Do I Have Enough Money to Retire?
Years of work behind you, it may be time to consider retirement. Trying to figure out whether you have enough money to retire may leave you bewildered. How much is enough?
“Enough” is vague. Enough for you might be sufficient funds to:
- Enjoy a fulfilling lifestyle;
- Cover unexpected expenses and emergencies;
- Allow you to fulfill some lifelong dreams;
- Keep you from lying awake at night worrying.
So, where do you start?
The easiest way to figure out if you have enough money to retire is by comparing your retirement spending with your retirement income.
Sources of Income
What will you live on after you’re retired? Take a look at all sources, including Social Security, annuities, interest earned on investments and savings, business dividends, and disbursements from trusts or other financial accounts.
Costs and Living Expenses
What will be reasonable expenses for you when you are no longer working? Typical expenses for a retiree include:
- Rent or mortgage payments;
- Loan payments;
- Medical expenses;
- Fun money;
- Insurance payments, including medical, automobile, renter’s insurance and so on.
When you compare your income to your expenses, what do you see? A happy cushion between what you need and what you have? Or are seeing a big gap between the two?
Keep looking. You may be able to increase your income by working part-time, consulting for your former business, or generating some passive income. As for expenses, your desire to retire may exceed your need for certain luxuries. By cutting expenses and increasing income, your dream retirement may be right around the corner.
Do You Need an Incapacity or Disability Plan?
“Enough” is really a vague concept that varies from person to person. One retiree’s needs are not the same as another’s. Know yourself, crunch some numbers, and set some goals before scheduling your retirement party.
To discuss your concerns with an experienced Arizona lawyer, call us at (480) 418-8448 or check out one of our free seminars. We provide estate planning advice for clients throughout Arizona, including Ahwatukee, Chandler, Gilbert, Sun Lakes, Mesa, and Tempe.