Best Things to Ask Yourself to Know How Much You Need to Save for Retirement

Many people don’t think about saving for retirement until it is inevitable that the days of no longer getting up and going to work are just around the corner. While retirement may be greeted with eager anticipation of sleeping late, babysitting grandchildren and taking frequent vacations, there are some things aspiring retirees need to consider before jumping ship for the calmer waters away from work. Many people are electing to work longer to secure a more comfortable retirement. Whether you are ready to retire or just thinking about it, the following are some of the best things to ask yourself to know how much you need to save for retirement.

Will I be able to live the same lifestyle as I live now? Working for several years after the children have become independent leaves a good amount of disposable income for some adults. For many this means eating out often, traveling and not worrying much about prices when purchasing some items. Depending on the job a retired person held, his or her monthly income could be reduced by as much as fifty percent. This will require some budgeting and cutting back in some areas such as eating out or shopping for clothes.

Will I be able for afford the insurance I need? Many working people usually have access to health, life, vision and dental insurance. Even if they are paying a monthly premium, the employer generally picks up a significant amount the cost. If a retiree has not reached the age to qualify for Medicare, he or she will be required to pay for insurance costs out of pocket. This can easily eat away at savings or other resources.

Another question that needs to be asked is “Can I afford to live in my current home?” If a retiree is still paying a mortgage and income is reduced, there is a risk of losing a home. A retiree may be required to move into subsidized housing or rely on adult children for a place to live. There are other expenses to consider even if the home has been paid off for a while. A retiree will still need to pay property taxes and take care of necessary repairs. A heating and air-conditioning system can cost several thousand dollars and so can a new roof. Replacing these items can deplete retirement savings quickly. When thinking about retiring these potential expenses should be considered.

What will happen if I am no longer able to care for myself? Long-term care is another area of concern for those looking forward to retirement. Health issues may force a retiree to look for other housing arrangements. This could mean living with adult children or moving into a long-term care facility. Regardless of which arrangement is chosen, decisions concerning how to pay for in-home care if needed and how to pay for long-term care such as assisted living or a nursing home.

These are just a few questions you should ask yourself to know how to save for retirement. If you are close to retirement don’t despair–take an honest look at your situation and determine where you can cut back now and save more for future expenses.

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  1. Pingback: Dwindling Debt – The Pros and Cons of working Another Year before Retiring

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