You’ve read the title, I’m sure. If you love movies like I do, let me make it clear that I’m not talking about the 2011 romantic comedy starring Anna Farris and Chris Evans. Although I’d say funny girl Anna Farris was her usual witty self in that flick and I’m sorely tempted to enumerate the things I didn’t particularly like about the movie, we’ll stick to our guns and talk money this time.
It’s been a while since money was tackled around here, and I don’t want the followers of this blog to start believing that personal finance is long dead and gone as a topic at Career Mom Online.
Preparing for retirement
There is this notion that when a person starts to contemplate about retirement, he’s getting old. Years back, I would have thought the same thing. A few personal finance books later, I realized it’s never too early to think about retirement. If you realize there’s such a thing called retirement only when you’re nearing retirement age, you might not have enough time to financially prepare for it.
While I concur that a secure and comfortable retirement isn’t solely about the money, that it also has a lot to do with gradual and smooth transition from one life to another, especially for people whose self-esteem is derived from their careers, let’s face it – having sufficient financial resources makes retirement a whole lot easier.
That said, let’s go back to our question. Indeed, what’s your number? As you might have already guessed, I’m referring to the magic number you’d need to retire securely and comfortably.
Interesting question, isn’t it? The answer is, as some of you might be aware, it depends.
- It depends on the amount of money you would need to sustain the lifestyle you desire when you retire. If you envision yourself traveling to places you’ve never been to before, you’re going to need much more than somebody who prefers to live a simple, quiet life.
- It also depends on when you plan to retire, whether or not you’re in the mood to work beyond the mandatory retirement age of 65, and how long you expect to be in retirement.
From the above qualifiers alone, it’s clear that determining your number may require a bit of work, especially if you take into account the cost of inflation, returns on investment and the cost of healthcare by the time you’re retired.
Know your number
To know if you’re on track to meet your retirement needs, check out the following:
- Online calculator. Although it doesn’t clearly say the amount you’ll need for retirement, based on prevailing savings rates, this online calculator from MSN can determine whether you’re financially on track for retirement or need to ramp up. (Just ignore the $ sign if your country’s currency is not in dollars.) Remember though that while online calculators give you a broad overview of relevant retirement planning factors, they are based on assumptions and cannot be deemed accurate.
- Ballpark figure. Your retirement amount may also be estimated by multiplying your current annual salary by 12. John Ameriks, an investment counseling and research group head, asserts, “People shouldn’t get too comfortable until they have a number that’s 12 or more times their current salary.”
Disclaimer: The information provided in this article is not intended to replace sound financial advice from a qualified financial planner. To accurately know your number, talk to your trusted financial adviser.
Latest posts by Maricel Rivera (see all)
- Creating a Working Environment in the Home - October 4, 2013
- Time Management is Life Management: When Life Gets Inundated by Time - June 16, 2013
- Speed Writing Is Not Rocket Science, Or Is It? - June 9, 2013