Will you be able to retire? Good Question!
Imagine yourself as a 46-year-old woman married to a 48-year-old-man. Both of you have a career.
- Your combined income is around $250,000.
- Savings in retirement plans totals about $400,000.
- You would like to retire when he is 62 and you are 60.
Unless you have prepared a retirement plan you don’t know.
There are a lot of moving parts that affect your retirement. One of the biggest questions is how much it will cost you to live when you retire. Each person is different; expectations for your retirement lifestyle are different than your neighbor’s. Here are just a few of the things that factor into how much it will cost to live once you retire:
- Your basic living expenses; your “needs.”
- The cost of your “wants” and “wishes” above your basic expenses (travel, cars, weddings, education, gifts, etc.).
- Life, disability, health and long term care insurance.
Then there are the other factors that determine what it will cost you to retire.
- The age at which you want to retire.
- The number of years in retirement.
- What happens when one of you passes on?
What are your income sources in retirement?
- Spousal income and, in two income families, the age at which each spouse retires.
- Your pension benefits.
- The age at which you apply for Social Security.
What are your personal investment assets to supplement your income sources?
- The value of your investment assets at retirement.
- The estimated return on your investment assets.
- Your risk tolerance.
- The rate of inflation during retirement.
The good news for this couple is that they have a decade or more to adjust their savings or their retirement goals. Unfortunately, too many people leave the planning until too late.