There are those fortunate individuals who, because of wise planning, are able to retire without having to worry about how much money they can spend after their paychecks stop. These people can afford their needs and wants from sources like pensions and social security that adjust for inflation. They have probably been saving all of their lives and have always lived below their means. Others are not so fortunate.
Most middle class retirees fund their retirement spending from Social Security, a pension (perhaps), and income from investments. Because people often live several decades after retirement, it’s vitally important to make estimates and projections about the future.
Here are just a few of the things that factor into how much it will cost to live once you retire:
Putting all these factors together is a complicated process that’s beyond the capability of most individuals who don’t work in finance. Complex planning programs have been developed that can provide answers. These answers typically provide a probability of success or failure via a procedure called “Monte Carlo” analysis.
We have found that people who begin planning early can make appropriate mid-course corrections while they still have time. It also provides them with the peace of mind. Having a well-thought-out plan for the future removes a great deal of worry an uncertainly.
If you are approaching retirement without a plan, give us a call for more information. We would be happy to meet with you to discuss your needs.
Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.