Is it Time to Retire?
Your retirement goals, needs, and time horizon are important factors in developing an appropriate retirement investment strategy.
Many folks approach retirement by asking, what percentage of my current salary will I need to replace? That percentage is usually less than 100, as most envision costs falling in retirement—the kids are grown, big loan obligations are almost complete, they aren’t commuting anymore and life gets simpler. A majority of workers surveyed believe they can live off of 70% of their pre-retirement income. Yet some warn folks are vastly underestimating their future expenses. Who’s right? Well, it depends—everyone’s situation is unique. There is no one cookie-cutter salary replacement ratio that will work for everyone.
Taking stock of your current costs and income sources and projecting them forward can give you a better idea of what you’ll need from your portfolio during retirement. First, you’ll need to figure out your costs, both fixed (like a fixed-rate mortgage or medicines) and variable (utility bills). You should also identify discretionary costs, too—if an unexpected expense arises or if returns aren’t what you projected, this would be the first place to make adjustments. Factoring in your current costs, as well as planning for future ones (e.g., a grandchild’s tuition, traveling the world and/or remembering health care expenses rise as you age) will give you a sense of what your portfolio needs to provide. Granted, nobody can predict their future expenses perfectly—life changes. But having a plan in place will put you in a better position to avoid any nasty surprises.
Fisher Investments’ 15-Minute Retirement Plan™ can help you begin the process of developing a retirement investment strategy that is suited to your individual goals and financial situation. A variety of topics will be covered in the guide including:
The Truth About How Long Your Nest Egg May Last
Why It’s Important To Prepare For A Long Retirement
How Inflation Can Impact Your Retirement Plan
At Fisher Investments, our goal is simple: Help you reach your financial goals by developing a personalized strategy for your retirement investments.
**Download count as of July 27, 2018.