Do You Have To Be Rich To Retire?

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Exactly how much money will you need to have before you can retire comfortably? Will you need millions upon millions of dollars in savings? Should you just plan to keep working indefinitely?

The truth is, your financial needs during retirement will depend a great deal on your lifestyle. You might be surprised to find out you can retire comfortably on less than you thought.

The first step in knowing how much retirement income youll need is to figure out what your actual retirement expenses are likely to be. Here are some guidelines for figuring out what those might look like.
1.Take a look at your current income and lifestyle. This is the logical starting point, so youll want to take a look at what you brought home this year, as well as your basic expenses. Keep in mind that your lifestyle might change considerably after you retire.
2.Adjust for expenses that will disappear when you retire. Once the kids are out of the house, and youve left the workforce, there are some expenses that youll no longer have or that will be significantly reduced. These might include:
Your mortgage: Will your house be paid for or will you move to a smaller house when you retire? This can mean a huge reduction in your monthly living expenses.
Utilities, property taxes, and upkeep: If you plan to move to a smaller home, then the expenses associated with running a household will be reduced, as well.
Child-Related Expenses: If you have children, you know how expensive they can be. Food, clothing, tuition, extracurricular activities, even extra gas to shuttle them to and from activities: it can all add up to thousands of dollars each year. With any luck, once your children leave the nest, this portion of your budget will once again belong to you.
Work-Related Expenses: Working carries with it its own set of expenses. Commuting means car maintenance and gasoline; you need to buy office-appropriate clothingthese expenses are reduced after retirement.
3.Keep in mind that some things do get more expensive as you age. After subtracting out all the expenses that will go away once you retire, youll want to add a few things in. Namely, the cost of healthcare, including long-term care. And, the costs of any hobbies, including travel, that you intend to pursue when you retire.

Going through these steps can give you a realistic idea of what your retirement budget will look like, and this will allow you to begin anticipating your income needs and understanding how much youll need to save.

Retirement planning can seem overwhelming. Dont hesitate to let an expert guide you through the process of establishing a plan that will meet your needs.

About the Author:
Cheryl David is a leading provider of expert estate planning guidance in Greensboro, NC. For more information on rich to retire and other estate planning services, visit our website.



Article Originally Published On: http://www.articlesnatch.com


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