Leaving Your Retirement Up To Chance is Inadvisable
By Jay Sharifi
After decades of work, easing into retirement can be an exciting time.
But the luster can wear off quickly if there’s not a good retirement-income plan already in place when those weekly paychecks stop, especially if it becomes clear that retirement savings and Social Security aren’t enough to cover expenses.
“Some people retire with no income plan at all, but that’s like flying without GPS and still expecting to hit your target,” says Jay Sharifi, an investment advisor at Legacy Wealth Management (www.lwealthmanagement.com) and author of Building a Better Legacy: Retirement Planning for Your Lifetime and Beyond.
“Maybe they think since they’ve saved some money, they will be okay. But saving money for retirement and planning your retirement are two different things. When you fly, you want to know exactly where you’re going and how you will get there. The same is true when you’re planning your retirement.”
Sharifi says there’s plenty of territory to cover when trying to work out how you will pay monthly bills, handle unexpected emergencies, and hopefully have some money left over for a little fun. But perhaps a good place to start is to ask yourself these three questions:
How much money do you need? This can vary widely – and wildly – by the household. “The general rule of thumb is that retirees will require 70 to 80 percent of their pre-retirement income to maintain their lifestyle,” Sharifi says. So, if you had an annual income of $100,000 pre-retirement, you need to shoot for about $80,000 in retirement. Once you decide what that number is, the key becomes matching your income need with the correct investment strategies, options and tools to satisfy that need, he says.