Planning for retirement needs to happen sooner rather than later. You need to ask yourself how much money do I need in retirement, the answer is usually about 85% of current expenses, though some retirees say that expenses go up when they retire at first, lull in the middle and due to healthcare are more inexpensive towards the end of life. You can figure a withdrawal rate of 4% to last you 30 years, and go from there. Add up 401k’s and investments, Social Security benefits and any other income streams you might have. Go from there and then decide how much more you will need. You might find yourself beefing up your contribution now, and then taking longer to retire, as you get larger checks when you hold off.
Key Takeaways:
- Retirees often have high spending both early on and near the end due to medical expenses.
- Many advisors say you can withdraw 4% a year in retirement without drawing down your portfolio.
- Most people save for purchases and emergencies but don’t invest, which is a problem.
“A successful retirement depends not only on your own ability to save and invest wisely but also on your ability to plan.”
Read more: https://www.investopedia.com/retirement/retirement-income-planning/
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