A rule of thumb is that you need about 70% of annual pre-retirement income to have a comfortable life. That is enough if you’ve already paid off your mortgage and if you’re exceptionally healthy when you retire.
However, if you are planning to build your dream house or travel to as much country as you can, you may need 100% of your income or maybe even more. Also, note that your medical expenses may increase as you retire, especially when you retire before qualifying for Medicare.
2. Plan how you’ll pay for retirement expenses.
Your retirement income has three primary sources: pension and annuities, Social Security, and your savings. First, you need to determine your estimated benefits from your Social Security. If they haven’t sent you this information yet, you can order online or use an online calculator that calculates your benefits according to your expected income.
3. Add annual payouts that you expect to receive from your pension or annuity.
It’s always a good idea to think about the extra money that we might receive in retirement. For each dollar of a shortfall, you will need at least $15-$20 in investment savings. If your estimated retirement expenses exceed your Social Security pension by $10,000 a year, you may need a $150,000 to $200,000 nest egg to bridge the gap.
Having a financial plan for the future is vital. Not only will it give you security, but it will also make you feel fulfilled as you reap the benefits of your investments. Here at B.A. Jones Insurance Agency, we help our clients secure their financial future with our wealth building and smart tax strategies. We have financial products that you can invest in for retirement. For your retirement planning needs, feel free to call us at (216) 261-0596 or click here to email us. Get a quote now!