Did you know that the average person has $95,776 in retirement savings? And that the average retirement lasts 18 years ?
That's less than $500 a month - which may not even be enough to cover your rent.
Thinking now about how you can support yourself after you're done working will help you feel at ease now and in the future.
We may not all age as gracefully as Tony Manero, but we can all plan and save to make our later years more secure!
Step 1: Imagine Your Ideal Retirement
What do you want to do in retirement? How do you want to spend your time?
Do you want to golf all day? Visit all the minor league ballparks in the U.S.? Spend as much time as possible with your family?
Understanding how you want to spend your time will help you understand how much of your income you need to replace.
What percent of your current annual income is usually deemed enough to retire on?
Step 2: Set A Target Age To Retire
How old do you want to be when you stop working?
If you plan to retire at age 65, you'll want savings that can support you for another 20-30 years.
Living a long life is a blessing, if you have enough money set aside to support yourself.
Step 3: Calculate Current Savings
Now we can put our retirement picture together. Let's understand potential sources of income:
Do you have a work-sponsored pension?
Do you expect to receive Social Security or other government support?
Do you own any assets (i.e. house, rental properties, land, etc.)?
Do you own any stocks or bonds?
Do you have a savings account?
Add up all sources of retirement income.
Divide this total by 75% of your annual income. This is how many years your current savings will support you for.
Is it enough to support you until you're 90 years old?
If there's a gap in your retirement savings, what immediate changes can you make to close it?
Increase your monthly earnings?
Decrease your monthly expenses?
Put savings into investments?
Future you will be grateful!