Vast amounts of ink have been used to discuss retirement savings and helping people understand how much money they’ll need for retirement.
There’s just one problem – most of these miss one vital component of an individual’s retirement – what they plan on doing. After all, it takes considerably more to travel the world first class than it does to live a fairly sedate retirement in Ketchum, Idaho.
And that’s what we’re talking about today. Until you understand how the type of schedule you plan to have in retirement, it’s difficult for anyone to say how much money will be enough. There are loads of variables, too – for example, will you own your residence free and clear? How often would you like a new car and what would your budget be for it? For that matter, will you pay cash for the car or finance it?
Obviously, too, younger retirees have the stamina to do things many folks in their late seventies or eighties simply don’t have and that – eventually at least – will have an impact on your expenses annually. In the end, while one solid rule of thumb for retirement is that expense will be highest when you are youngest, eventually, medical expenses – including nursing homes – needs to be considered as well. The last thing you want to do is run out of money, so start getting clear on what retirement means to you and your family.