How Much is Enough?

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September 20, 2019
How Much is Enough?

Image Copyright Ted Grussing Photography – Used with permission

If you would like to retire someday, as most of us do, you have probably asked yourself this question.

Maybe we should stop thinking about retirement in terms of absolute numbers.  After all, it’s all relative.  And most people will retire with less than they plan and make it work. There is no one-size-fits-all number, because we all have different needs and desires to consider for post-retirement living.

According to a recent Charles Schwab survey, most people believe they need to save around $1.7 Million.  If you are struggling to figure out how much to save, here are a few tips to consider:

  • Save as much as you can now. Do your best to contribute the maximum amount that you can to your employer’s retirement plan or any IRAs that you have.
  • When you become eligible to collect Social Security, try to wait as long as you can. If you hold off, you can earn delayed retirement credits for each year you wait past your full retirement age. The credits can increase your monthly benefit by about 8% per year, up to age 70.
  • Once you do retire, do your best to limit your spending. It’s best to take no more than 4% or 5% from your retirement funds each year in order to help your money last as long as possible.
  • Consider working part-time at something you would really enjoy. That will not only boost your income, but keep you up to date with what’s going on in everyday life.
  • Downsize your living expenses, like your house. You can still maintain a beautiful life style without the upkeep of a large house.  Free yourself from many expenses that are no longer necessary.

A person may retire at whatever age they please, but whenever you plan to retire, it is wise to create a strategy now.  A Certified Financial Planner™ professional can help you set and work toward your targeted retirement age and goals.  Whatever your plan is, you don’t want to worry about outliving your money.