How To Calculate What You Need For Retirement
episode
Wealthy After 40: Retirement Planning and Budgeting for Gen X
15 min
1 speaker
4 chapters
transcribed 1 month ago
Transcript
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What is the main topic discussed in this episode?
Welcome to the Wealthy After 40 podcast, the show for Gen X women and couples who are ready to ditch financial stress and feel confident about retirement. I'm your host, Dailene Higgins, money coach and retirement strategist, to help you gain clarity and confidence with your money by creating a spending plan that aligns with your financial goals and dreams so you can spend intentionally, save consistently, and feel at peace about your future. Join me every week to understand your money, simplify your decisions and take intentional steps toward the life you want. Welcome to another episode on the Wealthy After 40 podcast.
How do I decide if my retirement savings will be enough?
Have you ever stared at your retirement account balance? whether it's a statement or on their website, and you thought, is this going to be enough? And then you close the tab or you tuck the statement away and you're like, I'm not sure how to answer that or I don't have the time to answer that. This episode is for you. Less than 20 minutes, I'm going to help you answer that question. Is this going to be enough? The reason we keep pushing retirement to later is because we're either just finishing the most busiest season of life, raising kids, managing our debt, or handling rising costs, maybe caring for aging parents. And so it's easy to say, I'll deal with retirement later. I'll worry about it later.
I'll worry about it when I have time because there is so much or we're so exhausted having just gotten out of it. And it's like, now what do I do? So today, I'm going to help you figure it out very simply. I'm going to give you three things to help you know if you're on track, your timeline, your number, and a simple formula. That's it. All right, let's get started. So the first thing is you need to know your timeline. Now, what do I mean by timeline? This is your goalpost. This is your retirement date. This is your goal. This is what you're aiming for. I talk about it in episode 161 called Understanding Your Timeline. So if you're not sure how to figure this out, all of the details, I go in that episode, I go deeper.
But the reason you need to have it is that you can't measure your progress towards a goal or a destination that hasn't even been chosen. I'm going to retire some day, so how much do I need? When? Why? How? All of those questions. So the very first simple thing you can do is pick a retirement age. And I know this is scary because you're like, how do I know I'm going to have enough money at that age? This is your starting point, okay? Just because you pick this age, pick this date, pick this number of years, it can be in any form of that, does not mean that it's going to be exact, but it's going to help us get started. Again, step one. Understanding how to pick this age or these number of years, we've got to understand what are the age restrictions on 401s, IRAs, Social Security, because we have early, mid and late withdrawal, pension, if you have one, there's going to be some age restriction there.
And then do you have other investments outside of that? They don't typically have age restrictions. So understanding those briefly will help you also choose an age. Thinking through what age would each income source kick in. It adds to that whole idea of when can I, because these things are going to come and help me replace the income I am making. But the reason you need to choose a timeline, know your timeline, again, age, the year, or number of years left. Those are the three forms it can be in. Having this will turn your retirement from a vague someday into an actual goal you can actually measure with. Because once you know when, then the next question is, how much will I need? Okay, actually, it's how much it's going to cost.
So step two, you need to know the cost of your reality. Okay, that's a little phrase I came up working with one of my clients to really understand what your life cost. Okay, what does it cost to live, enter your name here, family name, whatever, What does it cost to live your life? It's going to be different than your neighbor.
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Chapters
4 chaptersSpeakers
1 identifiedMore from Wealthy After 40: Retirement Planning and Budgeting for Gen X
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