How Much Do I Need to Retire?

When it comes to retirement, there’s a new reality.

We all know the dream — to live out our golden years in comfort and with stability. We work hard for a particular lifestyle, and we want to maintain that lifestyle into retirement. However, planning for retirement is no easy task. In fact, for many people, it’s overwhelming and confusing.

“Show me the money!”

When it comes to retirement planning, most people start with one fundamental question — how much do I need to save to retire well? With all information and misinformation on retirement planning available, it’s difficult to know how to devise a plan that works for you and your family.

If you work hard throughout your career, it shouldn’t be hard to retire. A comfortable and financially stable retirement is something you deserve. You don’t want to spend decades preparing for retirement, and then realize that you don’t have the cash-flow to live out your golden years in comfort. You don’t want to sacrifice and save, only to find out that in retirement terms, you’re broke!

Yes, retirement is changing.

Even though retirement planning has always been complicated, 21st-century retirement comes with unique challenges. Our parents’ retirement planning strategy no longer works.

Firstly, people are living longer than ever before, which means that we need to plan for a retirement that may last 20, even 30 years.

It’s pretty great news when you think about it. Modern medicine and scientific research have given us the tools to live longer, healthier, and more active lives. As a healthier, more energetic person, you’ll need the funds to support a more active retirement.

You might have a more enjoyable retirement than your parents. However, preparing for retirement will be far more complicated than what our predecessors had to do.

R.I.P. work pension plans.

Today’s workforce has fewer pension savings options. Over the last three decades, 401Ks have replaced most work-based pension plans. Individuals are now more responsible and more liable when it comes to planning for their financial future. For Boomers, Gen Xers and all who come after, a good retirement will result from savvy saving, sage investments, and strategic tax planning.

That’s no small feat.

Even for successful professionals, like CRNAs, retirement planning is time-consuming and difficult. There are so many variables to consider, and there are no simple solutions.

That’s why you need to work with someone who’s studied those variables; someone who understands how to create a sound retirement strategy, customized to your needs and goals.

When you’re looking for financial guidance, search out someone who understands your professional situation. The right financial advisor will analyze your current economic circumstances and help you prepare for the future. You’ll benefit from working with someone who’s done the research, crunched the numbers and who knows how to create a plan that works for you.

What’s a reliable retirement formula?

Any good plan will identify the amount of annual income you need to save to maintain your lifestyle and enjoy the type of retirement you want.

Here’s a rule of thumb:

  • Identify your desired annual income in retirement
  • Divide that by the percentage of the money you will need to draw out of savings, annually, during retirement.

The average percentage drawn is generally between 3.2 and 4 percent, and possibly more taking into consideration the impact of taxes.

Here’s an example of how that calculation works:

Let’s say you want to have an annual retirement income of 100K a year. Then you would calculate:

100,000 4% = 2,500,000

In this scenario, you will need to save 2.5 million by the time you wish to retire. To be clear, this is a very GENERAL strategy, which will give you a very GENERAL range for retirement.

That’s why it’s essential to consult with a Financial Advisor who will assess your particular needs and devise a customized plan suited to your situation.

Once you’ve done this, you can then create a saving plan that incorporates the right investment strategy, based on a “tax-smart” approach.

However, the right investment strategy is only half of your retirement planning game plan.

Don’t forget — retirement isn’t tax-free.

The second pillar of a good plan is asset protection. That comes down to the right kind of tax planning. Having 2.5 million dollars in the bank does not necessarily mean you’ll have 2.5 million dollars to spend in retirement. You will owe taxes as you liquidate and use your retirement assets, which will have significant repercussions for your cash flow and lifestyle.

As the folks at S.M.A.R.T. Retirement show, the key to savvy retirement is to develop a tax and spending strategy to protect your assets. If you include taxation into your retirement plan, then you can identify your net spendable retirement income, which will give you a clearer picture of what money you’ll need to retire.

“I am more concerned with the return of my money than the return on my money” – Will Rogers.

When you incorporate the realities of taxation into your plan, then your desired retirement savings may change. It’s essential to focus the same amount of effort on preserving and protecting your assets as you do on growing those assets.

There’s a new retirement paradigm.

While most people assume that a million dollars will keep them stable and comfortable in their later years, the reality is far more complicated and nebulous.

Whether you have retirement savings or are just beginning to think about that future, it’s best to get an objective assessment of an experienced advisor.

As a Nurse Anesthetist, you have a specific career trajectory and particular retirement goals. Working with an advisor who’s familiar with your profession, your lifestyle, and all of its challenges and successes gives you a distinct edge when it comes to planning for the retirement stage of your life.

You help people so get people to help you.

As a Nurse Anesthetist, you serve others, working to make sure that people are safe and healthy. Work with an experienced financial advisor and build a great retirement plan as you build a great career. Enjoy a comfortable retirement. Make your golden years some of the best years of your life.

Don’t let a lack of preparation lead to financial ruin in the final stages of your great journey.
Build a solid, tax-savvy retirement game plan and get ready for living your golden years on your terms.

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