Although one of the most common retirement planning questions is how much money will I need for a successful retirement, it may be more important to focus on how much income you’ll need during your retirement years. Turning your savings into retirement income involves complex and comprehensive planning as well as preparing for a number of unknown variables.
One of, it not the biggest retirement planning question people ask is, “How much money will I need to retire?” Traditional thinking is to try and answer that question with a specific dollar amount, but that might be missing the most important question that needs to be addressed. And, figuring out how much income you will need in retirement may be the first step.
Calculating how much income you’ll need in retirement can also provide some of the answers needed to address the amount of money needed to fund a successful retirement. To get started, think about the different areas of your life that will need to be funded during retirement. It might be easier to address these items if you segment them into separate buckets like essential living expenses, health care, entertainment, and unplanned emergency situations. Having expenses segmented into buckets will make it easier to identify the income sources needed to fund them.
The most secure income streams should be used to fund the highest priority items. You may feel more in control of your retirement planning by focusing on the income needed to cover your anticipated expense buckets.
Remember, don’t get hung up on a number. Instead, focus on the income you’ll need to fund the most important parts of your retirement. CLICK HERE to schedule your complimentary, no obligation financial review and we’ll discuss some of the most important items you’ll need to fund for your life in retirement.