Financial experts generally recommend that Americans plan on living on no less than 80% of their annual pre-tax income. Depending on your expected lifestyle, which might include traveling, some retirees may want to consider a target of 100%.
Let’s look at where your retirement income will come from over the next several decades.
Social Security Benefits: Create a mySocialSecurity account to receive estimates of your future benefits. Estimates are based on your actual earnings at age 62 and are a key factor if you’ll rely on your Social Security benefits during retirement. Then, use the official Social Security calculator to see what these numbers would look like if you delay claiming your Social Security benefits.
The 4% Rule: This 4% retirement rule states that you should plan on withdrawing 4% of your savings the first year and adjust upward for each subsequent year to keep up with inflation. The size of your savings nest egg should sustain you for roughly 30 years.
Health Insurance Costs: Did you contribute to a health savings account (HSA) during your working years? This move alone can help keep costs down since you can draw on these funds to cover medical expenses throughout retirement. Medicare and Supplemental Medical Insurance are available after age 65, but that doesn’t mean you should rely on them to cover all your medical expenses.
Still unsure if you have enough money saved for retirement? Contact Hughes Federal Credit Union. We can help you outline a strategy as well as perform a review of your investment accounts to get you on track to a stress-free retirement.
