement has
never been harder.
Plus, as nice as it would be for everyone to have a million
dollars, not everyone really needs that much. The actual amount of money needed
to retire comfortably will vary greatly from one person to the next. Generally
speaking, though, most people need at least 10 to 15% of what they made before
retirement coming in yearly in order to live comfortably.
With that said, calculating a retirement estimate isn’t all
that difficult, as long as one realizes it’s not going to be an exact figure.
People first need to think about how much they spend each year and then compare
that to how much they’re likely to spend once they retire. Obviously, this
projection will depend quite a bit on what the person plans to do during
retirement.
Those who plan on moving somewhere more affordable will
obviously have a lower projected expenditure during retirement, as will those
who will have Social Security income. Conversely, those who plan to travel and
explore in their post-working years will likely have more expenses.
Once you have a pretty good estimate of how much you’ll need
to live comfortably during retirement, the next step is to figure out a
workable per-year savings to get you to that estimated figure.
If you can’t save enough, then you’re either going to have
to earn more money or rethink your retirement lifestyle.
Fortunately, you don’t have to go through all of this
difficult planning and figuring on your own. With the help of a skilled financial
advisor, you can come up with a savings plan that will get you to where you
want to be in terms of retirement income, or at least somewhere in the
ballpark.
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