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Overview: Retirement Planning Continued Determine Your Retirement Lifestyle and Income Goal Most experts suggest that for every year in retirement, you’ll need at least 80% of your last working year’s salary to maintain your lifestyle during retirement. A recent survey conducted by leading market researcher Mathew Greenwald & Associates indicated that many retirees are finding they need at least 95% to 105% of their pre-retirement income.* The key objective is to maintain the same lifestyle that you enjoyed before retirement and to determine what you want your lifestyle to be like when you get to retirement. This is the fun part of retirement planning -- imagining what you are actually going to do when you retire. Think about what you might want to do on a daily or weekly basis (play golf or tennis, go fishing, work in the garden) and then think about an activity that you might want to do at least once a year (travel to Europe or Hawaii). Now, estimate what you think these activities will cost. Note that if you are planning five or more years into the future, add 15% to 25% more to today’s costs for the same activities in the future. By envisioning what your retirement will look like, you are beginning to determine what your income goals are. In addition to the recreational activities, you also need to plan for expenses such as mortgage payments, insurance premiums and healthcare costs. * Source: Investment News, October 2004. < BACK NEXT > #40131