How Much Money Do I Need for Retirement?
Every pay period, you try to stow a little money into a savings account, but will that money be enough to support your retirement? Often, the answer depends on a variety of lifestyle factors. The guide below will help you figure out a reasonable estimate of what is needed for your golden years so you can take steps toward that goal.
Determine Your Current Cost of Living
Unless you imagine a lavish lifestyle upon retirement, you’ll probably have a similar cost of living as you do now. Make a budget of what you spend every month. You’ll need approximately 70% to 100% of this amount for the first ten years of retirement. Additional savings are also recommended to cover health care costs and expenses related to long-term care.
Set Saving Bench Marks Along the Way
Even if you’re getting a later start, monthly and yearly benchmarks will help you keep track of your savings, and also alert you if you’re not saving enough to meet your end goal. As an example, a 40-year-old man will need to save at least $500 a month if he hopes to have $196,154.83 in his savings account by age 65. This figure is assuming an annual interest rate of 1%, but interest rates for savings accounts or certificates of deposit can vary.
How to Boost Your Savings
If you’re not projected to have a sufficient amount of money by retirement age, there are other methods you can use to boost savings. Consider extending how many years you work slightly so you have more time to save. Downsize in anticipation of your retirement years, such as by selling your home and moving into a more affordable residence.
Being selective about the savings account you open can also help prepare for retirement. That’s why Spirit of America Federal Credit Union in Lincoln, NE, provides passbook savings accounts that offer dividends on how much you save. Dividends are compounded and paid on a monthly basis, and you only need a $25 deposit to open an account. Learn more about this NCUA-insured credit union by calling (402) 467-1102. See more loan and savings products online.
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