How Much Do You Really Need for Retirement? | Cleveland Bradley County Teachers Federal Credit

Is retirement a far-off dream world for you, or is it getting closer and closer to being your reality? Either way, it is fair to say most of us spend a decent amount of time thinking about our future and how much we have saved to live off of when our working days are done.

While saving early and often is the best way to build a comfortable retirement, there really isn’t a wrong way to prepare for your future. Whether you are just starting out in your career or you only have a little time left, you can create savings to live the life you want.

So how much do you really need to retire? Let’s take a look at all the factors that play into finding an answer for that question.

Plan Ahead

There is an endless supply of advice for how and when to retire. With the enormous number of resources that are out there, sifting through the information can quickly become overwhelming.

Instead of spending hours scrolling through advice, ask yourself a few simple questions:

1. What are your retirement goals? Do you want to travel the world, or are you hoping to move to a small home near your family and spend your time there? Dreaming about your future and setting some attainable goals will help guide you in understanding how much you need to save.

2. What are your current assets? Do you already own your home outright? Do you have reliable cars that won’t need replacing for a number of years? How can you downsize to lower your monthly expenses?

3. How long will retirement be? Take into consideration your health, and think about how long past generations in your family have lived. Don’t just think about lifespan, though; if you have no required retirement age and plan to continue working until you physically can’t, that will change your financial needs.

These are pretty simplified ways to figure out how much money you need to retire, but they are important questions to ask yourself. When you clearly know your desires for your future, your current financial status and the factors you can’t really do anything about, like your health, you will be able to more clearly lay out exactly what you need for retirement.

Financial Factors

Answering these questions is crucial for building the future you want, but no amount of dreaming will negate the fact that you still have to look at your finances. You need to know what your bank accounts are going to look like when there isn’t a regular source of funds flowing into them anymore.

A good rule of thumb for creating a secure future is to factor your need at 80% of your current household income. Most people in retirement report needing less total funds than they did when they were younger. Get to know what your current budget looks like, and work toward creating a savings that will cover the majority of it.

In general, the more you can stay on top of budget and continually find ways to save, the better off you will be. Your future is yours, and it doesn’t have to match the standards of anyone else. Save as much as you can as often as you can and live the life you want.

Ready to dream big about your future and create the finances to support it? Contact us to get started.