How much should I save for retirement?
By Ralph Quintana
Many Americans realize the importance of saving for retirement. Knowing exactly how much they need to save is another issue altogether. A rule of thumb is that retirees will need approximately 80% of their pre-retirement salaries to maintain their lifestyles in retirement. The amount you will need may vary depending on your life style choices, higher or lower.
Do you want to travel? Are there any hobbies you’d like to peruse? Do you really want to work part time after retirement?
Other things to consider;
Retirement Age and Life Expectancy – The earlier you retire, the more money you will need to last throughout retirement. Although you don’t know what the duration of your life will be you should take into account your family history. Also, life spans are increasing and with improvements in medical care more people will be living to age 100 or longer.
Future Health-Care Needs – Health-care costs have been rising much faster than inflation and Long-term care is another consideration. These costs could severely dip into your savings.
Inflation – Inflation has the potential to lower the value of your savings from year to year, significantly reducing your purchasing power over time. It is important for your savings to keep pace with or exceed inflation.
People don’t plan to fail… They fail to plan!!
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