Planning for Retirement Income
A comfortable retirement requires thought and preparation. This is especially true when it comes to retirement income. Certainly, assets and legacy planning have their place. But, the big issue is: will you have enough income? For many years, costs have been rising. This includes healthcare, taxes, and even day-to-day living expenses. In addition, we believe in helping our clients plan for other costs, too. For example, you may want to have extra money for travel, gift-giving, or entertainment. Our team works to help you learn strategies with life-long income potential.
When thinking about income, it is important to consider inflation, too. Too often, people forget to include this in their plans. So, what might a typical inflation rate be? Some experts recommend using 2% as the estimate of inflation rate each year. Of course, this could be higher or lower. Therefore, all we can do is make our best guess. The important thing is that you are aware of inflation. And, that you plan for its potential impact on your retirement income. Basically, a 2% inflation rate causes everything you buy to cost 2% more every year. By doing this calculation, you can get a more accurate idea of how much you’ll need.
Let’s say you need $52,000/year to pay your bills. In addition, let us use 2% as the inflation rate. Those same expenses will cost you at least another $1,040 just one year later. After 5 years, you’ll need $57,000/year to cover the same lifestyle. In 10 years, the number jumps to almost $63,400. That’s over $1,000 per month more than you originally thought. Because inflation rates can change, these are not exact numbers. However, it gives you a good idea of how inflation works. In addition, it shows why it should be part of a retirement income plan.
At Preservation Financial Group, we work to help you make a retirement income plan that’s right for you.
Budgeting in Retirement
You probably have a game plan for building wealth. But, have you thought about how you’ll spend it wisely? Take the time to think through your expenses. Indeed, you should look at both your “must haves” as well as your “nice to haves.” Some of your required expenses might include: transportation, food, and housing. Other items may include healthcare or insurance costs. Then, take into account the extras. This could be things like dining out, gifts, or travel. Also, some retirees budget a certain amount to donate each month or year.
In addition, you may choose to have a “just in case” line item on your budget. Of course, things come up. When they do, you’ll be glad that you allowed for them in your budget. Creating the opportunity for life to happen can help you have a comfortable retirement.
Retirement Income Guidance For You
Pete Tychsen has spent decades helping retirees. He and his team work to make sure you have strategies for retirement income. We’ll review various tactics with you. In addition, we can help you to learn ideas for keeping your principal protected. Our goal is to help you learn ways to potentially reach your goals. Let us help guide you through some retirement income and long term planning strategies.
Looking to learn more about retirement income planning? Have a question about your current retirement plans? Reach out to visit us at an upcoming seminar. Or, contact us for an appointment today.