Plan Your Retirement Income Carefully and Accurately
When you are asked to look into your future, how far can you see? Can you see yourself being retired? And, how do you feel about that? If you have saved enough or maybe started saving for your retirement, you only have a few reasons to worry. For others who haven’t figured out yet the importance of saving for their retirement, they have a lot of things to learn.
We all know how important it is to plan for our retirement, where in we will be relying son our retirement income. But, where will you start? Well, there’s no easy way to do it. However, you can always start by estimating how much you will need to fund your retirement. Your specific needs depend on your goals and many other factors that can’t be foreseen. On the other hand, if you do your part of the bargain and work for your retirement income, you will have a comfortable and happy retirement years you have always wanted.
It has been suggested by many professionals that you’ll need approximately 70 % of your current annual income to fund your retirement. This could be a perfect place to start, but the question is, is it enough? Actually, the answer depends on how close you are to retiring. If you are still young and still have many years to work out for your retirement income, that approximation may not be reliable for your income needs. It is because there are still a lot things that can happen between today and the time you retire. But as you near retirement, there is only a thin gap between your present needs and the future’s. Just keep in mind that your current income only serves as a general guide, although retirement is just around the corner. To get a specific estimation of your retirement income needs, you still have to take some additional steps.
Your retirement income should be enough, better yet more, to meet your retirement expenses. This could be the reason why estimating those expenses is a big piece of the retirement puzzle. To help you get started in identifying and projecting your future expenses, here’s a list of the common retirement expenses:
§ Food and clothing
§ Housing – rent, mortgage, property taxes, etc…
§ Utilities – water, electric, gas, telephone, and more
§ Transportation – car payment and insurance, gas, maintenance and repairs, public transportation
§ Insurance – medical, dental, disability, long-term care
§ Healthcare not covered by insurance – prescription drugs, deductibles, co-payments
§ Taxes – federal and state income tax, capital gains tax
§ Debts – personal loans, business loans, credit card payments
§ Education – children’s or grandchildren’s college expenses
§ Gifts – charitable and personal
§ Savings and investments – contributions to IRA, annuities, and other investment accounts
§ Recreation – travel, dining out, leisure activities
§ Care for yourself, parents, or others – cost for nursing homes, home health aide or other type of assisted living
§ Miscellaneous – personal grooming, pets, club memberships