Determining how much money you need to retire on can be a
daunting task. For you, retirement may be as many as 40 years away.
However, it's never too early to determine how much money you'll need to
retire. This may seem tricky to determine an amount you may need
decades away. However, if you follow this simple formula you should have
more than enough money to enjoy a comfortable carefree retirement.
The first thing you need to do is try to determine what your expenses will be in retirement. Do you plan on owning a home and will you have a mortgage? Or are you planning on renting so that you don't have to deal with maintenance? This can be tough, especially if you are younger and you have no idea where you will even be living in the next 40 years. However, if you are near retirement age you will probably have a better idea. Additionally, you should come up with an amount for basic necessities such as food, utilities, and insurance.
Next, you'll need to determine what kind of income you would like in retirement. A good rule of thumb is to have 80% of what your working salary was. You should consider whether you're an active person that plans to travel and participate in expensive activities. Or perhaps, you are someone that doesn't spend much and you are happy with low-cost hobbies such as gardening and painting.
Once you have an idea of your expenses and income needs the final task is to calculate how much you need to save. There are several online calculators that you can plug your numbers into that will give you the amount you need to save each month. When you're doing these calculations keep in mind that life spans are increasing at an accelerated rate. Many people in the near future will be living well into their 90s and there will be many that make it to 100. This longer lifespan means you will possibly need more money to retire.
Retirement planning doesn't have to be a stressful task. Just remember to determine how much money you would like to live on, factor in your expenses, and decide how much you need to put away each month. Don't get stressed out when it comes to retirement planning. Follow this advice and you should have plenty of money to make it through a great retirement. Hey maybe you'll even be able to retire early!
The first thing you need to do is try to determine what your expenses will be in retirement. Do you plan on owning a home and will you have a mortgage? Or are you planning on renting so that you don't have to deal with maintenance? This can be tough, especially if you are younger and you have no idea where you will even be living in the next 40 years. However, if you are near retirement age you will probably have a better idea. Additionally, you should come up with an amount for basic necessities such as food, utilities, and insurance.
Next, you'll need to determine what kind of income you would like in retirement. A good rule of thumb is to have 80% of what your working salary was. You should consider whether you're an active person that plans to travel and participate in expensive activities. Or perhaps, you are someone that doesn't spend much and you are happy with low-cost hobbies such as gardening and painting.
Once you have an idea of your expenses and income needs the final task is to calculate how much you need to save. There are several online calculators that you can plug your numbers into that will give you the amount you need to save each month. When you're doing these calculations keep in mind that life spans are increasing at an accelerated rate. Many people in the near future will be living well into their 90s and there will be many that make it to 100. This longer lifespan means you will possibly need more money to retire.
Retirement planning doesn't have to be a stressful task. Just remember to determine how much money you would like to live on, factor in your expenses, and decide how much you need to put away each month. Don't get stressed out when it comes to retirement planning. Follow this advice and you should have plenty of money to make it through a great retirement. Hey maybe you'll even be able to retire early!
This blog is dedicated to helping
investors achieve financial independence!
Article Source:
http://EzineArticles.com/expert/Andi_Sachs/516635
