Do you have enough money to retire? This is a question baby boomers are starting to think about. How much money do you need before you retire? What is the best way to plan for retirement?
When Should You Start Saving?
Experts agree that you should start saving for your retirement as early as possible. The longer you defer putting aside money in a 401(K), IRA or through a pension plan the less likely that you’ll have sufficient funds to last during the term of your retirement.
Medicare and Medical Expenses
Medicare will not be sufficient to cover your medical expenses during retirement. A study by Fidelity Investments found a 65 year old couple retiring in 2012 would need to spend $240,000 to cover their medical expenses during the time of their retirement. If you retire at 65, you will need to set aside a quarter million dollars just for medical expenses!
Maintaining Your Standard of Living In Retirement
Baby boomers facing retirement often receive mailings from retirement communities showing retirees living the good life. The question is, how much does the good life cost? Will it be cheaper to live the good life in your senior years than you’re living expenses were when you were working? Studies show you will need approximately 75 to 80% of the income you had a while you were working to maintain your lifestyle in retirement. When you are retired you will have more time available to go on vacations and you may find that the good life is not inexpensive.
Should You Wait To Retire?
Now that Americans are living longer, should they consider 65 a reasonable retirement age or should they wait until their 70 or older to retire? Many Americans working for large corporations are deprived of the choice of working through their sixties into their seventies. Large corporations tend to push older employees out by offering them incentives and other packages. Should you lose your job when you are 55 or 60 years of age, you will find many employers are reluctant to hire older Americans.
Be careful when you retire. You don’t want to outlive your money!
About the Author
Elliot S. Schlissel is a member of the National Academy of Elder Law Attorneys. He assists seniors with regard to wills, litigation, Medicaid issues and estate litigation.