by John Bearss
This is a question that gets asked often, but unfortunately it is really determined by your individual circumstances. Generally speaking, you should save as much as possible. You need to build a fund that you’ll be able to draw on for much of your retirement income. Believe it or not, this is fairly easy to do if you start early and make smart choices. Contribute as much as you can to tax-advantaged savings vehicles, for example a 401(k) plan, an IRA or an annuity. Then round out your retirement portfolio with other investments like stocks, bonds, mutual funds or precious metals. As you’re planning and saving, keep in mind that you may have 30 or more years of retirement to fund. So, you probably need an even bigger nest egg than you think.
Your particular circumstances will determine how much money you should save for retirement. Maybe you have a pension plan, or your Social Security benefits will be large enough to tide you over. If so, you may not need to save as much as other people. But other personal factors will enter the picture, too. If you plan to retire early you’ll have even more retirement years to fund and will need larger assets than someone who plans to work until age 65 or 70. Conversely, you may require fewer assets if you plan on working part-time during retirement.
Your projected expenses during retirement will also help determine how much money you’ll need and how much you need to save to get there. Certain costs like food, utilities or insurance will be shared by almost all retirees. But you may still be saddled with retirement expenses that many retirees no longer have like mortgage payments or a child’s tuition. Expenses will also depend on the type of retirement lifestyle you want. How many nights a week will you dine out? How much traveling will you do? These kinds of questions will give you a better idea of how much money you’ll be spending once you retire. In general, the greater your anticipated retirement expenses are, the more you will need to save each year to meet those expenses.
Since people are living longer today, the greatest fear that most retirees have is the fear that they will outlive their assets.
So make sure you have your financial affairs in order and a good way to start this process would be to contact me through the Christian Financial Advisor Network.
Disclaimer: Investing involves risk. Always do your own due diligence and consult a trusted financial professional before making any investing or financial decisions. John Bearss is founding member of our Christian Advisor Network. John Bearss is a registered representative of and offers securities through SICOR Securities, Inc., Member FINRA, MSRB, SIPC, 6500 Poe Avenue, Suite 105, Dayton, OH 45414 | (937) 890.3101. Neither SICOR Securities, Inc., Lifetime Decisions Management nor their representatives provide legal or tax advice. Please consult your CPA or qualified tax advisor before making any decisions. Lifetime Decisions Management, Inc. and SICOR Securities, Inc. are not affiliated.