Retirement Planning

As the baby boomer generation gets older and gets ready to retire, this becomes a very pressing question.  It’s often very difficult to know exactly how much money you’ll need to save to have a decent retirement. One of the reasons that it’s so difficult is that you don’t know how long you’ll need that retirement money. If you live to be 80, and you stay in the home that you’ve already paid off, you’ll need a lot less money than if you live to be 92 and need to live in a retirement home for 10 years.  Here, we offer some tips and suggestions for starting to save for retirement.

The general rule is that you’ll need 70%-80% of the income that you now make for your retirement.  If you put together a detailed spreadsheet of all of your preretirement monthly expenses versus your income you’ll have a good idea of what you spend now.  Then, take a look at your expected retirement expenses versus your expected income. The income when you retire should include pension, Social Security, investments, inheritance, etc.  Hopefully, from these statistics you should have a basic idea of the percentage of your present income that you’ll need to be comfortable during retirement.
You should definitely be conservative when planning for retirement.  Have a financial planner run the numbers for you to make sure that your calculations make sense.  Once you retire and assume that you are living off of these amounts, it will be very difficult to go back to your old job or to figure out a way to bring in more income, should your numbers end up being inaccurate.