Are You Ready to Retire?

If you have planned for your retirement, follow the plan religiously and constantly reviewing and adjusting it from time to time, chances are you are ready for your retirement when the time for you to retire arrives.

If you have not, then you have some work cut out for you to do before you're ready to retire the life you desire, which obviously is a lifestyle better than or at least equal to your pre-retirement years. If you are from this group you should revisit and reassess your financial situation while taking into consideration the time left before you are due to retire. This means you have to take stock of your current assets (including savings from your 401(k), pensions, social security etc.) and investments and from there determine the amount you have to save monthly until you are due to retire. This will be your projected nest egg, from which you can derive your income in the future while in retirement by withdrawing a fix amount every month for the next 30 years or so. And experts recommend that you withdraw not more than 4% from your nest egg each year for you to last the stipulated time.

As a rule of thumb you'll need between 70% and 80% of your pre-retirement income to live the same lifestyle post retirement. And this is the same amount that you must be able to withdraw from your projected nest egg every month which you have already determined earlier. If you're not meeting this then the shortfall is the amount that you'll have to find ways to fill in as additional income. And if you're still unsure how to work out the figures do not worry as any basic retirement calculator will be able to do the job for you. A retirement calculator will make your job easier in calculating your retirement target under various financial scenarios and is a very useful tool to have. You can get your free retirement calculator NOW!

In my next post I'll share with you the various options available for you to fill in the gap between what you need for your retirement years and what you're able to provide currently.

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