There are several options available to make sure that you’re on the right track of investing for your golden years. While all these preparations are necessary, there is one crucial question that almost everyone fails to answer until it’s already too late: how much does one need to save for a financially secure retirement?
The answer will depend on the following factors that determine the amount that you need for retirement. For instance, where you plan to spend your golden years is a huge determinant of whether or not your savings will last for years.
A million dollars is usually the estimate for a comfortable retirement plan, but recent findings suggest that it’s not the safest number. This is because the buying power of your $1 million will vary depending on which state or country you decide to settle in.
In sunny Hawaii, for instance, you can live comfortably for almost 12 years with your million-dollar retirement fund. If you’re in Mississippi, you will be able to live through your golden years worry free for 26 years.
Other factors that determine how much one needs for retirement are related to their future lifestyle choices as well as spending habits. According to experts, it’s not really about how much you earn; it’s more about how much you spend. Start by evaluating your yearly expenses at present, and multiply that by the ideal number of retirement years and you’ll have an idea of how much you’ll need.
The last factor is about looking at the guaranteed income sources after retirement. While knowing that you can rely on these regular and consistent financial sources can be comforting, make sure that you’re not totally depending on them throughout your retirement years.