As thousands of baby boomers enter retirement each day, the topic of retirement savings is a popular one in the mainstream press and on the Internet. Almost invariably, a large percentage of the articles and discussions about retirement will focus on how much an individual or couple will need to save in order to live comfortably when they stop working.
But the size of a retiree’s nest egg is only part of the retirement equation. The other side of the equation that current and future retirees should be paying attention to is expenses. After all, it can be difficult to plan your retirement savings strategy if you don’t know how much to save.
Here is some retirement advice on other factors you need to consider as well.
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But over the course of many years (or several decades), those two portfolios are not likely to perform similarly. Even with the higher investment risk, chances are quite good that the second portfolio comprised of mutual funds will grow significantly larger than the “safe” portfolio of bank CDs.
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Before retiring, consider your future expenses in two categories; those you have a fair degree of control over, and those over which you have relatively little control. For example, your housing and entertainment expenses are somewhat within your control, but your medical expenses may be less so. Evaluating your likely retirement lifestyle, and using that information to determine how much you need to save, is very important.
By thinking of retirement in more than just terms of the target savings number, you’ll put yourself in the best possible position to be adequately prepared.
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