Do Your Retirement Savings Goals Add Up?
The 2019 Employee Benefit Research Institute Retirement Confidence Survey finds that 2 out of 3 American workers feels very or somewhat confident about having enough money for a comfortable retirement. In addition, 82% of retirees feel either very or somewhat confident about having enough money to live comfortably throughout their retirement years.
How much of that confidence is grounded in reality?
According to the Department of Labor, fewer than half of Americans have calculated how much they need to save for retirement. Given we are living longer, the average America could spend roughly 20 years or more in retirement.
It’s worth taking the time to think, plan and set realistic retirement goals so your golden years can truly shine.
Here are few things to keep in mind as you are trying to figure out how much you need to save.
When will you retire?
What age do you plan to retire? Will it be in your 50s, 60s of 70s? It matters. The longer you are retired, the more savings you will need.
What about health care costs?
We’d like to think we’re healthy, but you never know what unexpected health issues may arise. What if long-term care is needed? Does your health insurance plan cover it? Health care costs are only rising so plan and save accordingly.
What is your retirement lifestyle dream?
Do you want to travel the world? Play golf or explore working a dream side gig? Where will you live? The city, state or country you live in will also influence how far your money will go. Your retiree lifestyle expectations, whether extravagant, modest or somewhere in between is a big factor in savings calculations.
Wait, what about Social Security?
It is estimated that Social Security will replace about 40% of your pre-retirement income. Experts say most retirees need 70% to 80% of their former income to live comfortably and cover expenses during their golden years.