What you do with your money now, and how you plan for later, affect how comfortably you’ll live in retirement.
There are steps you can take to identify if you’re headed on the right track, and adjust if necessary.
Start by identifying how much you need, stick to your plan, and know that preparing for retirement is a marathon — not a sprint.
The fear of running out of money after you retire is common among both workers and retirees. How do you know if you’ll be able to do all the things you want to do and still have plenty left over for your kids to inherit?
If most or all of the following statements apply to you, then you’re on track to have ample funds when you retire.
1. You know your ‘retirement number’
When you’re decades from retirement, it’s hard to figure out just how much money you’ll need to get by as a retiree. There’s a lot that can happen between now and then, which is why experts have come up with a number of ways to calculate how much you’ll need.
Saving 10 times your current income, or saving enough so that you can replace 80% of your current annual income, or simply saving 15% of your income each year are all common methods of finding your retirement savings target. Whether you’re using one of these “close enough” approaches or you’ve spent some quality time with a retirement calculator to get a more customized result, you’ve figured out — realistically — how much you need to save by retirement age.