Page 9 - WRS-0918-0001 We Are Seniors Magazine DIGITAL

HOW TO RETIRE? INVEST IN YOURSELF.
By Chris Quinn
In short, the amount of money required for retirement depends on how long you live. Planning for retirement is a lot like blood pressure, it is a constant moving target. What we do know is with improved healthcare and a stronger economy means that people are living longer than the generation that preceeds them.
It’s never too early to start thinking about how to maximize your income in retirement. Retirement
is an investment and like all investments it makes more sense the longer you play the game. A dollar invested today is worth more at retirement than a dollar invested tomorrow. By acting earlier, you have a better chance at achieving and funding the lifestyle you want.
A common rule of thumb is that if you want to retire at 60, you will need about 15 times the amount you have calculated for your annual after-tax retirement expenses. So if you estimate $60,000 per year then you will need $900,000. Hang on to that formula. If you can wait until 65, you may only need 13 times expenses, which will be $780,000. Remember, if you plan to leave a legacy to your children or have a holiday home, then you need to add the cost to this estimate.
When budgeting for retirement, run the numbers against maximum life expectancy. In the United States men and women have a life expectancy of 86 and 90, respectively. This means if you retire at 60, you need to fund your living expenses for at least 26 to 30 years. Your lifestyle and medical history as well as your family’s can also play a major factor. Does cancer or heart disease run in your family?
If you find the formula too general and need something more specific, you may be better served by having a more detailed understanding of your actual needs. This is where a regular quarterly survey of current retirees comes in handy. Many people spend
a lot more in the early years of retirement as they travel and enjoy the fruits of their labor. While this cash outflow may be scary initially, it tends to even itself out in later years.
Whatever method you use to estimate the amount of money you need to achieve the lifestyle you want in retirement, it’s still important to remember that most of these work on the average life expectancy. If your family has a history of longevity or early death, then you need to make allowances accordingly. There are many affordable investment opportunities to help you along the way but as i said earlier, you must invest. Try low-risk mutual funds for example. They have a low risk initial start, typically involcing a large group of stable investments you can customize and work very well over the course of a long investment period.
It is much like blackjack. I always hit on 15 and never on 16. Yes you may lose a few hands with a 16 but
if you sit at the table long enough, the mathematic algorithm works out in your favor. It is a marathon, not a sprint.
The bottom line: It’s never too early to start planning. The name of the game is investing. Whether that
is a 401k, 529’s for the kids, or Life Insurance, the investment is in yourself, your future and your legacy’s future. I dont know about you, but I always bet on myself.
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