A client called me last month to ask how much income she should have to retire. She said she’d heard of the “80% rule,” which says you should aim to have retirement income that’s about 80% of what you’re making at your job.
Is this right?
At first glance, this makes sense. You won’t have a daily commute, so you’ll save on gas and car maintenance. You may save on eating out, and you won’t need to buy work clothes.
But Maybe Not
When you retire, all of a sudden, every day becomes a Saturday and Sunday. There is more time to do everything, and when I say everything, I mean it! You may want to travel, pursue hobbies, visit with friends and family, start on a long-overdue update to your house, and do all the things you have on a lengthy bucket list.
But wait! All of this adds up, and you may find yourself spending more like 120% of the income you used to have. Depleting your retirement savings at a fast pace can have a detrimental impact on your future retirement years. You might find you’ve run low on money and must go back to work.
Plan For What YOU Want
This is why planning ahead is extremely important. You want to have an advisor who is a fiduciary, meaning they will put your interests first. A friend who will help you make smart decisions based on what you want out of life.
We can help with this. Matt and I both hold the CERTIFIED FINANCIAL PLANNER™ certification. Give me a call at 402-991-3388.
Katerina Wiese, CFP®
America First Investment Advisors, LLC
This post expresses the views of the author as of the date of publication. America First Investment Advisors has no obligation to update the information in it. Be aware that past performance is no indication of future performance, and that wherever there is the potential for profit there is also the possibility of loss.