Is your retirement fully funded?

Is your retirement fully fundedThere are many complicated ways to calculate Is your retirement fully funded or not! It really comes down to what lifestyle do you want to live while you are retired and whether you have enough monthly income to lead the lifestyle that you want. This includes all of the usual expenses such as a home to live in, food, clothing, entertainment, and perhaps some amount of travel.

But most retiree’s eyes glaze over when you begin looking at the various cash flows that you will need in retirement. Let alone the amount of money that you will need to have saved to generate the income you need. They must also take into account any pension income that they might be entitled to. This will include government pensions in addition to drawing from their savings plans. They have to assume inflation rates and investment income rates. As well as many other expenses associated with trying to assess if they have sufficient income.

Is Your Retirement Fully Funded

The cash flow method may be the simplest in the near term for most people. How much income do you have now? What are your expenses and are you saving some money towards reducing debt as well as for retirement? This is a start and a way to get control of what you are spending and what you are actually saving.

How much income will you actually have at retirement? Take a look at the pension income from your company. When you will receive it, what options there are to consider such as early retirement? Next, do the same thing for government pensions and assess how much and when you will receive your pension.

What are your expenses discretionary and required expenses now, and after your retirement? Do you need to downsize? Do you need to reduce spending to get control of spending and match spending to income levels? Once you have this data consumers can quickly tell whether they will have shortfalls or not. They can tell how much they need to save to replace the income they may need in retirement.

Can you project your schedule of income and expenses a few years into the future during retirement? If you can also add inflation and anticipated increase in income to this picture you will then have a more accurate estimate of how well you will fare during retirement.

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