You’ve made it to retirement or maybe you’re just counting down the days until you get to retire. You’ve got money put away, but now you’re wondering how long will your retirement savings last?
Our Retirement Calculator can certainly help, but here are a few questions to consider before you start plugging in the numbers.
One of the first things you’ll want to consider is your monthly spending habits. Take a look through the past few months of your bank statements and see where your money is going and how much you spend each month. Make a list of two types of expenses - one for essential expenses like utilities and insurance and one for non-essential expenses like a weekend trip to Las Vegas or a new pair of just-for-fun shoes. Then take a look at the amount you have in your retirement savings.
If you feel like your expenses outweigh your savings, then it’s time to start thinking about where you can cut back. Go back to your list of non-essential expenses and figure out what you can afford to live without. Maybe you need to start eating out less or take a few less trips each year.
Sources of Income
Another important factor in determining how long your retirement savings will last is your income. What sources of income will you have once you retire? You’ll get a Social Security check each month and maybe you’ll have some type of pension or other source of income. Write down your income sources and how much you’ll make with each one. This will help you determine how much of your retirement savings you’ll need to rely on.
Factors of your retirement savings account can also have a significant impact on how long your savings will last—everything from the rate of return to inflation. Certain retirement accounts like a 401(k) invest in the stock market.
Typically, the longer you leave your funds in a retirement savings account, the more it can grow. If past growth rates continue, the time you leave your savings alone can be more important than how much you save. However, the stock market is always fluctuating and you can’t predict exactly what will happen with the growth rate.
If you’re looking for a more predictable return, you might want to consider an Individual Retirement Account (IRA); which are available here at Partner Colorado. An IRA can hold stocks and mutual funds but also savings certificate funds which offer a predictable rate of return that aren’t as dependent on the stock market. Savings certificate funds can help you balance the market risk you have with stocks and mutual funds.
Now it’s Time to Calculate
Once you have all this information in hand, plug it in to our online Retirement Calculator to determine how long your retirement savings will last. It’s quick, easy…and free!
When preparing for your retirement, it’s important to keep these factors in mind. The more you’re prepared, the longer your retirement savings will last.