When it comes to saving for retirement, achieving success doesn’t just happen. It takes having a strong vision for what you want, then taking steps to achieve that vision. Your retirement is no different. If you have a vision of retirement, you’re more likely to take the actions to help you live that retirement.
Set your goals
Start by defining what you want.
People who have clear goals tend to be more likely to achieve them than those who don’t. So give yourself time to write down your dreams for retirement.
Once you’ve written it all down, come back to your list every once in a while to remind yourself what you’re aiming for and add or subtract ideas as they occur to you.
Imagine that you finally have the time and resources to do whatever you want. What would you do?
Then determine what you might need.
When you retire, expenses such as commutes and work-related clothing go away. But many fundamental expenses remain. And the cost of living will likely continue to increase, so you'll need the resources to keep up.
Ideally, you’ll have enough savings to cover all of these costs plus your retirement dreams.
- Health care: A married couple with median drug expenses will need $363,000 to have a 90% chance of paying for their retirement health care costs, according to a 2019 study from the Employee Benefit Research lnstitute.1
- Housing: You may initially downsize to a residence that will lower your expenses, but later you could move to an assisted-living facility or nursing home, resulting in higher expenses.
- The next generation: You may want to help your children with their important life events, like helping with a down payment on a house or starting a college savings plan for your grandchildren. If you wish to leave a financial legacy, you may want to make that part of your retirement savings plan, too.
If you can anticipate what you’ll spend in retirement, you can take actions to prepare yourself for those costs when the time arrives
Calculate your savings needs
Want a better sense of how much you may need to save? Use this calculator to get a general estimate.
Try this calculator to get a comparison
Compare these figures with or without help from Social Security
- In today's money
- In 2039 money
Revisit your goals often
It’s one thing to come up with a plan for retirement. It’s something else to make it happen. That’s why you’ve got to keep reminding yourself of where you stand and make adjustments if needed.
You may have found, for example, that some of your family’s needs are different now from what they were when you came up with a plan five or 10 years ago. It’s important to connect regularly with your advisor to review your goals, progress and investments.
Regardless of what your retirement goals include, you and your advisor should capture what’s most important to you, carefully determine your risk tolerance and ensure that these are updated along the way.
Things change, which is why you need to regularly review your retirement goals and check for adjustments
1Employee Benefit Research Institute. January 2019. Savings Medicare beneficiaries need for health expenses: some couples could need as much as $363,000