Estimate your life expectancy
General Information, Have MoneyThe age at which you retire isn't the only factor that determines how long you'll be retired. The other important factor is your lifespan. We all hope to live to an old age, but a longer life means that you'll have even more years of retirement…
Decide when you'll retire
General Information, Have MoneyTo determine your total retirement needs, you can't just estimate how much annual income you need. You also have to estimate how long you'll be retired. Why? The longer your retirement, the more years of income you'll need to fund it. The length…
Don't forget that the cost of living will go up over time.
General Information, Have MoneyThe average annual rate of inflation over the past 20 years has been approximately 3 percent. (Source: Consumer price index (CPI-U) data published annually by the U.S. Department of Labor, 2009.) And keep in mind that your retirement expenses…
Project your retirement expenses
General Information, Have MoneyYour annual income during retirement should be enough (or more than enough) to meet your retirement expenses. That's why estimating those expenses is a big piece of the retirement planning puzzle. But you may have a hard time identifying all…
Use your current income as a starting point
General Information, Have MoneyIt's common to discuss desired annual retirement income as a percentage of your current income. Depending on who you're talking to, that percentage could be anywhere from 60 to 90 percent, or even more.
The appeal of this approach lies in its…
ESTIMATING YOUR RETIREMENT INCOME NEEDS
General Information, Have MoneyYou know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you'll need to fund your retirement.
That's not as easy as it sounds, because retirement planning…
Common questions about financial planning
General Information, Have MoneyWhat if I'm too busy?
Don't wait until you're in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have.
Is the financial planning process complicated?
Each financial plan is…
Staying on track
General Information, Have MoneyThe financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to…
Why can't I do it myself?
General Information, Have MoneyYou can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you…