When determining how much money you will need to retire, establish how much of your retirement income is from a guaranteed source, such as social security, a pension, or a retirement annuity.
Some individuals also rely on retirement income from rental or investment properties, but keep in mind that income from these sources involves risk and is not guaranteed.
Social security statements assess how much money you will receive after working to a certain age. For example, if you work until age 65, in retirement you will receive $1,650 a month. Your guaranteed source of income from social security is $19,800 annually. Do the same math for pensions, annuities, and investment properties to figure your total guaranteed income.
Comparing your total guaranteed income with retirement expenses will allow you to develop a fairly accurate estimate of your retirement needs.
If you find that your needs will surpass your income, you’ll have to look for ways to reduce your expenses during retirement.
Chances are that once your children have moved out, you will no longer need a five bedroom home in a great school district. Consider a condo or a smaller house to help pad your nest egg. Without a daily commute, you might not need an extra vehicle. Selling one automobile will not only eliminate monthly payments, it will also cut insurance and maintenance bills. Find a prescription drug plan that works for you and takes advantage of Medicare’s cost-sharing provisions. When traveling, choose off-peak times and look for last-minute deals on airfare and hotel reservations.
While many experts provide a rule-of-thumb for calculating retirement expenses and income, retirement is too personal to depend totally on general guidelines. Talk to a Puritan Financial Professional for assistance with planning your retirement.
Puritan Financial Companies is a diversified financial services firm specializing in helping people from their peak earning years through retirement to secure their financial future. Visit Puritan Life Insurance at www.puritanlife.com. The information contained in this blog post is for informational purposes only and should not be construed as legal, tax, or investment advice.
[sociable_code]