How much do you have saved for retirement? Do you think it's enough? Odds are, it's not. The average American has two years savings for retirement, but the average retirement lasts 18 years. How do you fill the gap? I spoke with Andy Smith, a Certified Financial Planner and host of Investing Sense to help me sort through all this.
“What do you want to accomplish...what do you see your life being like when you finally stop working?”
Can you answer that question? Smith says most can't. You have to sit down and think about this. Set goals, concrete ones. Most people estimate they'll spend around $50,000 on health care costs over the course of their retirement. Boy, are they in for a rude awakening. According to this Bloomberg article, the average retiree will spend $130,000 on healthcare costs alone.
In addition to figuring out how you want to live once you're retired, you need to figure when you're going to retire. Obviously, that'll depend on your specific situation. Smith says some are ready to retire by 50; others work into their 70s or 80s. Regardless of when you do decide to retire, you need to maximize what you have saved up, what benefits you have access to, and how you use it all.
“How to get the most out of Social Security. How to pay for health care. How to make budgets. How to live within your means all the way up to and through retirement. So that once you get to retirement, you can get the retirement that you want and not the one that you're stuck with.”
Again, we're back to planning. A little foresight can go a long way. You don't want to be like most Americans.
“50% of Americans rely 100% on Social Security for their retirement income.”
That's a staggering number, and the maximum amount a single person can get from Social Security is about $31,000 a year. Make sure you plan, folks.
Listen to the full interview with Andy Smith HERE.