When you're getting closer to your retirement years, the financial decisions you make now are vitally important. Everyone has a picture of their ideal retirement, and everyone hopes to achieve their retirement dreams. To help ensure you're on the right track for the relaxing retirement you deserve, here are some key conversations to have now:
How much will I need?
Some retirement planning experts recommend saving for a retirement income that's about 70-90% of your current gross monthly income. But the truth is that there's no cut-and-dried formula. It's sometimes better to take a personalized approach based on the way you plan to live your life in retirement.
Factors like your desired retirement lifestyle play a significant role in how much you need to save for retirement. You should also factor in inflation, healthcare and medical expenses, and insurance needs.
online retirement calculator can help you understand how much you'll need to save for the life you want to live in retirement.
How long do I need my retirement savings to last?
One common worry people have when planning for retirement is that they will outlive their money. While there's no surefire way to calculate how long your retirement savings need to last over the course of your retirement, it's best to develop a couple of scenarios, shorter and longer, to come up with a range. Based on today's average lifespans, many experts advise saving enough retirement money to last you at least 30 years.
What if I don't have enough?
After adding up your retirement savings, pensions and social security, you may find that you don't have quite enough saved. Don't worry—there's still time to save for a happy retirement, and the best time to start is now.
Here are a few ideas to help you make the most of your retirement savings:
- Maximize your contributions to IRAs and 401(k) accounts. Shoot for the maximum allowable and take advantage of “catch up" contributions.
- Start a “side hustle" to bring more income in the door. Take the opportunity to turn a hobby or passion into a source of extra money.
- Create automatic savings through payroll deductions that go straight into your account. This will help you resist the temptation to spend the money you intended to save.
What will my medical expenses be?
Healthcare can be one of the biggest expenses in retirement. While Medicare can pay for some healthcare spending in retirement, you should also expect some out-of-pocket costs. As you prepare for retirement, be sure to assess your insurance needs, including life, disability, and long-term care coverage.
Purchasing long-term care insurance can help fill gaps in Medicare coverage and offer more peace of mind to you and your family as you get older.
These are just a few of the critical decisions you will need to make on your way to achieving your dream retirement. Luckily, you don’t have to navigate these decisions alone. Retirement planning professionals can help you create a plan that works best for you!
The CFS* financial advisors on Wright-Patt Credit Union’s Retirement Solutions team, offered through CFS*, will sit down one-on-one with you to understand your retirement goals and create a plan to reach them.
Schedule a complimentary, no-obligation meeting to learn more and get started today.