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Picture Your Retirement Dreams
To find the right path, you need to know where you’re going. What do you want your retirement years to look like? Do you want to travel? Pursue that hobby you’ve never had time for? Spend time with the family? Move to the beach? Or to the mountains? We’re all different, and our personal retirement goals are just as different.
How much will you need to live your retirement dreams? Consider these factors:
As long as the Social Security system remains stable and funded, you can expect Social Security to provide about 38% of the income you’ll need in retirement.* In order to make up the difference, you’ll need to set aside money during your working years to grow your personal savings.
* Source: Social Security Administration, Social Security Bulletin: Annual Statistic Supplement, 2001
No doubt you’ve heard about penny candy and nickel sodas. Don’t you wish a soda cost a nickel now? That’s inflation working against you. Since 1984, inflation has averaged between 3 - 3.5% per year. If this trend continues, something that costs $100 today will cost $180 in 20 years. These rising prices mean that you will need more money in retirement if you want to maintain your current lifestyle.
Cost Today |
Cost in 20 Years |
Cost in 40 Years |
|
| Cup of Coffee | $3.00 |
$5.41 |
$9.79 |
| 18 Holes of Golf | $80 |
$144 |
$260 |
| Honda Accord | $18,000 |
$32,510 |
$58,717 |
Now that’s an expensive cup of coffee!
Healthy lifestyles and modern health advances allow people to live longer. As we live longer, we need our retirement savings to last longer. Make sure you don’t outlive your savings—be sure to set aside enough money during your working years to last throughout your retirement. If you don’t save enough, you may not be able to live your retirement dreams.
Most retirement planning experts believe that the average retiree will need 75-80% of their pre-retirement annual income during their retirement years. But are you average? Your expenses will change over time. Consider these factors:
You’ll need less than 100% of your annual pre-retirement income if:
- your mortgage is paid off
- you are not supporting dependents
- you have no work-related expenses
- you are no longer saving for retirement
You’ll need more than 100% of your annual pre-retirement income if:
- you plan to buy a second home
- you plan to spend more time traveling
- you require additional medical care
