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When you start saving for retirement, you may have a lot of questions. As you search for the answers to the unknown, the one thing you may want to know is how much money you will need to live comfortably during this phase of your life.

Although it is suggested that each year people save between 10% and 15% of their annual income For retirement, you want to be sure you have enough, and this can be done by looking at certain factors.

Saving for retirementReview your current income and expenses

What is your current source of income? How much of this income do you spend each month? When planning for your retirement, it's important to know where your finances stand today.

Estimate your future income and expenses

Your current income and expenses can actually be used to estimate your future income and expenses. Yes, retirement is years away, but you should be able to determine your future income and expenses if you know what to expect. If you know that your home and student loans will be paid off by the time you retire, you'll know that you won't have to save enough to continue making monthly payments on those debts during retirement.

Additionally, depending on your source of income at the time, you may be able to calculate how much money you will receive each month. For example, you can estimate your social security contributions just to get an idea of ​​all or part of your future income.

Consider the potential cost of the unexpected

Retirement doesn't mean you shouldn't prepare for the unexpected. You can expect to pay a monthly bill when it arrives, but what about the little surprises that life throws at you? At any moment, your car could break down, your roof might need to be replaced, or an accident could leave you paying high medical bills.

Your retirement fund should allow you to live comfortably, but it should also protect you from financial difficulties that are difficult to recover from. If you don't plan for the unexpected, a good portion of your retirement fund can be wiped out.

Consider your preferred lifestyle and spending habits

People's lifestyles vary, so what one person may find necessary, another may not. If you want to maintain your current lifestyle and spending habits in retirement, this will be important to consider when trying to determine how much to save.

For example, if your annual income of $70,000 allows you to take a few vacations each year and this is something you would like to continue doing in retirement, then you will need to make sure you have the money to pay for it. these holidays. .

Consider how much you currently have in your retirement fund

Have you already started saving for retirement? Whether the answer is yes or no, the amount you currently have saved should of course be factored into the amount you will need to save. However, having nothing in your retirement fund could be a problem, as it means you may need to save a larger sum when you start saving.

Say that you are considering retire in less than 30 yearsIf you have nothing in your retirement fund, rather than saving $300 per month, you will need to save $500 per month to ensure you reach your goal.

Saving for retirement isn't a priority for everyone. However, not saving for this phase of your life can have a negative impact on you. When planning for retirement, make sure you're making the right decisions so you don't find yourself re-entering the workforce at a time when you should be relaxing.

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