When it comes to retirement planning, most of us are consumed by figuring out “the number” – that elusive savings goal we aim to hit by age 65, or there about.
Figuring out how much to save for retirement can be confusing, to say the least. You’ve got to factor in your current income, your retirement lifestyle expectations, inflation, income growth, returns and possible Social Security checks. To complicate matters, different financial planners and accountants recommend different calculations to find “the number.
“Each calculation approach has its own pros and cons, and each will probably lead you to a different retirement goal. It’s up to you to decide which approach or combination of approaches works best for your needs so that you can calculate your own retirement plan.
Keep in mind that there are top-down and bottom-up approaches to retirement goals. The top-down approach attempts to determine how big your nest egg will need to be at retirement, such as 25 times your annual expenses. The bottom-up approach seeks to determine how much you’ll need to save each year to reach your goals, perhaps 15 percent of your salary.
コメント