If you are not planning for retirement now or started long ago, then you may not ever be able to retire.
You may not ever be able to save enough money in a retirement fund to live on it realistically.
Over 40% of retirees rely on Social Security benefits as a sole source of income.
Retirement should not be a goal – it should be a strategic plan for post-retirement living.
Do You Have Enough Money Saved?
The act of being retired is saving enough money in a retirement fund that will last you throughout the entirety of your retirement. The average American retires by age 63, but most people don’t consider how long they might live.
Yes, you should want to live a long and happy life. However, if you don’t calculate how much money you need to live out a comfortable retirement, it could run out while you are in your 70s or earlier.
You should calculate a unique retirement number with the help of a financial advisor. A retirement number is the amount of money you and a partner specifically need to live out retirement.
Remember – the typical human being lives until age 79. So, you should consider calculating a retirement number that lasts for a decade longer than that.
A Realistic Retirement Number
Another reason you may not want to retire is that you may not ever reach your retirement number.
Many people believe that $1 million is a magic retirement number to reach. It is a general rule for retirement numbers. Your retirement number will be specific.
And you must start saving for retirement as early as possible. If you just started saving for retirement recently and you are in your 50s, then you have a long way to go to reach $1 million.
To live a comfortable, working-class lifestyle in a moderate cost-of-living city, you may need an annual retirement income of $45,000. A yearly retirement income of $45,000 accrues to about $1 million after 20 years.
If you don’t continually reassess your retirement number, your retirement fund could run out in advanced age. 56% of Americans have never considered that they would need to reassess their retirement budget month-to-month.
Your Net Worth Becomes Stagnant
Let’s pretend that you have $1 million or $2 million saved for retirement. Well, unless you have additional or supplementary income coming in, then you will keep losing money for the rest of your life.
Do you have any investments? Do you own a business that brings an income? Are you a pensioner with a lifetime supplemental income?
Unless you have supplemental income coming in, your retirement nest egg could run out quickly. If you own a home and live in a high cost of living city like New York City or San Francisco, then $1 million might not last very long.
Looking for Work in Advanced Age
If you don’t have a solid retirement number and monthly budget plan, you won’t be prepared for emergencies.
Imagine your retirement fund running out at age 80 while considering looking for part-time work.
Consult a Financial Advisor
Retirement is a personal decision, and I can’t make it for you. I am not trying to do that either.
I can tell you that the post-pandemic economic world will become a new normal that will never resemble the pre-pandemic world ever again. The automation of jobs will be prevalent. Unemployment may rise again as industries readjust and open up.
And if anyone will have an advantage when it comes to securing work, it may be younger people.
If you don’t prep for retirement now and consult a financial advisor, retiring may become an impossible task because of the post-pandemic economic world.
Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.