Older man in suit coat staring at laptop planning his retirement.

Is Retirement Really Only About Numbers?

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When it comes to retirement planning, it can easily feel like a numbers game. For instance, you’ll need to consider: the age you plan to retire, how much money you’ll need for living expenses, and so forth. But is retirement really ALL about numbers?

Numbers give us a baseline to help you financially plan for today and the future, but those numbers can change throughout your life. Whether retirement is in sight, or far down the line, the right retirement strategies can help set you up for success at any age.

At Trajan Wealth our goal is to help you plan for a happy retirement, whether it’s spending more time at your cabin tucked away in the woods, getting closer to your grandchildren, or traveling around the world!

Economic Conditions

A recent survey discovered that while the average Baby Boomer has a means of $152,000 in savings, they spend roughly $48,885 annually. Due to the 2008 financial crisis, as well as the current Covid-19 pandemic, economic conditions have affected retirement plans for a generation currently heading into retirement.

Only about 40% of Americans have calculated how much they’ll need for retirement and most have underestimated just how much, and how long, they’ll need their retirement savings to last. It’s also difficult to predict the economic challenges that can affect us and our financial plans in the coming year.

While early retirement is sometimes inevitable, due to workforce changes, such as layoffs, you’ll want to aim to hit your retirement at your planned age. If your retirement savings aren’t enough to support your lifestyle, retiring will be delayed as you continue to earn income.

If you enjoy the work you do and are physically able to continue doing it, then extending your work life may positively affect your retirement (plus your bank account will thank you!).

However, depending on your personal situation and career, you may be interested in a faster timeline. To compromise between your happiness and your bank account, you may even consider a part-time job doing something that brings you joy and fulfillment.

The numbers involved in retirement planning (i.e. your ideal age and savings amount) are one factor, but your emotional and mental health is another. Keep that in mind as you continue planning! Working with a financial planner can help you ensure you’re serving both your goals and the reality of your financial situation.

A qualified financial advisor will help you with your financial health, as well as ensure you understand your portfolio and that you have a clear picture of your financial future. Without a steady primary income, people who have retired are vulnerable to sudden events that cost a lot of money. That’s why planning is so important.

Health Conditions

Eye doctors, dentists, and other specialists can have big bills. Without employer-provided health insurance, the cost of a significant procedure or new health condition can be devastating. You’ll want to factor high medical costs into your retirement savings so you have enough for a rainy day.

When you know your ideal retirement number, you can start to plan for how much you need in savings. If you have Social Security and a traditional pension, data suggests you should aim to spend about 4% of your savings a year. This number allows you to draw from your savings for 30 years – a considerable amount of time at retirement age.

If you think spending at or below that 4% on an annual basis is too much, you have two options: save more now or spend less in the future. The more years you work, the more money you can put away for retirement.

If you were born between 1943-1954, the full retirement age is 66. If you were born in 1955-1960, the age increases to 67. If you’re both after 1960, full retirement benefits become payable at 67. But your personal retirement age is ultimately up to your goals and your financial planning.

What to Consider Before Retiring

As you’re saving for retirement, utilize a financial advisor to help you determine how much money you’ll need to live a comfortable life. By putting together a plan today, you can take control of your future tomorrow!

If you have concerns about your retirement planning, consider a portfolio review with one of our experienced financial planners at Trajan Wealth.

We’re here to help you get retirement right!

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.