Spnding in Retirement: What Will You Need?

Planning for how much you’ll need, in terms of spending and living money, in retirement can be tricky. Everything seems so theoretical and, often, so far into the future that it’s very difficult to wrap your head around it. Fortunately, however, if you know what to think about and what to plan for, you can actually come up with an accurate figure of how much you’ll be spending in retirement and, thus, a ballpark figure of what kind of money you need to aim for.   

Consider Your Life Expectancy

No one really likes to think about when they’ll die or how long they will live. The fact of the matter is, however, that your lifespan can typically be predicted fairly accurately based on some basic factors. Think about your overall health, how long your parents and grandparents lived, and what you’re doing now to take care of yourself. This kind of information, while it may not be fun to think about, can give you a pretty good idea of how long you can expect to live.

Once you have nailed down your estimated lifespan, you will want to consider the age at which you plan to retire. Considering that age plus your lifespan, how long are you going to need money? From there, you just have to figure out about how much money you’ll need per year and multiply that by your expected remaining years after retirement. This should give you a fairly good idea of what kind of number you need to shoot for in terms of retirement income.

Plan for the Unexpected

While you will do well to be honest with yourself about how long you can expect to live post-retirement and how much you will need in those years, it is always good to give yourself a little leeway for those unexpected things that can happen in life.

Many older people, for example, encounter unexpected health problems or medication needs that can end up costing them big in terms of medication costs, hospital bills, or long-term care. Because these kinds of surprises can strike at any time, it is always wise to save a little bit more than you actually think that you will need.

If all of this seems a bit harrowing to you, know that you are not alone. You also do not have to go through this planning process alone, and you really shouldn’t. To get a realistic, fact-based idea of how much you’ll need in retirement and to get set up with a plan of how you can achieve that monetary goal, do not hesitate to contact a skilled financial planner who can take care of all of the hard stuff for you- allowing you to think about all the joys and good things that await you in your retirement years