retirement planner

How much do I need to retire at age 55?

By Jo Leighton 21 August, 2023 2 mins read

It all depends on how you live. If you want to live a simple life, you will need less money than if you plan to travel the world, buy a house, or start a business. You will need more money if you wish to live a life of luxury.

Calculating retirement income

If you're approaching retirement age, it's important to have a plan for calculating your monthly retirement income. Your savings and the rate at which your investments return will impact how much money will you need when you retire. The complete report will show you your income each month and where you stand over the years.

Your desired lifestyle when you retire will play a big role in determining how much you need to save. Generally, it's recommended that you replace 70% to 80% of your pre-retirement income. This means that if you earn $100,000 each year, you should be able to save at least $80,000 per year. Social security and pensions will help to pay for a small percentage of your expenses during retirement.

Retirement savings

It is important to start saving as soon as you can so that you can retire financially secure. A good place to start is saving 15% of your income if it's your first year. This figure assumes you will stop working at 67 to start receiving your full Social Security benefits. If you are planning to work longer, you will need more savings.

Your age and your lifestyle determine the amount you need to save. For instance, if your goal is to travel extensively during retirement, then you need to save more. Several formulas are available to help determine your retirement income needs. One of the most popular formulas used to calculate retirement income is the 4% Rule.

Retirement expenses: How to estimate them

Planning for retirement involves estimating your expenses. It is essential to factor in both the annual changes in your expenses and the occasional large purchase. You should also have several years worth of data. These data may not always be readily available but will help you estimate the amount of money you will need over time.

The cost of housing and transportation is relatively stable over time. However, healthcare expenses can change and are unpredictable. The cost of housing will increase initially, but it will decrease as you age. Retirees also tend to downsize or move to cheaper areas, which can lower the cost of housing.

Considering long-term care costs

Many Americans mistakenly believe that health insurance will cover long-term care costs in retirement. Over 70% will need long-term healthcare at some time in their lives. Non-medical care can result from major illness or falls.

Long-term care insurance premiums typically increase with age. For people in their 50s, premiums increase by about 2%-4% each year. Premiums can rise up to six percent each year for those in their 60s. If you plan ahead, however, you can save money on the premiums and keep the costs down.

FAQ

How To Choose An Investment Advisor

The process of choosing an investment advisor is similar that selecting a financial planer. Two main considerations to consider are experience and fees.

This refers to the experience of the advisor over the years.

Fees are the cost of providing the service. You should compare these costs against the potential returns.

It's crucial to find a qualified advisor who is able to understand your situation and recommend a package that will work for you.

How old do I have to start wealth-management?

The best time to start Wealth Management is when you are young enough to enjoy the fruits of your labor but not too young to have lost touch with reality.

The sooner you begin investing, the more money you'll make over the course of your life.

If you're planning on having children, you might also consider starting your journey early.

You could find yourself living off savings for your whole life if it is too late in life.

What is wealth administration?

Wealth Management can be described as the management of money for individuals or families. It includes all aspects regarding financial planning, such as investment, insurance tax, estate planning retirement planning and protection, liquidity management, and risk management.

What are the Benefits of a Financial Advisor?

A financial strategy will help you plan your future. You won't have to guess what's coming next.

It will give you peace of heart knowing you have a plan that can be used in the event of an unexpected circumstance.

Your financial plan will also help you manage your debt better. If you have a good understanding of your debts, you'll know exactly how much you owe and what you can afford to pay back.

Your financial plan will also help protect your assets from being taken away.

Statistics

As of 2020, it is estimated that the wealth management industry had an AUM of upwards of $112 trillion globally. (investopedia.com)
According to Indeed, the average salary for a wealth manager in the United States in 2022 was $79,395.6 (investopedia.com)
A recent survey of financial advisors finds the median advisory fee (up to $1 million AUM) is just around 1%.1 (investopedia.com)
According to a 2017 study, the average rate of return for real estate over a roughly 150-year period was around eight percent. (fortunebuilders.com)