4 Things You Think You Know About Retirement
Think you know everything about retirement? These 4 things might have you thinking again.
- How much you’ll need.
60% of Baby Boomers think they need less than $1 million in retirement [1]—yet, experts estimate that the average American needs at least a quarter of a million for health care costs alone. Your living expenses are also not likely to remain the same in retirement. To determine how much you’ll need to meet your specific retirement objectives, use this retirement calculator.
- Your risk tolerance.
Each person has a different propensity for risk. As a young professional, you have the luxury to put some of your money into high-risk investments since your retirement is seemingly far away. Leading up to retirement, your last few years of savings will be different than when you were first starting out in your career. Because those nearing retirement have less time to recover from risk, you might consider incorporating a fixed indexed annuity to help you moderate risk in your financial plan. Remember to revisit your retirement plan every few years to make sure your savings reflect your current needs and adjust for market conditions. Not sure what your risk looks like right now? You can complete this questionnaire to help determine your risk profile.
- How much you’ve saved.
Nearly 1 in 5 Americans don’t know how much they’ve saved for retirement [1]. Adding steadily to retirement savings is a great start, but ensure you have a savings strategy and stick to your plan. Take the time determine how well you have prepared and calculate if your current savings are sufficient with your future needs. Set a strategy to achieve measurable financial goals. No matter your age, it’s important to keep track of how much is in your account. With online banking, it’s easier than ever to stay on top of your finances and make changes as necessary.
- How much you’ll receive from Social Security.
Many baby boomers are banking on Social Security as a main stream of income for retirement. However, the average monthly Social Security payment is only $1,406. That’s $500 less than the number the average Baby Boomer guessed as the average monthly Social Security payment. Check out our Social Security retirement income estimator to learn more about your approximate benefit.
[1] Data trends were compiled from the GfK’s KnowledgePanel, a nationally representative sample of 6,490 Americans between April and May of 2016 and Toluna’s online panel in August 2016, among n=510 adults (ages 18 and over). Figures for age, sex and region income were weighted where necessary to bring them into line with their actual proportions in the census population
