How much you will need for retirement will depend on the lifestyle you plan to lead once retired. Will you travel? take up expensive hobbies? downsize? live frugally? relocate? The key is to start saving/investing early in life and do it with every paycheck. Take advantage of 401k or your RRSP plans if offered and max out contributions whenever possible.
It is also important to stay healthy. First, because you will be better able to enjoy life and second, medical costs will most likely be greater if you are not healthy. There are many web pages on ageing, health, travelling and many may have retirement and health calculators.
The average age of retirement is officially 67 in the United States, but retirement actually starts at age 61, for many Americans. They do say that they planned to work longer. According to the Centers for Disease Control and Prevention — you should plan to be retired for at least a few decades at least 2 if not three decades.
Your longevity may vary based on things such as your work (for example, executive versus assembly line worker), diet, family health history and participation in extreme sports leagues and your sex.
The average budget for a retiree, according to Bureau of Labor Statistics (BLS) data, or an older household, defined as ones headed by someone 65 or older, spend $46,000 annually. The top three-monthly expenses for those 65 or older are housing ($1,322), health care ($500) and food ($484).
Half of a retired household’s income comes from Social Security as well as private and government pensions, according to the BLS, with personal savings and investment and rental income providing 6.9 percent.
An online retirement calculator can project a more accurate picture of your retirement readiness. It will use your current saving, spending and investment profile, and some rules of thumb about historical investment returns, reasonable withdrawal rates and, yes, life expectancy.
What if the math shows that at the rate you’re going, you’ll outlive your retirement savings? If you’re not yet retired, one of the best moves is postponing your retirement. This strategy is especially valuable for those in their peak earning years.
Besides reducing the number of years you’ll need to live off your savings, working longer allows more time for your investments to grow.
If you’re already retired and un-retiring or waiting to file for Social Security aren’t feasible, there are other ways to make up for the shortfall between retirement income and expenses.
• Leverage your home as a last resort.
• Take your investments and shop for an immediate annuity.
• Budget and reduce the amount you spend, taking out less money from your savings.
• Seek assistance from family or from the government. There are government, non-profit and for-profit programs that provide benefits to struggling seniors.
No comments:
Post a Comment