If you ask 10 different people about their approach to retirement income planning, you’re likely to get 10 different answers – but the thing they have in common is that they all recognized how important planning was to begin with.
Thankfully, estimating the amount of money that you’ll need to retire in comfort isn’t actually as difficult as a lot of people assume it to be. You just need to keep a few key things in mind to make sure you’re approaching the process in just the right way.
Estimating Your Retirement Income Needs
The most important thing to understand about estimating your retirement income needs is that there are many, many different variables at play that will ultimately affect how much you need to save by the time your big day arrives.
Obviously, both your current age and your estimated age of retirement will play a big role – as someone who is older and who wants to retire within the next few years will likely need a more aggressive savings strategy than someone who is under the age of 45 and who won’t be retiring for another few decades.
Likewise, the total number of years you plan to actually spend in retirement will play a huge role, as you’ll want to make sure that you can not only maintain your lifestyle but that you’re also accounting for things like unexpected healthcare savings.
Other Considerations for Your Retirement Estimate Calculator
Of course, the initial balance that you have in your retirement income accounts is also a major issue to consider – someone who has already started saving in some capacity will have different options available to them when compared to someone who is essentially starting from scratch, regardless of age.
As an example, someone with a starting balance of around $250,000 in retirement income accounts who is A) 45-years-old, B) wants to retire at 65, and C) makes annual contributions of about $2,000 will have a monthly retirement “income” of about $2,400 after taxes and inflation are accounted for. That could reasonably sustain someone for about 30 years of retirement income needs – again illustrating why it’s so important to start thinking about these types of things sooner rather than later.
If you’d like to find out more information about how to best estimate retirement income, or if you’d like to learn more about our free educational workshops designed to help make sure you have everything you need to enjoy your retirement income in the way you always wanted to, please don’t delay – contact Fortified Retirement today.