With folks routinely living into their 80s and 90s, it’s more important than ever to ensure your money lasts a lifetime. Whether you’re early in your career or planning to retire soon, two factors play the largest role in your savings strategy:
- your current income and ability to save
- the lifestyle you seek in retirement
Explore these questions and contact Elements Wealth Management to schedule a complimentary consultation to discuss how our LPL Financial Advisors can guide you on this journey.
How much do I need to save?
There is no magic number and talking with a Financial Advisor about your unique situation is the best way to establish a target amount that fits your needs and aspirations. According to CNBC, a reasonable goal for many is “having the equivalent of your salary saved by age 30, four times your salary saved by 40, six times your salary saved by 50 and eight times your salary saved by 60.” As you look to save, many experts recommend a savings goal of 10% to 15% of your pre-tax income each paycheck.
How will your lifestyle change?
Everyone pictures retirement a little differently. As your career ends, you may no longer be drawing a salary, although many people take up some form of self-employment that brings in an income. It’s up to you whether earnings will be part of your retirement plan, but if not, your savings should be robust enough to supplement your Social Security without sacrificing your desired lifestyle.
Many experts advise that if you make $100,000 annually at retirement, you need at least $80,000 per year to have a comfortable lifestyle after leaving the workforce.
No matter what age you’re at now, thinking about how you want to live at your target retirement age is a critical piece of the financial planning puzzle. To get a reasonably accurate figure of how long your savings will last, you can derive your annual “burn rate” by taking your life expectancy age, minus your retirement age and multiplying your projected average annual spending for a target dollar amount you’ll need in savings.
Am I on track for my goals?
It’s never too late to start planning or to revise your strategy. Whether you’re just beginning the accumulation phase, or you’ve gathered substantial savings, financial planning is a valuable step to making sure your retirement savings are in check. Here are key aspects to consider when making or revising your plan:
- Cash Flow: Identifying your spending habits now will help gauge your cash flow needs in retirement. Failing to have a clear picture of your bills and expenses can dramatically reduce your ability to meet your financial objectives. This additionally gives you a glimpse at how your spending may look during retirement.
- Risk Management: Analyze the types of insurance you carry to make sure they’re aligned with your overall needs. In many cases, insurance can also be used effectively as an alternative revenue stream and a hedge against inflation and riskier types of investments. Insurance, including life and long-term care, should be considered in your retirement strategy.
- Education Funding: The costs of education for children and grandchildren can be staggering and always on the rise. Arm yourself with current information about proactive educational savings vehicles that can help you plan your funding goals. Ensuring you don’t overspend on education and jeopardize your long-term savings is an important part of planning ahead.
- Retirement Income: Social Security benefits, employer-sponsored plans, investments, IRAs, and annuities typically combine to compose your retirement income. Deciding on the right mix for you can be a tough task, but your financial advisor can guide you to support your investment and tax strategies.
- Estate Planning: Establishing trusts, regularly reviewing your legal documents and beneficiary designations, and examining tax implications for survivors are vital to establishing a plan that provides you and your loved ones with greater confidence and security. Consider these important topics and their impact on your personal situation. They each play a role in preparing you for the ultimate goal: retirement.
Consider these important topics and their impact on your personal situation. They each play a role in preparing you for the ultimate goal: retirement. We are here to guide you during a complimentary consultation, so reach out to meet with a trusted LPL Financial Advisor.
Meet Elements Wealth Management
We're a diverse team of Financial Planners who share a common goal: to help you pursue your dreams.
- What services do you provide? Our LPL Financial Advisors start by looking at each client’s overall finances including savings for education, taxes, estate planning, and retirement contributions. Then they work to craft a personalized plan that makes sense for each individual and leads clients towards their goals.
- Who benefits from your services? Whether you’re getting started or you’re a seasoned investor, we’ve got the tools to assist you on your journey. We don’t have account minimums, so we are here to support all levels of investors.
- How do you charge? Our LPL Financial Advisors typically operate with one simple fee — based on the assets we manage on your behalf. They’re able to deliver financial planning and objective advice under this fee.
Our Advisors have more than 125 years of collective experience and are prepared to assist you with all your investment needs.