So how much do i need for retirement really? Part of the scariness or vagueness of that question is what makes people nervous about the actual answer. We are taught that retirement is a long ways off so who needs to really think about it and I will deal with it later.
One of the things that makes putting off retirement planning is that we don’t really know how much we are really going to need. The generally accepted number is:
One Million Dollars!
Yikes! That is a big number and I am not going to lie it kind of is overwhelming. But that is not the number required for everyone and everyone’s situation is different. So, where do we go to find what is a number for us to shoot for?
Well, the first place you can look is your bank! My bank you ask? Most banks are realizing that their customers are not anyway near prepared for their retirement and have not really started to save or invest for their future. So they have started to create programs that can help you get a number to give as a starting point. One of the problems with the banks is that they do not usually take into account your social security elements as well as they use a fixed investment rate which can be faulty as well. So while these can be of some use to give you a rough estimate they are not the final answer or not definite enough to rely on.
So where else do we look for a better guide? Well, one place I have used that is quite good is AARP. They have some wonderful tools for helping you get a better understanding of where you are in the retirement planning stages and what number you need to shoot for.
Another great site is social security.gov which is the link for the Social Security website. Here you can get a full listing of your benefits for your whole working career as well as what your benefits would be when you retire. They also have the ability for you to change your retirement age so you can see how much you would get if you worked a few extra years longer.
This last statement was a real eye opener for me! I noticed that I could get quite a bit more money if I just worked a few extra years before retiring. Now, of course everyone’s situation will be different but it never hurts to look up this information so you have some things to judge by. Also a note on when and how you should start your social security benefits. I would strongly encourage you to talk to either a tax accountant who specializes in this or working with your financial adviser who has been trained in some of the social security strategies. We will touch on some of these as we go along on our journey and this will be a learning experience for me too.
So until next time, please take care and let me know your thoughts.