Since Americans are now living longer than ever before, many into their 80s, 90s, and more commonly over 100, retirement resources may need to last 30 years or more.
Nearly everyone has financial challenges of some sort. As a result, many put off planning for the future.
Some people assume that Social Security will take care of them when the time comes. Then, when they reach retirement age, they find that Social Security will not provide enough income to maintain the quality of life they enjoyed during their working years.
In past decades, many retirees depended on pension plans to provide a major portion of retirement income.
However, current trends find businesses offering more defined contribution plans, which rely on employee contributions, and fewer defined benefit plans. In addition, acquiring sufficient retirement resources to last has turned into a necessity in an unpredictable economic landscape.
Today’s retirees may require 60% to 80% of their pre-retirement income in order to maintain their current lifestyles during non-working years.
What about inflation? Living expenses are likely to cost more in the future, because over time, the purchasing power of the dollar generally decreases as a result of inflation. Therefore, it’s important to factor inflation into your retirement plan. Remember, it’s never too early to start saving for your retirement.
When thinking about retirement, consider the following three steps:
1) Set your retirement goals.
2) Determine your sources of retirement income.
3) Devise strategies to address any shortfall and manage your money in retirement.
Determining how much income you will need at retirement and deciding among various savings options are the keys to your long-term success.
If you need help with this supremely important calculation, we can help!
Schedule your free retirement strategy session here.