Calculate Contributions Needed to
Accumulate the Retirement Goal
At this stage of the retirement plan, we can determine the annual savings needed to build the future savings goal. The table below shows the approximate annual savings needed to accumulate specific amounts over various periods at various assumed rates of return. Our client Ted is going to need to set aside $23,000 to $32,000 a year to fund his retirement as he currently envisions it. If that’s not possible, he may have to alter his current retirement goals. For instance, he may have to delay his planned retirement date or cut back on his income objective.
The Retirement Plan as a Motivator
For many people, the numbers produced by an initial retirement needs plan are surprising, to say the least. But these numbers may be precisely the motivation needed to put the plan into place and start doing what is necessary. To meet the challenge of saving for retirement, we offer the following advice:
For many people, the numbers produced by an initial retirement needs plan are surprising, to say the least. But these numbers may be precisely the motivation needed to put the plan into place and start doing what is necessary. To meet the challenge of saving for retirement, we offer the following advice:
- Don’t delay. Start now and save consistently.
- To the extent possible, direct retirement savings into tax-advantaged plans and accounts.
- Within the tax-advantaged plans, diversify investments across various financial vehicles:
- stocks, bonds, mutual funds, money markets, certificates of deposit and life insurance.
