worker dreams of a comfortable retirement. Medical breakthroughs have lead to
a dramatic increase in life expectancies. The Centers for Disease Control and
Prevention (the CDC) tracks life expectancies. You can view your projected life
expectancy by clicking here.
It is most prudent to use the life expectancy of the younger spouse, plus at
least an additional five years to the figures provided by the CDC. Because
of these longer life expectancies; we can expect to spend more years in
retirement than our parents did.
with these longer years in retirement, comes more complicated financial
planning than our parents had as well. We now have to answer questions like:
- How long will my retirement funds last?
- Am I saving enough today?
- How soon can I retire?
- How much will I need to save towards a
- How much money can I withdraw from my plan each
year, without depleting my investments before the end of my life?
- If Social Security does not last my entire
retirement, how much should I be saving?
- If my pension plan becomes default
how much do I need to be saving?
retirement calculator at http://www.retirementcalc.com can help you to create your retirement income plan. Using the retirement
calculator, you can view your retirement savings balance and plan your
withdrawals for each year until the end of your retirement. The results of your input assumptions are revealed
instantly in the retirement calculator.
From the U.S. Government's own Social Security web site "...Under
current law, if you have average earnings, your Social Security retirement
benefits will replace only about 40 percent, so you'll need to supplement your
benefits with a pension, savings or investments." This assumes, of course,
that Social Security is secure and will be around throughout your entire
retirement. Most financial planners suggest that retirees will need at least
75 percent of their pre-retirement pay, to ensure a comfortable retirement.
This percent comes from a combination of a pension, Social Security and
personal savings. Pensions are scarce, and if you are one of the lucky ones to
have a pension, these are becoming less secure. Just ask any United Airlines
percent of pre-retirement income is the usual rule of thumb. This is because
after retirement you can expect to have your mortgage paid off and your kids
off on their own. But, if your dream is to sail around the world, pay for the
grandkids travel costs to see you several times a year or start your own
business, then you will need to consider a much higher percentage. In these
cases, you should create a plan whose percentage is closer to one hundred.
Whether you are
three months, three years, or 30 years away from retirement, it is never too
early, or late, to start planning. Through the creation of the correct
retirement income plan now, you can make a big difference in how comfortable
your retirement will be. You have worked hard for what you have; you deserve to make
your dreams of a comfortable retirement a reality.
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