Retirement Savings Spreadsheet – One of the most difficult things to plan for retirement is how much you should have in savings for retirement. Keep reading and discover the best way to calculate how much you need.
One of the most difficult parts of the retirement plan is that the general rule around how much money you may need to retire tends to reflect your level of income. This represents a series of problems for those who try to plan their retirement.
Many financial experts say that between 70% and 85% of annual income should be replaced before retirement. For example, if you earn $ 100,000 per year, your goal should be to create savings for retirement between $ 70,000 to $ 85,000 per year. Unfortunately, this rule is not useful for people who are in the early stages of their career or for those who were in the middle and decided to make a career change. When you’re not sure what your pre-retirement income will be like, how is it possible to make projections as to the amount you need during your old age years?
On the other hand, basing your retirement projections on your income instead of your expenses might not be the best planning framework. If you spend most of what you earn and do not expect to change your spending habits during retirement, then you should create enough money to keep everything the same. This seems to be an unstable assumption; Some people spend more than they earn, while others spend significantly less than the amount they enter.
Retirement Savings Spreadsheet
So, what is the solution? First, focus on the allocation and not on the revenue. It is advisable to base your calculation for the retirement plan on your spending level instead of your income. This solves the two problems discussed above.
Now, it is also true that your retirement expenses will be different than your expenses today. In retirement, for example, you may not have a mortgage payment, your children will live on their own and the costs related to your work, such as transportation and work clothes will also dissipate. That said, you may have other expenses that you do not currently have; Medical and prescription expenses could be a bigger concern. You may also want to outsource the household chores you currently perform for yourself such as cleaning, some repairs, raking leaves or mowing the lawn. You can also travel more and use your retreat to explore the hobbies you could not pursue during your years of work.
All this leads to another dilemma, and that is that while income is not an adequate basis to determine the amount of money you should have in your retirement portfolio, expenses are not a perfect option either. However, the expenses can be the best point of reference for what you should aspire to save for retirement. If we accept the fact that some of the current expenses will be reduced, but others will grow, then it is relatively reasonable to say that the amount you currently spend could also be the amount you spend during your retirement years.
Use retirement calculators to make sure you have an idea of what you should save and do not pay too much attention to the yellow news headlines. You are playing a long-term game, and getting caught up in the turbulence of the daily market only slows your progress.
There are a lot of ways to build savings for retirement and have a retirement fund that allows you to live the life you want to live in your old age, you just have to play with the numbers to see what is best for you. So if a portfolio of a million is not the best for your future, find out what it is and adjust your lifestyle based on that.
Gallery of Retirement Savings Spreadsheet
In addition to the image above, you can see a gallery of Retirement Savings Spreadsheet below.
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