Know When You Can RetireHow long will you need to work to ensure you have enough in retirement savings before leaving the work force? To find that answer, you need to understand how much you should have set aside for your retirement years. Financial experts agree that you’ll likely spend 75 to 85 percent of your current salary each year of your retirement. For example, a 40-year-old worker making $80,000 a year, wishing to retire at age 67, should have $2.2 million in retirement. You can use this retirement savings calculator to help estimate how much you need in the nest egg. Include Medical CostsWhen you retire, you’ll likely not have a mortgage payment, but other costs will be similar to what you’re currently paying. One expense that you’ll need to factor into your monthly cost is medical care. Ideally you’ll be in superb health, but as we age, so do our bodies. Your health insurance costs, medication, doctor visits, or the need for specialty treatment should be factored into how much money you’ll need during retirement. The Employee Benefit Research Institute reported in 2015 that a woman retiring at age 65 will need approximately $140,000 to cover medical expenses in retirement, while a man will need about $124,000. However, these amounts exclude long-term care costs. Social Security PaymentsWhen factoring your needed retirement savings total, include your predicted Social Security benefits. For workers born after 1960, full retirement age is 67. Under certain circumstances, you may be able to start collecting Social Security at age 62, but generally waiting until full retirement age is ideal. Keep in mind, if you start collecting Social Security payments early, your benefits will be reduced by about 6% each year. If you start collecting before full retirement age, that reduction in benefits is permanent. This guide from the Social Security Administration shows the average Social Security payment to specific groups of people. Pay Off DebtIf you enter retirement before paying off large debts, such as your mortgage, or a vacation home, it doesn’t mean that your retirement years can’t be enjoyable. Make a plan for how you will spend money, including mortgage payments, so you don’t overspend – leaving you with more retirement years than cash to live. Other debts – personal loans, credit cards, and auto loans – should be paid off before you retire, as they offer no special tax incentives. Follow The PlanStay active in your retirement plan. Don’t assume that because money is taken from your paycheck every two weeks, that your retirement savings is growing as it should. Review your numbers regularly to make sure your money is just as you expect at different points in your life. Checking on your money periodically means you’ll have time to catch problems and start saving more if needed, rather than waiting until you’ve entered retirement to discover you don’t have enough put back. Financial Retirement ServicesYou plan, you scrimp, you save for your retirement and still you wonder, “Will it be enough?” We can help you answer that question. Call us! The post Your Retirement Planning Checklist To Live Comfortably appeared first on Foguth Financial Group. from http://www.foguthfinancial.com/your-retirement-planning-checklist-to-live-comfortably/
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ABOUT USAt Foguth Financial, retirement planning is their specialty. From Social Security income planning to asset management, the Foguth Financial Group team takes a bird’s eye view of their client needs and goals in retirement to ensure that safety and growth are two foundations of every plan. ArchivesNo Archives Categories |