How much do you need to retire? The answer is, it depends…
How much do you wish to spend during retirement? What will you do? Will you travel? Play golf every day? Where will you live? Florida? Small college town?
How much you spend during retirement is probably the most important consideration when you’re determining how much you’ll need to save for retirement.
Example: I have two clients, Client A and Client B. Client A has saved $1,000,000 for retirement and expects to spend $75,000 per year, which includes traveling, playing golf and living in a state with a modest cost of living.
Client B has only saved $500,000 for retirement, but he lives in a small town with a low cost of living and only expects to spend $40,000 each year during retirement (no golf, little travel, but some frills, such as taking family out to eat often). Both Client A and Client B can expect to receive the same amount of Social Security benefits.
Who do you think will fare better during retirement, Client A or Client B? Check back soon for the answer…
Financial Advisors in Kansas City – Beacon Financial Advisors is a fee-only financial planning firm located in Lee’s Summit, serving the greater Kansas City area. Services provided include retirement planning, investment advice, tax planning and comprehensive financial planning.