It’s one of the most common questions we hear as financial professionals – “How much money will I need for retirement?” The answer varies for each individual based on their aspirations and goals. But, a general rule of thumb is that you’ll want 65% – 85% of your pre-retirement income available each year during retirement.
Retirement Questions to Ask Your Financial Professional
Do I have enough savings to retire?
Before deciding to retire, an evaluation should be completed comparing current savings to future income needs. Reviewing a Monte Carlo simulation can be a helpful exercise to gauge the sufficiency of current retirement savings, while also estimating what might be left for beneficiaries.
Does my portfolio allocation reflect my longer-term goals and needs?
Given the potential for a retirement which could last 30+ years, it is imperative to have a portfolio allocation which is anchored to longer-term goals, risk tolerance and time horizon.
Some retirees may think retirement signals a time to “de-risk” the portfolio, but one cannot overlook the importance of continuing to grow portfolio assets during the retirement years. When you and your financial professional understand your risk tolerance, you can come up with an investment strategy to satisfy your risk tolerance while striving to reach your long-term goals.
How long might my savings last relative to my income needs?
Periodically revisiting a retirement plan can be helpful to alleviate any concerns of running out of money.
Your goals and needs may change over time; your retirement plan should have the flexibility to adjust accordingly.
Common Retirement Mistakes
There are many considerations to think about when saving for a comfortable retirement, including common mistakes that can be avoided.
- Saving too little and/or starting too late
- Retiring too early
- Assuming maximizing 401(k)/403(b) contributions will fully provide for future retirement income needs
- Underestimating lifestyle
- Underestimating longevity and future health care expenses
- Assuming too much risk to “catch up” for a savings shortfall
- Holding too large of an allocation to a few securities and/or company stock
- Filing for early (reduced) Social Security benefits despite expected longevity
The Emerj360 team specializes in financial planning and has the expertise to help you create a retirement plan tailored to your goals. We take a 360 degree look at your financial situation. Set up a meeting to get your retirement questions answered or to start your plan.
