When do you want to retire?
Retiring at 60 is very different from retiring at 65.
If you retire at 65, you’ll:
- Have more money saved
- Have earned greater returns on your investments
- Postpone the headache of dealing with inflation
- Distribute your savings over a shorter period of time
- Take advantage of all retirement benefits that are offered by the government
On the other hand, retiring at 60 might be the right choice for you. Don’t forget, it’s all about being prepared!
What will you do in retirement?
So what are the big retirement plans? Do you want to explore Southeast Asia or open up an Italian restaurant? Your retirement dreams will determine how much you need to save, and what your savings strategy should be.
Trying to imagine what your retirement will look like by using the 70%-of-your-salary rule isn’t always that simple. Will you maintain the same lifestyle? Do you tend to overspend, or more importantly, do you see yourself indulging during your well-earned retirement. Where’s a crystal ball when you need one?! The good news is that there are other approaches to determining your lifestyle during retirement.
Figuring out the kind of life you want at retirement will help you develop the right savings plan. Are you a homebody or a handyman? Do you enjoy being active outdoors or do you prefer city living? Asking yourself the right questions now will help you down the road.
How much will you need at retirement?
Experts say that aiming for 70% of your final salary will ensure your quality of life when you retire. But this rule of thumb might be difficult to apply to all situations. Maybe you won’t need as much, or you might need a lot more. It all depends on your current lifestyle and the one you hope to have when you retire. Here are two websites that can help you plan your retirement and see if your goals are realistic.