Planning for your retirement means calculating how much money you need to live on -- not just survive, but actually live the way you would want to in retirement. If you are not sure how much that is and want to find out what you will need, there are a few ways to do it.
The first thing you will need to do is figure out how much that desired lifestyle costs. Things as innocuous as your annual food bill will have to be figured out, as well as all the other necessary expenses you have every year. [According to research by GOBankingRates, the amount Americans spend on groceries came in at number two as the most expensive monthly budget item. The survey revealed that the average amount spent every month on groceries was more than the combined cost of their car payment, household necessities, and clothing.
Unless your mortgage will be paid off, add to that your rent or mortgage payment and services like power, gas and electric, as well as phone and internet. You’ll soon see that your Social Security check won’t be enough. In fact, according to the Social Security Administration, your benefit will only replace about 40% of your income.
If you have a 401(k) where your employer also contributes to your retirement fund, you could be in a better position than you thought. Check to see how much has accumulated in your plan. The average American in 2017 had over $97,000 in their 401(k) in the second quarter of the year.
Once you’ve figured out your living costs, factor in healthcare and long-term goals. Work out how much you earn and how much you have been saving up to now. You can use a retirement calculator like this one: https://www.davidlerner.com/calculators/retirement-calculator
When you are ready to invest in a retirement annuity or some kind of portfolio, get as much information as possible from reputable sources that are trustworthy. Once you have some information and advice about different types of investments or retirement plans, you can see what matches with your needs.
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