You may have a stable income with a comfortable lifestyle but what after you retire? This question haunts almost every working individual. We want to retire with enough savings to support us for a life after that.
How much savings is enough to suffice your life after retirement?
Planning your retirement
While it’s never too early to start saving for your retirement, it is also important to make realistic retirement savings goals. Whether you’ve just started saving for your retirement or have been doing it for a while and feel lost, this blog can help you set your retirement savings goals.
Setting retirement savings goals that you’ll actually follow
Savings is one area that many working individuals find challenging. Saving for a car or a house is easier than planning retirement savings because you already know the amount you need to save. With retirement planning, you can struggle with estimating how much to save and how long it will take.
But, worry not!
Retirement savings can be planned in just a few simple steps.
Set an estimated amount for retirement savings
The first step of saving is to know how much you need to save. Only then you can proceed to make a plan to save the amount. To estimate the amount for retirement, determine the amount of money it takes for you to maintain a comfortable lifestyle. By the time you retire, you may have paid off any debts or loans and may need a lesser amount to suffice your lifestyle. According to the U.S. Department of Labor, you may need around 70 percent of your pre-retirement income during retirement to maintain the same lifestyle.
You also need to figure out the number of years you’ll spend in retirement to estimate the amount of retirement savings.
Estimate the amount you actually need to save
When you have determined the amount you need for retirement, the next step is to evaluate how much of it is taken care of and how much more you need to save. Estimate the amount of money you can receive from Social Security or if your job offers a pension after retirement. You can then subtract this amount and have an estimate of how much you need to save by yourself to have a comfortable retirement. Then you can estimate how much you need to save monthly and yearly to reach the goal.
Keep track of your progress
After having a monthly and yearly savings goal in hand, the next challenging part is to actually follow it. The best way is to just separate the amount you need for your retirement as soon as you receive your income. Keeping a tab on expenses, separating needs from wants, and prioritizing are the key to saving successfully.
You may also need to take into account the important events or occasions where you’ll need to spend extra money. If you’re getting married or celebrating an occasion with a big expenditure in the future, it shouldn’t interfere with your retirement savings goals.
