If you’re thinking about retirement, it’s likely you’ve heard the advice to save 70% of your pre-retirement income. But will that be enough for you to enjoy a long, lasting retirement?
In today’s episode of Your Money Minute with Tracy Stewart, CPA, I want to discuss advice on how to save enough for retirement. You’ve probably heard that 70% of your pre-retirement income is a good standard, but for most people, this just isn’t enough to live comfortably.
The problem with the 70% pre-retirement standard is that it doesn’t account for much of the spending you may do in retirement. If you plan to travel or live a little larger than you do now, you’ll blow through the 70% pre-retirement income savings very, very quickly.
As mentioned before, retirement takes a lot of preparation. I recommend you work with a financial advisor to develop projections for your retirement needs. This will help you confidently and accurately plan for an appropriate amount to save — not an arbitrary 70% value that may or may not meet your needs. In fact, for many individuals, I find that a conservative amount is closer to 100% or 110% of their pre-retirement income for retirement savings.
I talk a lot about planning for retirement, and you can continue discovering more here:
- Developing a Healthy Perspective on Retirement Planning and Goals
- TIP: Breaking Big Retirement Goals into Smaller Pieces
- Is It Really that Important to Be Saving for Retirement Now?
Financial independence is unbelievably liberating. Having a strong plan for your future financial needs will give you the peace and confidence you’re ready for any adventure your tomorrows throw your way.
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