FINANCIAL FOCUS: Saving for Retirement: Are You Guessing or Planning?
Let’s say you dream of spending your retirement mornings on a warm beach, coffee in hand, waves rolling in. To get there, you had a simple plan: save $1 million and buy the beach house you always wanted.
But when retirement arrives, reality hits. After accounting for keeping your current home, everyday expenses and health care, $1 million doesn’t stretch as far as you thought, and the beach house remains a dream. The problem wasn’t your discipline – it was that your number was never really your number. It was arbitrary, not anchored to what your ideal retirement would actually cost.
How can you make sure your retirement number is right for you?
A solid savings goal starts with a clear picture of the retirement you want. Think through where you plan to live, whether you’ll keep your current home or downsize, how much you plan to travel, if you’ll help children and grandchildren financially and what health care might cost you later in life. Build a realistic monthly budget, then multiply by 12 months to find your annual need. Adjust this amount for inflation until the first year of retirement.
