Many people hear "retirement" and think— what? 401K? Roth vs. Traditional IRA? Stocks, bonds, mutual funds? Do they? Or do many people put money away according to
suggested amount and then simply hope that when retirement comes all will work out?
One report I read estimated that 66 million Americans have put away a Whopping $0 towards retirement.
Many people are still thinking there might be a thing called Social Security around when they retire. Social Security: as of 2004, average annual Social Security retirement benefit is approximately $11,000. That is not a lot to live on folks. Plus, we all hear news periodically that there might not be any Social Security around when we get older and need it.
And as a further WAKE UP call, I found a calculator which estimated (without Social Security): * a couple at 40 * bringing in $90k a year (together) * with very modest investments would need to save an additional $2,690,000.00 ( yes 2 million +) in order to retire at 65-- OR – plan on working an additional 29 years!!
Now before you get overwhelmed and click over to another article—lets put our heads together and simply cover a few very very basic start up basics.
1) Standard Of Living: You need to know at what standard of living you will want to live during retirement. 2) Basic Living Expenses: You will need to calculate cost of basic living expenses (at that level) i.e. electric bill now of $200 = what in 2030? 3) Hobbies and Leisure Activities: Know what type of hobbies, and leisure activities you will keep busy with and what their cost might be then. 4) Family Visiting / Travel: Realize that more and more children move away when grown. So while they work out of state—YOU may need to do traveling to see them. Plan for these costs. 5) Convalescent Care (nursing home costs) provincially run about $100/day median. You will need to multiply that times same 4% inflation rate. Then multiply that times number of years before you may need it—to approximate how much you may need to afford for your housing when you need assistance. Truth be known—WE need to plan to handle that cost ourselves, rather than think our children will be able to take on that kind of additional cost.
