Ivanhoe Newswire -- According to a recent Gallup poll, the average retirement age in the United States is 61. Enjoying your retirement hinges on whether you’ve saved enough money to live comfortably.
“When people are going into retirement there are more and more things that they’re uncertain about. They’re uncertain about their health, uncertain about their income, are they going to run out of money?” said Celine Pastore, a financial advisor and founder of Women’s Wealth Advisor.
One in three Americans has $5,000 or less saved up for retirement. Figure out how much money you'll need and don’t forget healthcare issues. The latest projection is that healthcare expenses after 65 will be $10,000 per year per person.
“Understand Medicaid planning. More and more people are ending up in nursing homes today,” Pastore continued.
Plan to spend about 80 percent of your pre-retirement income to enjoy the same quality of life. Calculate how much you’ll need in savings by subtracting your social security and any pensions from your retirement needs.
So, if you need $75,000 a year and expect $40,000 from social security benefits and pensions, that means you’ll need to take out $35,000 a year in savings to pay just your living expenses.
If you’re wondering how to start, save 15 percent of your income every month to add to a 401k or start your own IRA.
Don’t forget about inflation when calculating how much retirement money you’ll need. Your dollar today will not have the same value in the future. While there’s no perfect way to predict future rates, inflation has historically averaged about three percent a year.