When it comes to retirement income planning, do you feel like you’ve missed the boat?
Learning how fast money grows for those who start saving in their 20s can be discouraging when those years are behind you. But before you resign yourself to working ‘til you’re 92, read on. You can’t turn back the clock, but there are ways you can catch up.
The first thing to do is take stock. You’ll need to know just what your situation is before you decide how to proceed. Here are some simple steps to take before you press the panic button.
- Make a list of all your savings and investment accounts, as well as any other assets you have. If you know their average rate of return, and can guesstimate future contributions, you’ll be able to estimate growth over the next 10, 20, or X years until you retire.
- Speaking of which, when do you plan to retire? While none of us can know exactly what the future holds, it’s best to have a goal in mind. Think about when you’d like to stop working: in a perfect world. That gives you the number of years to shoot for.
- When you’ve figured out how much money you have, and how much you’re likely to have by that ideal retirement age, it’s time to calculate how much you’ll actually need. Think about how you’d like to spend your retirement years, and ask yourself retirement income planning questions. Will you want money to travel? Will you sell your house and downsize? Would you like to be able to buy a second home? Will you be able to cover any extra health care costs you might have? (Take the Are Your Current Savings Sufficient? assessment to see if your savings will be enough to cover your needs.)
Your Retirement Reality Tip
Remember, if you’re behind in your income planning, you may be able to start making “catch-up” contributions to your 401(k), Roth IRA, and other qualified retirement accounts on your 50th birthday.
Once you’ve done all these things, go to our Creating a Retirement Budget worksheet to figure out financial planning basics, and how your expenses are likely to add up.
Does this process feel overwhelming? If so, working with a licensed insurance or financial professional can be a lifesaver. The right person can not only help you assess where you are in your retirement income planning, he or she can help you figure out where to go. Licensed professionals can talk to you about creating a stream of guaranteed income* to supplement your retirement savings. Contact usto talk with one of our team members about working with a licensed insurance professional.