There have always been standards in the amount of money you will need to retire. Different people have various ways of figuring out how much you will need, depending on your present income and your expenditures. There are many factors to take into account. It will depend on your lifestyle just how much you will need to retire.
Factors to take into consideration:
- Your lifestyle. How much money do you currently spend each year? Do you travel a lot, attend high end events or participate in expensive sports? If these are things you’ll wish to continue with after retirement, you’ll have to budget for them. Maybe you live a simple lifestyle. One that revolves around family and friends, hobbies at home or in your community, a lifestyle that won’t be too costly. In this case you already know that your retirement won’t be as expensive as that of some others.
- Longevity. We are living longer than ever and if you come from a family of centenarians, you may need to provide for a longer retirement. Add to that the rate of inflation and your retirement may be a lot more costly than you originally thought.
- Debt. Do you have debts that may not be paid off by the time you retire? If so, you’ll have to add these to your monthly or yearly expenses. One of the most important things when planning for retirement is to try to get all of your debts paid off. Debt is a drain on your income, particularly when you include the interest.
- Income. Will you work after retirement? Many seniors intend to keep working, either out of necessity or because they want to keep busy. This is one way to ensure that as long as you are healthy, you will also have a way to pay for added expenses.