When you ask a financial expert how much you need to save up before you retire, the answer will usually be “as much as you possibly can.” That’s because the real answer is about 20 times what you spend in a year (less any social security or pension you expect). Since that number usually exceeds a million dollars for most households, it may seem like an impossible task.
So the real question isn’t, “Are you saving enough for retirement?” It is, “Are you saving enough for you to retire?” Here are a few questions to ask yourself so you can come up with your own personal response.
- What expenses do you anticipate? – For example, you may have no problem making monthly car payments while you are still working, but once you retire, will you be able to afford to replace your car every few years?
- What kind of lifestyle do you want? – If you plan to live in your paid-off home on the lake and fish for the rest of your days, you may not need as much as if you want to buy a yacht to sail around to world.
- Are you saving enough to meet your goals? – It doesn’t matter what someone else needs. You may need more or less. Are you on pace to have the money you need by retirement age, or do you need to make some changes?
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College Planning Source does more than just help kids with student admissions. We also help parents with financial planning, so you can help your kids with school but still have what you need in your golden years. Call us today at 858.676.0700, or you can contact us online to get started on your financial plans.