6 steps to figuring out your retirement number
Do you have enough set aside to retire? How much will you need to live on when you stop working? Brett Arends of the Wall Street Journal tackles the often depressing topic of how to figure out what you’ll need in retirement.
He tries to keep it simple by highlighting 6 steps:
- Figure out how much income you’ll need.
- Figure out much you will get from outside sources.
- Figure out how much income you will need from your investments.
- Understand how long your investments will have to last.
- And here’s your answer.
- And how to stop panicking.
I’m not so sure he succeeded with the last category, step 6–don’t panic. These aren’t exactly reassuing words.
For those facing a retirement-savings crisis, the strategies for adapting are well known but worth reviewing. They include scaling back, moving somewhere much cheaper and delaying retirement as long as possible, which works multiple levers. It gives you longer to save, it gives your savings longer to grow, it reduces the length of time you will need to live off your savings, and it boosts your Social Security income. Even staying in part-time work can help.
There are no easy answers. But the real problem is that most people still don’t even understand the questions.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
Donate now to get almost any thank-you gift.