Our Services: Retirement
Retirement
How much money do you need to have set aside when planning for retirement? How do you know that you’re still on track? Is your current strategy still working for you? Many factors affect your savings rate, including your retirement age, lifestyle, and how long you’ve been saving for. Other factors to consider are the rising cost of living, the cost of medical care, and the fact that life expectancy is up. For all these reasons, you’ll need to have more money saved and make it last longer than you would’ve in the past. Exactly how much income do you need to have saved when planning for retirement? There are many variables to consider. Thankfully, we can help you understand them better. We’re here to help eliminate confusion when planning for retirement.
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Serving Michigan, Greater Cleveland & Surrounding Areas
Budgeting for Retirement
One of the most important parts of planning for retirement is setting up a budget. A realistic retirement budget considers all of the money you’ll spend each month. This is the foundation of a competent retirement. First, you should start with basic expenses. Healthcare, housing, transportation, and food are essentials that need to be defined in your budget. Next are “extra” items such as traveling, dining out, gifts, et cetera. You should also have room in the budget for enjoying your retirement. Last, you should keep an “emergency fund” to cover any unfortunate unforeseen expenses. Even if you don’t use this, it can go right back into saving. Having a little wiggle room each month can definitely help you in retirement.
Inflation
Inflation is another vital factor to consider when determining how much to save for retirement. Each dollar you save will technically depreciate over time. The Fed typically aims to keep inflation at around 2% annually. That probably doesn’t sound like a lot, but it’s a crucial factor to consider.
Let’s say you need $40,000 per 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. After ten years, your needs jump to somewhere around $49,000 Therefore, you should take that into account when determining your yearly expenses. Add a compounding yearly 2% to how much you’ll need. An effective retirement strategy requires figuring out how much income you’ll need years and years into the future. We can walk you through this process.
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We Can Help
Contact us to schedule a one-on-one meeting, or attend one of our no-cost, no-obligation educational seminar events. These events come with a complimentary gourmet dinner, and we’ll go into further detail about the various factors that impact your retirement.
