According to a recent survey, even the wealthiest Americans believe they need more money to secure their future - $2.3 million, on average1
Everyone wants to feel financially
secure. The question is, how do you
determine what it will take to reach that
point, particularly when it comes to
Run the numbers
The first step is to
calculate how much income you will
need to live comfortably and pursue
your lifestyle goals. This means taking
into account a number of factors. For
example, based on your health and
family history, how long do you expect
to be retired? How much should you
expect to spend on health care?
Most experts suggest that you will need
70 to 80 percent of your pre-retirement
income in retirement. This may be a
good place to start, but a more detailed
calculation will give you a more realistic
idea of your needs.
Devise a strategy
Next, identify all
available sources of income and estimate the future value of your savings. For example, what is the
value of your current savings and investments, including retirement plans? How long do you plan to
receive income from part-time or full-time employment? What role will Social Security benefits play in
your financial strategy?
Finally, determine how long your savings will last based on your anticipated length of retirement,
desired lifestyle, and investment growth assumptions. Do you need to adjust your portfolio in order to
meet your needs?
Regardless of your net worth, planning for a long, comfortable retirement can be intimidating. Taking
the time to map out a personalized strategy might be the key to funding the lifestyle you've always
1) BMO Private Bank / Pollara Online Survey, 2013