How much should you be saving for retirement? A quick Google search of this question will give you plenty to think about but few concrete answers. You may even end up more confused than when you began. That is why I think a better question is: What do I want my retirement to look like?
Don’t think of planning for your retirement as homework. Think about it like dreaming about the future. Once you have defined what you are saving for, everything else can come into focus more clearly.
- Pick a date – Notice, I don’t use the word retire. Pick a date you will need to start drawing on your savings. This can mean you are still earning income but you want the option to work less or focus on volunteer work rather than a full time job.
- Pick a lifestyle (within reason) – Are you going to spend the same, more or less during retirement? Do you want to travel, have a vacation home, gift funds to your family? These are important questions to consider when determining how much you will need to save.
- Pick a wild card – Your “wild card” might be something on your bucket list – think about the one thing that would be a stretch but you would really like to do. Some ideas might be asking yourself:
What if I…
- Retired “early?”
- Took up a unique hobby?
- Had a second career, or started your own business?
Now, don’t get me wrong, there is still homework involved. You will need to put pencil to paper to figure out how to attain that dream and really determine how much you should be saving for retirement. In fact, there are many great online resources and calculators to help you out. Or better yet, use the guidance of a financial profession to help you.
Note: Non-Deposit Investment Services are not insured by FDIC or any government agency and are not bank guaranteed. They are not deposits and may lose value.