Many people are uncertain about their financial future as they start to prepare for their retirement years and ask the question, "Will I outlive my retirement money?".
So I chuckle a bit when I see headlines that say, "Here's how much money Americans think they need to retire comfortably."1
$1.9 million is the number, according to a nationwide survey of 1,000 employed 401(k) participants by a well-known financial services company. In 2019, the same study reported the number was $1.7 million. But this year's pandemic increased the total by $200,000.2
Is $1.9 million a realistic figure for retirement? It's hard to say. The survey didn't ask participants how they arrived at that figure or what information they used to draw that conclusion.
Determining how much money you need in retirement is a process. It shouldn't be a number that you pull out of thin air.
The process should include looking at your current financial situation and developing an approach based on your goals, time horizon, and risk tolerance. The process should take into consideration all your potential sources of retirement income, and also may project what your income would look like each year in retirement.
A significant figure like $1.9 million does little good if you're uncertain what it means. I can help develop a retirement strategy and show you investment ideas as you pursue your goal.
1. FoxBusiness.com, August 4, 2020
2. Pressroom.aboutshwab.com, August 4, 2020
Investing involves risk, and the return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Past performance does not guarantee future results.
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