How to Figure Out How Much Money You Need to Retire

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It doesn't matter if you've been at your job for two years or 20 years, you should always be concerned with making sure you have enough money in your savings account to retire when the time comes. However, we know that this certainly isn't as easy as it seems - there's a lot that goes into planning for the future.

One of the questions we bet you'll ask yourself as you start saving is "how much do I need." While we wish we could give you an exact number, the truth of the matter is that it is going to vary for every person depending on a number of factors. What we can give you, though, is what those factors are so that you can start planning accordingly - check them out below.

Your Cost of Living

This is especially important for those of you who plan to move to a new city or state after retiring - you'll need to understand exactly what your cost of living will be in a different place. For example, how much do homes typically cost or how much is rent? Even if you aren't moving, you'll also need to figure this out too - will your home be paid off by then? Will you still have a car payment? Having a good grasp on your monthly expenses is one of the best places to start.

Your Recreational Plans

Retirement gives you a ton of time to do the things you've always wanted to do, such as travel. However, these activities cost money too! That said, once you figure out your main expenses such as how much a home will cost, and a car, and basic things like utilities, you can then begin to think about all of the activities you want to pursue.

Your Projected Income

Aside from the income you'll have from savings accounts each month, you also need to take into consideration sources of income such as pensions and Social Security. When you know how much you can expect from sources like these, you can then figure out how much of your monthly expenses that will cover - whatever it doesn't cover should give you an idea of how much you'll need to take from savings accounts.

As we said earlier, there truly is no one answer for how much money you need to have saved by the time you're ready to retire. However, if you can approximate your expenses and estimate your projected income, you're halfway there! 

At American Investment Planners LLC, we understand how crucial it is for people to feel comfortable financially during retirement, which is why we want to help you with your retirement planning strategy. 

To learn how we can work with you on your portfolio and savings accounts such as a 401(k), please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com today.