For most investors, this is the key question:  Will I have enough to maintain my lifestyle for the rest of my lifetime or will I run out of money and need to be dependent on others?

• Are you saving enough?  We suggest 20% of gross household income (this is before taxes).
• Do you spend too much on your house, cars, eating out?  Don’t try to keep up with the Joneses
• Do you need to work to age 70 or longer?  Many people will need to work past age 65.
• Should you delay taking Social Security until age 70.  If you expect to live into your 90’s, this may be a good strategy.
• How much money should you have saved for retirement at your current age?  Here is the formula we use.  If you are 50 years old and household income of $100k, we suggest you should have about $500k saved for retirement.  Not counting your house.  (50 yrs. old x 10% x household income).  If you have more than your target, you are on track.  If you have less, you might need to save more and work longer.
• Some of the top reasons people fall short of their retirement savings goals are: health problems, downsizing at company, care for spouse or other family member, outdated skills for employment.  It is important to save early and let your money work for you over time.
• If you are not on track today or concerned about maintaining your lifestyle in retirement.  It is very important to work with a competent, low cost, fee only advisor who is a fiduciary for you 100% of the time.  Take action now.  Most people need a coach.  We offer a free 2nd opinion service for people with portfolios above $500k.  Give us a call at 303-549-4720.  Please forward this blog to your friends.

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Here is a great calculator from DFA to help you project your income in retirement.  

• I strongly suggest that you calculate retirement age + withdrawal period to age 95.  If a couple retires at age 65, there is a 47% chance that one person will live until their 90’s.
• You can adjust your savings rate up or down and recalculate the estimated retirement income per year.
• You can adjust working longer to age 70.  This allows you to save more and have less years in retirement.
• You can also estimate your SS income if you believe this will be an accurate amount.  Keep in mind that changes will be made to Social Security in the future.
• Look at the below example for someone age 50, annual income of $100k per year, save $1k per month + $300 company match, retire at age 65, withdrawal for 30 years.
• Estimated median income is $41.5k per year.  Half of the projections are above this level and half are below.
• Sounds good but what if you have bad market returns over your retirement?  90% of the returns generated over $25.7k per year.

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Good luck.  If you need help, give us a call at 303-543-4720

Tag: Will You Run Out of Money?