How Much Money Do You Need In Retirement

Whether you are ten years, five years or just 1 year from retirement, you need to have a way of estimating how much money you are going to need to retire.  Financial experts say we will have to replace about 70 to 80 even 90 percent of our annual salary in retirement in order to maintain the lifestyle we have become accustomed to.   Decisions – decisions. 

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Let’s examine Four Steps that will help to estimate how much money you will need to retire comfortably.  This is where tracking our weekly, monthly and yearly spending comes in.  We need to always know what is coming in, what is going out and how much we can afford to spend.  Planning for our comfort and security in retirement requires grit, tenacity and sheer will power to make a plan and follow it.

How Much Money You Will Need In Retirement:

1. Estimate your retirement expenses, including taxes and even one-time major purchases. Make a list and revisit it often. These are not items you think about in your head, they need to be put on paper and then they become real.

If you need help determining how much you need seek out the help of a qualified Federal Retirement Expert.

2. Determine how much retirement income will come from your known resources. Compare income from TSP and other savings and your Federal Annuity with estimated retirement expenses.​

You could also be eligible for Social Security of a Military Pension.

3. Compute the gap between how much money you need to retire and the amount you will receive from your known resources. Evaluate the gap and measure its size with financial and economic scrutiny.
4. When doing a retirement analysis and assessment, factor in inflation and life expectancy.  Look at your assessment from both ends of the spectrum – the best scenario and the worst.

Formula for Estimating Your Federal Retirement Income:

The majority of Americans will rely basically on two sources of consistent retirement income – Social Security and Employee Pensions.  The other component should be savings and investments (Thrift Savings Plan (TSP) and outside investments like IRAs).  Let’s be practical, we don’t all have that category separate and apart from vehicles provided through employment.  However, it is never too late if you put your plan in place and stick to it.

P. S.  Always Remember to Share What You Know.

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