I’m Elizabeth Ody of Kiplinger’s when you look at the question that’s getting increasing
attention these days. How to pay for retirement? Trying to figure out how much money you need
to pay for secure retirement is particularly involve now as the first wave of the baby boom moves
into there 60’s. Some expert says you need 80% of your pure retirement income to maintain your
lifestyle in retirement, other say 100% or even more. What you really need to do is make realistic
estimate of what you’ll be spending after you leave the work force on housing, food, healthcare,
taxes to travel and so on. Then subtract any guaranteed sources of income such as social security
and the company pension if you’re fortunate enough to have one.
If it’s a short bulb and they’re probably will be you will have to make it up from personal
savings. Then how big enough you need to fill the gap for the rest of your life. When
conservative rule of thumb suggested if you want your money to last long you do you should
spend no more than 4% of it in the first year of retirement. Then you increase your spending each
year just enough to keep up with inflation. Under that theory if you start with $500,000 you can
spend just $20,000 of it in your want. But what if you need a lot more than $20,000 will one
interest to save more before you retire, another solution would be the delay retirement for a year
of two or more rather than among the idea of working longer, think of it is winning to that factor.
It gives you more time to save if you delay claiming social security you will get a bigger benefit
when you do take it and you have few years in retirement to fill the gap.
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