Retirement Planning With Annuities

You know the value of preparing for your retirement, but where do you start? It should be one of your first measures to predict how much money you would need to finance your retirement. That’s not as easy as it sounds, because arranging for retirement is not an exact science. Have a look at directory for more info on this. Your particular needs depend on your priorities and several other variables. Many financial experts say that to fund your retirement, you’ll need about 70 percent of your current annual salary. This may be a fantastic starting point, but is that figure going to work for you? It depends on how close to retirement you are. That number probably won’t be a reasonable approximation of your income needs if you’re young and retirement is still several years away. That’s because, between now and the time you retire, a lot will change. The difference between your present needs and your future needs can narrow as you approach retirement. But note, even though retirement is just around the corner, use your established income only as a general guideline. You’ll have to take some extra steps to correctly determine your retirement income requirements. During retirement, your annual income should be enough (or more than enough) to cover your retirement expenses. That’s why it is a big piece of the retirement planning puzzle to estimate those expenses. But, particularly if retirement is still far away, you can have a hard time defining all of your expenditures and predicting how much you will spend in each region. Here are some typical retirement expenses to help you get started:

Health and apparel

Housing: rent or mortgage payments, land taxes , insurance for renters, house maintenance and repairs

Services: gasoline, electricity , water, internet, cable TV,

Transportation: charges for vehicles, automobile insurance, electricity, repairs and maintenance, public transportation

Health, dental, life, disability, long-term care Insurance:

Expenses in health care not protected by insurance: deductibles, co-payments, prescription medications

Taxes: tax on federal and state sales, tax on capital gains

Debts: Personal loans, corporate loans, payments via credit card

Education: Educational costs for children or grandchildren

Gifts: Personal and voluntary

Savings and investments: IRAs, annuities, and other savings funds contributions

Recreation: tourism, eating out, hobbies, outdoor activities

Care for yourself, your parents, or others: costs for a nursing home, home health care assistant, or other way of living with assistance

Miscellaneous: private hygiene, cats, membership of the club

Don’t forget that, over time , the cost of living will rise. The average annual inflation rate has been about 2.5 percent for the past 20 years. (Source: Data released annually by the U.S. Consumer Price Index (CPI-U) Department of Labor, 2013.) And bear in mind that from year to year, your retirement expenses can change. For example, early in retirement, you can pay off your home mortgage or your children’s education. As you age, other expenses can increase, such as health care and insurance. Build a safe buffer on your estimates to defend against these variables (it’s always best to be conservative). Finally , to make sure they are as reliable and practical as possible, have a financial professional assist you with your calculations.

You can’t actually predict how much annual income you need to assess your overall retirement needs. You will need to predict how long you will have to retire. About why? The longer your retirement, the more money you’ll need to support it for years. The period of your retirement will partially depend on when you intend to retire. Usually, this significant decision revolves around your personal interests and financial condition. You can see yourself retiring at 50 to get the most out of your retirement, for instance. Maybe it would be made possible by a booming stock market or a generous early retirement plan. It’s important to note that retiring at 50 would end up costing you a lot more than retiring at 65, even though it’s nice to have the freedom to choose when you’re going to retire.