Sometimes an article will present a generic retirement forecast, stating that the average person may need “X” dollars in savings to retire confidently. Stories like these appear every so often on financial websites, and they must be taken with a grain of salt. These articles imply that a pre-retiree household must amass a certain amount of savings or face a financially pressured future – but the forecasts they present may not apply to you.
In reality, saving and investing for retirement is not strictly about reaching a numeric goal, with your investments or your net worth. Just as there is no one-size-fits-all retirement strategy, there is no “average” retirement savings number that applies for every individual or couple. New retirees may want to leave work and enjoy a similar quality of life, and that relates to retirement income and retirement spending. So, a key goal of any retirement strategy is saving enough, so that you can potentially retire with enough income to support your lifestyle. This is why it is crucial to periodically review a retirement strategy, especially after age 50. While a pre-retiree cannot know exactly what they spend once retired, the degree of saving and investing may increase – or decrease – in view of possible future income needs.1
Mike Moffitt may be reached at ph# 641-782-5577 or email: firstname.lastname@example.org
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1 – forbes.com/sites/kristinmckenna/2019/07/10/debunked-6-myths-about-retirement [7/10/19]