As you approach retirement, it’s easy to become fixated on the magic number—a pot of money large enough to allow you to retire comfortably without outliving your savings. But figuring out whether you can afford to retire requires math, not magic, along with a thoughtful analysis of how you plan to spend your time and money. On the following pages, we’ll help you come up with a realistic estimate of how much money you’ll need to retire in style. // Plenty of online calculators will help you figure out whether you can afford to retire based on the amount of money you’ll need to replace a specific percentage your current income. A popular rule of thumb, for example, suggests that you should plan on replacing 70% of what you currently make, or 80% if you want to live large. But this guideline is deeply flawed, financial planners say. During their early years in retirement, many retirees end up spending as much as or more than they did when they were working, says Jennipher Lommen, a certified financial planner in Santa Cruz, Calif. // However, if you were to move to a lower-cost area, say, or stop supporting adult children, your living expenses could drop in retirement. When you retire matters, too: If you retire before age 65, for example, you’ll need to figure out how to pay for health care before you’re eligible for Medicare.
To come up with your own magic number, you need to figure out how much you’ll actually spend in retirement, which means coming up with a comprehensive retirement budget. Only then can you determine whether your savings and other sources of income are sufficient to finance the lifestyle you’ve envisioned.
Bu hikaye Kiplinger's Personal Finance dergisinin February 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Kiplinger's Personal Finance dergisinin February 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
MAKING A DIFFERENCE IN THE LIVES OF DISABLED VETERANS
He suffered grave injuries in the line of duty. Now he helps other veterans who have disabilities.
DO YOU NEED UMBRELLA INSURANCE?
A policy can protect you from financially devastating events.
Navigating Finances as a Blended Family
Money matters can get complicated when two families unite. Planning is key.
BREAKING UP WITH YOUR BROKER
Be aware of these challenges when you move your money to a new home.
CHOOSE A MEDICARE PLAN THAT'S RIGHT FOR YOU
Consider your health care needs over the long term as you weigh costs and coverage.
Keep Faith in These Stocks
IN 1997, I coined the phrase “faith-based investing.” It has nothing to do with religion or with picking stocks at random.
OUR ESG PICKS ARE THRIVING
Despite an ongoing backlash, our favorite stocks and funds focused on environmental, social and corporate governance issues had a good year overall.
MONEY MANNERS FOR THE MODERN AGE
The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
ELECTION 2024: POLITICS AND YOUR PORTFOLIO
Who wins the White House matters—but only at the margins when it comes to your investments.
YOUR GUIDE TO OPEN ENROLLMENT
With health care costs on the rise, it’s critical to select a plan that fits your needs at the right price.