One of the most troubling thoughts when it comes to retiring is probably the “Do I have enough money?” Even people who have been saving for all their lives aren’t quite sure whether they will have enough money to be able to live well if they retire. And this is completely normal, because things change over time and without a professional financial planner it can be difficult to be aware of all the factors influencing your retirement income. However, it can be done without professionals or financial planning software. The most important thing you need to have is a determined goal for your income. In order to determine what your retirement income will be if you retire right away, you need to go through some steps. Read on for more information.
1. Estimate your budget
First, you should see what your current income is. Before you retire, you should have at least the amount of money 12 times bigger than your current annual salary. According to head of Vanguard’s investment counseling and research group John Ameriks, people shouldn’t get too comfortable before they have their annual salary multiplied by 12 on their retirement account. You need to consider that you may live until you’re 90, so you should have income for the rest of your life.
Also, you need to estimate your budget- what expenses could come your way and how much you’re spending now. If you’re spending your entire salary, you may want to start trying to spend less and saving for the future. You will be using your retirement money for the next 10-15 years after you retire, and that money needs to be enough to cover you healthcare and lifestyle costs. When you determine your current budget, consider that your retirement income will be around 80$ of your current salary. If your spending can fit into that amount of money, you’re probably ready for retirement. If not, but you want to retire sooner, you should consider putting some money on the side.