How Much Money Will you Need When you Retire?

Everyone hopes to have a long and  comfortable retirement.  Here are some tips to help you avoid a financial shortfall;

1. A common guideline is that you should aim to have 70% of your pre-retirement income. Don’t assume you will spend less in retirement though. Sit down and calculate what you will need and want to spend each month. Keep in mind that you may want to travel or spend on other retirement activities.  Consider creating an emergency fund for unexpected expenses.
2. Keep Inflation in mind.  Inflation averaged 3.22% from 1913 to 2013, so factor in at least 3 percent inflation per year.
3. Don’t underestimate healthcare costs. Costs are rising and many retirees report underestimating their health care costs.
4. Assume you will have a long life.  A healthy 65 year old today has a 43 percent chance of living to age 95.
5.  Working with a financial planner to help you determine how much money you may need and how to save for retirement is key to planning a successful retirement.

It’s never too late to prepare for the Golden Years! Contact Jellison CPA with your retirement questions or for recommendations on how to find a trusted financial planner.