#3 Need to Know Retirement Questions to Answer
When should I start saving for retirement?
It's never too early to start saving, but having a strategy to grow what you save is key.
How much should I save per month/year?
Save what you can and make a plan! It's better to save $50/month than waiting 5 years to start saving $200/month. Compounding interest can turn small money into big accounts over the course of time and the sooner you start the bigger your account will be.
What amount should I have when I retire?
This is very subjective. To get a better idea, think of the lifestyle you want to live. Use today's dollars and an inflation calculator to give you a rough idea of the cost of living years into the future. Keep in mind that $500,000 in today may only be equivalent to a fraction of the buying power 20-30 years from now. So you'll need to plan to save much more than what comes to mind.
There is no cookie cutter answer when planning for retirement because everyone's answer is uniquely dependent on their own life, lifestyle, and circumstance. The best advice is to encourage you to take some time to figure out to the best of your ability what your needs will be what will work best for you.
What you need to know about your life to plan for retirement:
How much will you need (or spend) per year? This includes monthly bills like mortgage (if you'll have one), utilities and food expenses, along with travel, and vacation. Also think about health insurance, life insurance and other investments that you pay monthly or annually.
This will vary based on inflation and personal lifestyle. To get a rough estimate you can use this calculator to get a better idea of the increase that will occur due to inflation.
How much retirement income will you have (social security, pension, annuity, retirement account, etc.) per month?
This is the number we can help you work on. Having a good wealth strategy in place can help you reach the goals you set for retirement income.
Will you have any other sources of income? Property rentals, dividends, part-time job, etc.?
Many retirees have multiple income streams to help with living expenses. It's common for property rental income and part-time jobs to supplement retirement income. Alternative investments and other non-conventional sources of income can also be a good way to invest at this stage in life.
At what age do you plan to retire and how long do you expect to live?
Early or late retirement will have a big impact on planning savings/investment requirements. As life expediencies continue to grow as advances in healthcare and medicine progress, considerations for longevity are more important for today's working class than ever before. Not only will you have to plan for income to live out your years but also with the knowledge that you may need long term care or costly medical treatment down the line.
You likely don't know the exact answers to these questions now but if you start thinking about these things you can estimate some numbers that will give you a big leg up on how much you will need to save and invest now.
Did you know that social security is the backbone of most American’s retirement savings? That’s a scary reality.
It's really important to consider having multiple sources of income available to you many years from now, including money in your work and personal retirement accounts, pensions, annuities, proceeds from selling a house, etc.
Any method of saving for retirement takes discipline. Whatever you spare and contribute today will impact your future. Let us help you discover a better way using Off Grid Banking. Your future self will thank you for starting today. And you’ll thank us for helping you find a retirement strategy that offers you—growth, stability, access, long-term comfort, and a legacy for your family.