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How
much will you need in Retirement …
What
you can expect from Social Security
In 1950 it was 16.5 workers to 1 retiree. Today the ratio is about
3 to 1. And, as you can see from the graphic below, by the year
2030 there will only be 2 workers for each Social Security recipient.
The Ratio of Workers Paying to Support Social Security Recipients
The major question is …
How much will you need in retirement?…
Experts suggest you will need approximately 65 - 85% of your current
income to maintain your present lifestyle in retirement. If you
want to increase your standard of living in retirement, you may
even need 100%.
While some expenses in retirement may drop such as job-related expenses
and paying superannuation and other taxes, other expenses may either
stay the same - or increase.
Your basic living expenses typically stay the same as you will still
need transportation, food to eat, telephone, utilities and maintenance
around the home. On the other hand, health care costs and medical
expenses often increase.
In retirement, your income needs will change …
In planning for your retirement income needs, it is important to
know that your expenses will vary in retirement.
- In the initial years, expenses often increase. Being healthy
and active you may likely spend money doing the things you have
time to do.
- In the middle years, expenses may drop as your years become
less active, tending to stay closer to home.
- Income needs in the later years are often determined by the
need for medical and nursing costs.
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