How Do You Know If You Have Enough Money To Retire?

This a great question. A Common question. A question that keeps people up at night.

And, I’d like to rephrase it to…….

“Will your Social Security or Pension be enough to pay all your bills during retirement, OR will you need more income than that?”

 

If Social Security or Pension are enough, then you don’t really have much to worry about. You could have ZERO in savings, IRA’s, 401k’s and still live very comfortably all through retirement because your basic income needs are met.

However, for most people, Social Security won’t be enough, and they will need extra income from their IRA’s and 401k to help pay the bills.

So isn’t CONSISTENT INCOME really what matters?

Monthly Income. Cash flow.

If you know for certain that you have enough coming in every month, without fail, then many other problems seem to take care of themselves.

  • Budgeting becomes easier
  • Less anxiety about running out of money paying bills
  • The ups and downs of your mutual funds or stocks won’t stress you out as much
  • You’ll sleep better too

If your expenses are $5,000 a month and your income is $3,000 a month, then you have a shortage of $2,000 a month.

This is called the INCOME GAP.

For retirement, it’s really important that you solve for that INCOME GAP with as much certainty and guarantees as you can get.

You don’t want your base retirement income that you need to pay your expenses, to be dependent on the ups and downs of mutual funds, bond funds, interest rates or the stock market.

You want to be sure that no matter what happens in the economy, or in the market, that you keep getting your base retirement income, month after month and year after year, without fail.

Then……once you know you have your income needs met with as much certainty as possible, you can invest the rest of your money however you want.

It a pretty simple concept. It will also reduce your anxiety about running out of money. I promise.

If you’d like to chat about where you are at right now, or need some ideas to point you in the right direction, just give me a call or you can click on this contact form and ask me anything you want. I will do my best to reply within 24 hours.

 

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