Make a retirement "wish list." Do you want to travel? Buy a vacation home? Your retirement goals will help determine how much money you'll need.
How much will you need? Your retirement expenses will probably be around 80% of your current expenses. Remember to factor in inflation--about 4% each year.
Estimate how much you will receive from other sources. For an estimate of your Social Security benefits, call the Social Security Administration at (800) 772-1213.
Figure out how much money you'll have to provide. For example, if Social Security and pension benefits will provide 40% of your retirement income, the other 60% must come from you.
Start closing the gap between your income and expenses. Here are some options:
- Cut expenses.
- Invest more money in your retirement plan (e.g., 401[k]).
- Take more risk with your investments.
For more retirement planning and investment advice, e-mail a Provident Financial Consultant* or call (650) 508-7222 or (800) 656-4096. Provident offers a full range of Investment and Retirement Planning services.