With the broad rallies in the markets this year, we are hearing more conversations about getting back on track for retirement. Since this can be a complex topic, we wanted to share with you the best expert advice we’ve seen on the right steps to take.
- Clarify how much you need to live. Look at the annual income you need to live today and increase it to account for inflation. If you are planning to retire in 20 years, for example, you should double today’s income number.
- Identify how much you’ll need to save. Take the number you arrived at above and multiply by 25 to get your total retirement savings amount. This approach helps make sure your money lasts as long as you do.
- Assess where you stand today. Evaluate your current retirement investments. Remember, this does not include your home equity or accessible savings.
- Find your gap. Subtract the amount you have from the amount you need. This is your retirement savings gap.
With this number, you can consult with your financial specialist to help you determine the best plan to close the gap and achieve your goals.