When we retire, we really don’t want to work. So, what do we need to know in order to prepare for that blissful day? There are many factors that go into determining your retirement savings:
- Your age: Now, when you retire, and when you expire (how long will you live during retirement?). The earlier you start and the later you retire will produce the best result here.
- Your income: Now, and how much you’ll want during retirement. Of course, the higher it is now and the lower it is during retirement will produce the best result.
- How much you have saved for retirement already. The more the better.
- How much will your current salary grow between now and retirement? The higher the better.
- What return will you get on your investments? The higher the better.
You want to take the amount you have saved already, add to it annually and watch it grow until the day you retire. Then, that “pool” of money will continue to grow during your retirement, albeit more slowly since you will also now be withdrawing funds for your retirement.
A handy calculator that covers these (and some other) factors can be found in Yahoo! Personal Finance at: – this can be either an exciting or depressing exercise, depending on the assumptions you make.
As always, this is rough planning. If you feel like you need more detail, seek the help of a professional.
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