Retirement Income Goal
Retire On Track LLC.
If you do not have a ready answer to this question, you are not alone - most Americans do not have a retirement income goal. That does not mean you should not know what your goals should be. But, before you establish your retirement income goals, you should know your retirement income needs, to ensure you do not fall short of the correct goal. Most financial experts agree that you will need at least 75 percent of your pre-retirement income in retirement to maintain your standard of living.
To find out if your retirement plans are on track, use a retirement calculator, like the one found at retirementcalc.com. This will help to identify if there is any shortfall with your current plan. If there is a shortfall, you can plan to work more hours or for more years, take a smaller annual withdrawal amount, and/or increase your savings rate. The retirement calculator allows you to effortlessly plug in these "what if" scenarios into the retirement calculator until you no longer have an investment shortfall.
Elimination of any investment shortfall must be your top priority. But, let's face it - no one really wants to cover their retirement plan shortfall by working more hours or working longer for your employer. Also, taking smaller annual withdrawal amounts in retirement to meet your retirement shortfall may make your retirement years very uncomfortable. The best plan involves increasing your current savings rate and economizing. Every penny counts. Even saving an extra $100 a month can make a tremendous difference in how comfortable your retirement will be. Assuming an 8% return on your investments of $100 a month and that your current age is 50, would give you $34,747 at age 65. The table below gives more examples based on the rate of return and the amount saved per month.
You must also commit to educate must yourself about finances. This does not mean you have to depend solely on your own financial talents. Even the most seasoned investors need some professional retirement planning help. To start building a financial plan, try a FREE subscription to our Newsletter Financial Tip & Hints.
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