How Much Money
Do You Need to Retire?
Protecting Your Retirement
How Much Money Do You Need to Retire?
It’s an important question. Healthcare costs are rising, as are everyday living expenses. Even basic food and housing costs are increasing every year. How do you know that you’ll have enough in the future? Although there are many, many factors to working our your retirement strategy, there is hope. We can help.
We can help you determine how much money you need to retire using a number of methods. First, we can calculate a basic inflation rate.
Most professionals agree that costs increase by around 2% per year. So, take your typical yearly expenses, and add a compounding 2% each year. For example, let’s say the amount of money you need per year is $40,000. At a 2% inflation rate, you’ll actually need $40,800 next year to maintain your same lifestyle. then, after 5 years, you’d need around $44,000. In ten years, $49,000, and so on. We can help you determine if you have enough income saved. Inflation is a major factor in answering this.
Expenses are another crucial aspect to developing your retirement strategy. You should create a budget to help determine how much money you need to retire. Lay out how much you intend to spend in retirement. First, on essentials like housing and food each month. Next, on “extras” like dining out, gift-giving, traveling, etc. Lastly, your budget should have a “just in case” section. Money put aside in the event of unexpected costs. And, if you don’t end up using this money, you can set it aside, adding to your savings each month. A little wiggle room can go a long way in ensuring you have enough money to retire.
Is Your Money Protected?
It seems as though many stable retirement options are vanishing. Options like CDs and traditional savings hardly seem sufficient. For example, company-offered pensions are practically nonexistent today. Even government workers are finding that they have to contribute more to their retirement plans than before. Additionally, riskier options like the stock market or mutual funds are far from ideal. If the stock market crashes, you could lose much of your savings. Many people, unfortunately, experienced this firsthand in the stock market drops of 2008 and 2020. Some people found themselves with far less money than they originally had saved. Even when the market recovered, the accounts of many retirees didn’t. You don’t want to lose the money you’ve worked for years to save.
It’s crucial that you find ways to protect your principal and earn reasonable rates of return** in retirement. We can help you learn more about how to do this. Furthermore, you should know the answer to the question “How much money do you need to retire?”
Looking for more information?
Contact us to schedule a one-on-one, no-cost, no-obligation meeting, or attend one of our informational seminar events. Learn about your options, and secure your future.
Choose Sonoma Financial
Have questions? Our team can help. We provide one-on-one meetings at no obligation to you. We also offer informational seminars and insurance presentations with a gourmet meal. Register or call us to explore your options and protect your future in retirement.