How long will I live?
When it comes to retirement plans, there is always one big question. How long will I live? Because we can’t know exactly how long we will live or how healthy we will be this makes the retirement planning tricky. So how do you plan for something that could happen tomorrow, or in twenty years? Well, it’s possible, there are quite a few ways of doing this. You could estimate that you’ll live to 100, you could take the median age of your parents, their parents and see what the median age of their death is and then plan for that. It’s also possible to go through genetic testing to determine your risk for developing Alzheimer’s disease or another type of illness or disease.
How should I save for retirement?
In a previous article I wrote, “Investing can be complicated, however, it’s a very necessary step for your future financial growth. Choosing the right investment plan is paramount. If you mess this up you could mess up your entire future and doom yourself to work forever. No pressure. But in all seriousness, make sure you have the right kind of investment plan. Never put your eggs in the same basket. Financial markets shift. That’s just the way of the world. So be careful.”
When should I start saving?
Odds are if you are old enough to read and understand the complexities of this article and you have not started saving for retirement, you’re behind. So you need to start saving as much as you can now. Being retired is expensive. With the cost of living rising in cost every year, you’ll also need to keep up with inflation. You’ll also want the freedom to do what you want to do when you want to do it.
Here is an example of the amount that you should be saving monthly, based on age. For 1 million dollars by the age of 65, this is compounded at 8% monthly.
Starting Age 20 – $192/month
Starting Age 30 – $433/month
Starting Age 40 – $1050/month
Starting Age 50 – $2917/month
So what’s easier to come up with, $192 a month or $2,917 a month?
Do you have Life Insurance?
Life insurance is another important part of the retirement process. If you don’t have life insurance you won’t be able to leave a legacy or cover your final expenses, putting the financial burden on someone else in your family, or even a close friend. Take a look at one of my articles on why life insurance is so important here.