A happy retirement starts with a realistic retirement plan. However, this is not always easy to do. There are a number of variables, including life expectancy, inflation and social security, that make it difficult to determine exactly how much you need to retire. While the cost of living tends to decline in retirement, they may not drop as much as you think.
Two out of five retirees spend more than they expected on average, 32% less than non-retirees, according to a survey recently conducted by the Global Atlantic Financial Group. For some, correcting this means merely reducing discretionary costs such as traveling or going out. For others, however, a real crisis can occur if their savings are used up prematurely. Below you will find the key findings from this study and some guidance on how to create a realistic retirement plan that will last until the end of your day.
The main regrets of retirees
The Global Atlantic survey highlighted the three main regrets felt by pensioners: not saving enough, relying too heavily on social security and not paying their debts before retiring. It goes without saying that if you do not save enough, you will have to retire. You may have to give up some of your dreams. Travel around the world, for example, or work part-time to make ends meet.
While it is true that retirement social insurance offers some income, it is important that you have realistic expectations of how much of it is covered. The average Social Security check is around $ 1
These two factors can significantly impact your retirement savings, which only worsens as you retire. When it comes to high-yield debt such as credit card debt, it could potentially get out of hand and force you to exhaust your retirement assets faster than you expected. If it is a home loan and you defaulted for some reason, you could lose the roof over your head. Therefore, it is important that you do your utmost to settle your debts before you retire.
How to Create a Realistic Pension Plan
If you create a realistic retirement plan and reassess it regularly, you can avoid this remorse and avoid keeping you up to date for your goals. The first step is to estimate the length of your retirement. The average life expectancy in the United States is 78.6 years, but may be longer or shorter. Subtract your planned retirement age from your estimated life expectancy to see how long your money will last.
Then calculate your annual retirement cost of living, bearing in mind that some costs, such as caring for children, may decrease or decrease, while other costs, such as health care, may increase. Count your monthly living expenses and multiply them by 12. This is your annual cost of living, but you can not simply multiply that number by the number of retirement years. You also have to consider inflation. A good estimate is around 3% per year. If you have difficulty doing this math alone, you can use a pension calculator to do the hard work for you.
After all, you have to deduct what you get from Social Security to find out how you have to save a lot yourself. You can estimate your social security benefit by creating an account for my Social Security. This will tell you how much you can expect based on your current work results if you apply for 62, your full retirement age (66 or 67) or 70 years of social insurance. You are entitled to 100% of your timetable Although you can benefit at full retirement age, you can apply for social security benefits at the age of 62 for reduced benefits per check or postpone social security until the age of 70 to raise your checks Am Work best while saving for retirement. Think about how much money you have left after paying your monthly living expenses, and devote a portion of your pension savings to the pension plan you've devised, and the remainder to your debt. You may want to look for ways to increase your income, such as: Additional work hours or a part-time job if you have difficulty repaying your debt while saving on retirement.
A detailed retirement plan is if you want to avoid running out of money in the last few years. If you follow the steps and avoid the mistakes described above, you can make your retirement preparations as stress-free as possible.