Let me ask you a question.
Do you know how much you’ll need at retirement?
If your answer is no, you’re part of a large group of Americans who are asking that exact same question.
In fact, there are actually three questions that we find most Americans
are struggling to answer about retirement.
The first one is: what is my retirement number?
That refers to how much capital you’re really gonna need to have accumulated in order to maintain a stable and consistent income for your entire life.
Your entire life could be 20 years, it could be longer.
Another side issue is how do I pay for long-term care if I become disabled?And how does my spouse function if they’re on their own?
The second question that most people can’t answer is a bit more daunting.
How much more do I need to save to reach retirement?
Unfortunately, this is a very complex calculation that includes whatever you’ve already saved, say in your IRA, your 401K, or maybe a non-qualified plan.
And then depending upon your age, how much more do you have
to save on a monthly basis in order to be able to reach your savings goal?
This amount can be significant.
The third question is one that almost no one can answer.
But it’s a question that Americans have to deal with and they have to deal
with it with confidence.
Do you have an investment strategy that has the highest
probability of getting you to your goal?
You can know your goal and you can know how much you need to save, but without a good investment strategy that has a high probability of success, you’re likely not to reach your goal.
How much capital do you really need?
Let me share with you a good rule of thumb. If your retirement age is 70, use 20 times your salary objective as a place to start.
If you want an additional say $30,000 a year over and above Social Security, you would need $600,000 then in assets to make it to age 90.
If you’ve already got say $50,000 in your retirement account and you’re 50 years old, using the rule of 72 with 7%, your 50,000 could be worth 200,000.
Subtract that from 600,000 and you’re 400,000 short.
In order to reach your objective you would need to save around $770 a month.
If you’ve never saved a lot during your working years, you might find this to be very difficult.
In fact, some may find it to be impossible.
There’s two ways really to create income when you can no longer work.
One is to have money at work, that $600,000 that I mentioned.
Or you can create a retention income from a flow of services that you’ve put in place that people will continue to pay you for.
If this is possible, it’s easier to create an income flow than it is to build capital.
In any case, you need to find a second income and worst case, you might have to reduce your overall income objective.
There are no easy answers to this, and for most retirement just isn’t easy.
It can be very painful on multiple levels…
boredom, health, financial stress, family crisis just to name a few of the pain points that we find when we work with clients.
You might need someone who can coach you along the way and help you to figure out the best options that you have available.
My wife tells me that she thinks most people become paralyzed by their circumstances.
They become option-deprived, so this is what we do at the Wealth Teams Alliance.
We help people discover their options, maybe options that they’ve
never thought of before.
And our job is then to help you determine your number, figure out the best way to reach your number, and to find an investment strategy that fits your risk tolerance.
This is so that you have the highest probability of achieving your number.
If you have any interest in knowing more about our services or how to plan for retirement, please contact us at the Wealth Teams Alliance.
You can also find a retirement calculator at www.simplretirement.info and if you’re interested in other videos in our preparing for retirement series, you can click here.