What should my long-term financial goals be?
The first step is to figure out a realistic financial goal for yourself and your family. Talk with your loved ones to ensure that everyone has the same goals in mind. Clearly not all families will have the same end goal – figure out what is important to you, whether it is early retirement, financial comfort, children’s education, travel, taking care of elders, or your children.
Are there simple guidelines to follow towards a comfortable retirement?
Someone starting their savings in their early 20s can save 10% of their income and have a sufficient nest egg, while someone starting in their 40s may have to bump that number up more towards 20%. This is all dependent on the time of your life that you choose to start, the size of your current nest egg, and the amount of money that you will need to retire comfortably.
It is always a good idea to contribute as much as possible to retirement plans, to take advantage of tax deferral and employer matches.
Generally people need around 80% of their pre-retirement income after they have retired for the first few years and then learn how to live on less. This will greatly depend on the expenses that you plan on having:
- Is the mortgage already paid off?
- Do you have car payments?
- Are you sending your children through school?
Another strategy worth following is to always have an emergency fund of at least 6 months of expenses. Considering your situation and the situations of the people that you depend on or depend on you, you can adjust the number of months accordingly, but 6 is a good ballpark number. This will also depend on how many bills you need to pay.
Try using Kiplinger’s Retirement Calculator to estimate your retirement needs. You will need to have some information handy like your estimated Social Security payment, any expected income from pensions and any retirement savings to date. While you will have to make some assumptions, it will give you a pretty good estimate of how much you’ll need to save.
Need help planning your retirement?
Schedule a Consultation with us at 919-781-1721.