Retirement Readiness Assessment
- You are currently planning to retire in 26 years at age 65 with a retirement budget of $5,000 a month.
- To support your desired lifestyle at retirement, you will need approximately $4,244,424 during your retirement years.
- To have this amount, you need to save approximately $2,335,906 in 26 years by the retirement start date, assuming your retirement savings will be invested at a 4.2% return rate when you retire.
- Assuming a 6.5% investment return before retirement, you can accumulate the required amount by saving $2,383 a month.
- You indicated you currently have $100,000 in savings allocated toward retirement and contribute $1,000 a month.
- This leaves you with a $1,057,172 gap in your retirement savings plan. Without adjustments, you may run out of money by the age of 80
- To balance the plan, you can increase your monthly savings to $2,383 a month or may need to postpone your retirement to age 72.
- Review and update your inputs, primarily your retirement age and monthly contributions. The earlier you start to contribute and invest your retirement fund money, the longer time these funds will have to appreciate reducing your need for extra savings.
- Review your current cash flow. Do you pay for subscriptions that you do not use? Can you optimize your taxes? Making even small changes to your monthly cash flow can help you contribute additional amounts toward savings. Investing these extra funds can compound returns over time and help you achieve your goals.
- Check your Social Security statement to see how much of your retirement budget can be covered by these benefits. See what benefits you can qualify for and how to coordinate them better.
- Review your investment policy. Can it generate your desired rate of return without exposing you to the sequence of returns risk? Make sure you have a plan for handling market downturns without affecting your ability to reach your financial goals.
- Review your insurance policies and make sure you have sufficient coverage.
- Do you have other financial goals besides retirement? Developing a comprehensive financial plan can help you achieve your goals and give you piece of mind.