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Architecture Guide
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Young Professionals
REALTOR® Emeritus |  | RETIREMENT BUDGETING | | ||
|  Are You Ready to Retire? Retirement Budgeting Sources of Retirement Income Tax-Deferred Savings Vehicles Estate Planning Selling Your Business Getting Your Business Ready for Sale Working With a Business Broker Closing-Your-Business Sale More Resources: Retirement Planning | Consider some of the following in developing an estimate of your future income needs. What Are Your Fixed Expenses?
TIP: Evaluate long-term care insurance and health-care alternatives, such as assisted-living facilities and in-home care when estimating your future living costs. What Are Your Recurring Basic Living Costs?
What Amount Would You Like to Allow for Discretionary Spending?
TIP: After completing a retirement budget, don’t forget to make adjustments for lifestyle changes that will affect what you spend. For example, you may need to spend less on clothes since you won’t need to wear business attire five or six days a week. Today's Dollar in Tomorrow's World Once you determine your income needs in today's dollars, you have to adjust that figure to allow for inflation between now and your retirement. Let's say your current lifestyle needs are about $5,000 a month after taxes. You'll need 75 percent of that amount, or $3,750 each month, to maintain your lifestyle in retirement. If you plan to retire in 20 years and anticipate a 3.5 percent inflation rate over the next two decades, you’ll need a monthly income of $7,461 at retirement to maintain your current lifestyle. If the inflation rate rises to 8 percent, you would need $17,475 a month at retirement to maintain the same lifestyle. TIP: Complete your calculations of how much retirement income you’ll need at least five years before you plan to retire to see if you have a retirement income gap. —Deloitte & Touche Principles of Retirement Planning You can use the calculator below to make that computation. Just plug in your own figures. Working With a Financial Planner > |