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Retirement – Its Sooner Than You Think!! (honestly)
By
Kate Hufstetler
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Many people hear
"retirement" and think— what? 401K? Roth vs.
Traditional IRA? Stocks, bonds, mutual funds? Do they?
Or do many people put money away according to the
suggested amount and then simply hope that when retirement
comes all will work out?
One report I read estimated that 66 million Americans have
put away a Whopping $0 towards retirement.
Many people are still thinking there might be a thing
called Social Security around when they retire. Social
Security: as of 2004, the average annual Social Security
retirement benefit is approximately $11,000. That is not a
lot to live on folks. Plus, we all hear the news
periodically that there might not be any Social Security
around when we get older and need it.
And as a further WAKE UP call, I found a calculator which
estimated (without Social Security):
* a couple at 40
* bringing in $90k a year (together)
* with very modest investments
would need to save an additional $2,690,000.00 ( yes 2
million +) in order to retire at 65-- OR – plan on
working an additional 29 years!!
Now before you get overwhelmed and click over to another
article—lets put our heads together and simply cover a
few very very basic start up basics.
1) Standard Of Living: You need to know at what standard
of living you will want to live during retirement.
2) Basic Living Expenses: You will need to calculate the
cost of basic living expenses (at that level) i.e.
electric bill now of $200 = what in 2030?
3) Hobbies and Leisure Activities: Know what type of
hobbies, and leisure activities you will keep busy with
and what their cost might be then.
4) Family Visiting / Travel: Realize that more and more
children move away when grown. So while they work out of
state—YOU may need to do the traveling to see them. Plan
for these costs.
5) Convalescent Care (nursing home costs) provincially run
about $100/day median. You will need to multiply that
times the same 4% inflation rate. Then multiply that times
the number of years before you may need it—to
approximate how much you may need to afford for your
housing when you need assistance. Truth be known—WE need
to plan to handle that cost ourselves, rather than think
our children will be able to take on that kind of
additional cost.
You will need to total yearly amounts. You will need the
approximate yearly cost to live (at your desired level)
during regular healthy retirement. And, you will need the
total yearly amount of costs to live in assisted or full
care living facilities ( for each – you and mate).
Multiply each yearly amount by the number of years you
might be living in that circumstance. Example: Retire at
65. Live healthy retirement- 15 years (so 15 x yearly cost
of healthy living) . Live assisted – 8 years ( so 8 x
yearly cost of living in care).
You now have two totals that when added together equal
your estimation of the total dollar amount you will need
to draw from in order to live after retiring. NOW you are
ready to begin planning your investments in such a way
that you can achieve that TOTAL number by the time you
retire.
Here are some tools to help you now that you are ready to
take that first step:
USA Today retirement cost calculator:
http://www.calcbuilder.com/cgi-bin/calcs/RET2.cgi/usatoday
Motley Fool’s retirement area
http://www.fool.com/retirement.htm?source=PFinAg
Metlife’s retirement area
http://www.metlife.com/Applications/Corporate/WPS/CDA/PageGenerator/0,1674,P1946,00.html
About.com’s HUGE retirement resource area:
http://www.retireplan.about.com/
Until next time—all the best,
Kate
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About
The Author
Kate
Hufstetler is a well established Personal
Life Coach. Her clients come from both the
United States and overseas. She offers
coaching services via email and phone
consultations. For more information and
current highlights please visit: http://www.comedreamwithme.com/start_today.html |
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