Review: How much do you need to fund retirement? More than you think

Retirement is expensive. We know this.

Most people aren’t adequately prepared for retirement. We also know this.

And the situation just keeps getting worse. Medical science just keeps getting better, which means we’re living longer than ever (feels strange to call this a bad thing, but from a financial perspective it makes retirement more expensive), and a lot of people are counting on the markets to bail them out (which is a wildly risky – read probably bad – idea).

In this article, our own Wade Pfau – along with Michael Finke and David Blanchett – walk through the grim arithmetic of what people need to do to simply keep the same standard of living in retirement they had when they were working.

Depending on your situation, and what you are trying to do, well, some of the required savings rate will give most people pause.

This doesn’t mean you should live like a pauper and start looking into which brand of cat food tastes best. But it does mean you need to think carefully about what you want to get out of retirement, and start working toward it now.

The earlier you start preparing, the easier it will be to get where you want to go.

If you haven’t created a financial plan, take a look at our ebook How to Develop a Successful Financial Plan


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