Retirement Income Planning Guidelines for a Stronger Nest Egg
To ensure that you will have enough money to live comfortably during your golden years, your retirement income planning strategy has to incorporate finding how much you will spend at that time. Sadly, many near-retirees and people who are already retired have not been able to save enough cash at various points in their lives prior to retiring, or have tried to determine the approximate amount they will need to live on. Numerous studies back this up after finding that millions of American retirees will have to postpone retirement and keep working full-time or part-time until they pass on.
A recent survey by Nyhart, an actuarial firm specializing in employee benefits, identified that more than 80% of workers will be unable to retire at sixty-five. The survey also found that the average respondent would have to work up to the age of 73, while workers between the ages of 60 and 64 may have to work until 75 because of the lack of funds in their retirement accounts. The recent recession had only served to set these individuals further behind when it came to their contributions, as they also made inadequate contributions in the past.
Experts also state that many cash-strapped employees fearful for their retirement funds needed only to contribute enough money to their 401Ks, and not have to go as far as choose the investment options for their money to be able to bridge the gap between their required nest egg and overall expenses, says senior researcher Thomas Totten who headed the said study.
Denver investment advisor Charles Farrell says that the proper knowledge about a couple of basic financial matters, which are manageable debt and how much the individual has in savings, should help keep people afloat in retirement. Farrell says that, as a guideline, people who do not make more than $200,000 per year will need a minimum of 70-80% of what they earn before retirement to be able to afford their standard of living in retirement. This figure takes into account the higher costs of healthcare and lower everyday expenses as these people no longer have to pay taxes for Social Security or commute to and from work.
Farrell says that erring on the side of caution is best when identifying how much you need to save for retirement. His main retirement income planning tip pegs that workers should have at least 10-12 times their yearly income to avoid running out of cash in retirement, which can be used as a springboard when determining how much money you should have with the advice of a professional advisor.
About the Author:
Katherine Smith is an author who specializes in financial topics concerning seniors. Puritan Financial Group gives seniors reliable investment options, as well as professional financial advice to help them strengthen their retirement income planning strategy. For more information on how Puritan Financial Group can help you, visit our website at http://www.puritanlife.com
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