Your wealth
How much money do you need for retirement?

Rules of thumb can bankrupt you. You may have heard or read that you will need 70% of your current income after your retire to maintain your standard of living. If that’s what you’re basing your nest-egg calculations on, you might want to rethink it. While 70% may cover costs for some retirees, others will spend even more when they retire than they presently do.

The true number depends greatly on your current situation and future plans. After you stop working, do you intend to travel, work part time, play golf every day? Will you buy a second home, sell your existing home, live in a motor home? Your answers will change your financial requirements.

Rather than rely on a rule of thumb, revisit your retirement plan every year or two to make sure the assumptions on which you based your calculations are still valid. Whether you use a financial planner or tackle this exercise on your own, the better you can define your future wants and needs, the more prepared you will be when you’re ready to retire.

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