By Evan Vitale
In continuing with our blog discussion on planning for your retirement, the biggest question is always “where do you begin to plan for your retirement” especially when it comes to estimating your retirement income needs.
Ask yourself: Do you wish to retire and live off only your retirement savings or do you plan to work in retirement to supplement your retirement savings?
As you read this – and you’re not retired – do you need to continue saving in order to better meet your retirement goals?
These questions (and your answers) will help you generate estimates, savings goals and other considerations that are important when it comes to formulating your retirement plan. Your financial planner can help you with your estimates and make sure that you’re in a good financial position so that you can retire when you want and the way you want.
One of the most simple – and difficult – questions to ask yourself in order to get started planning for your retirement needs is this: How much income do you think you’ll need in order to retire comfortable on an annual basis in your retirement years. Consider what you would like your retirement lifestyle to be. For instance, do you want to travel? What about healthcare expenses? Are there other expenses that you think you might have during retirement that you don’t currently incur?
A good place to start is by using your current income as a benchmark. Depending on your financial retirement goals, your desired retirement income can be a percentage of your current income – 60-90% for example. Why is this not 100%? Well, by the time you retire, you may not face certain expenses in retirement that you are facing today, like paying your mortgage or payroll taxes. Remember, this is an estimate. You need to plan.
In our next blog, we’ll cover retirement expenses.