How much should you really be saving for the retirement future you envision?

Making sure you have enough money saved for retirement is one of the top concerns for those of us not independently wealthy. In a perfect world, we will figure out how much we need to live on by calculating our monthly and yearly retirement expenses, factoring in inflation, and computing any additional income like Social Security.

Founded over 25 years ago by John Creekmur, CFP^® Creekmur Wealth Advisors is a full-service financial planning firm. Our primary purpose is to help provide goal-based financial planning to our clients. We strive to partner with our clients to maximize their finances in pursuit of their goals and dreams.

When did you first notice that something unprecedented was occurring with the Covid-19 virus?

I currently live in Washington D.C. and up until last week there were no noticeable differences in day to day life. However, I recognized the unusual nature of this situation last week when I headed down to Trader Joe’s to stock up on groceries for the next few weeks. Millennial that I am, I thought that if I got to Trader Joe’s 5 minutes before the doors opened at 8:00 AM that I would have the place to myself – I couldn’t have been more wrong.

The 24-Hour News Cycle moves from Impeachment to COVID-19 to the Primaries – What’s next?

In recent weeks, we’ve seen several major stories in the news. On the political front, in addition to the arrival of the presidential election through the 2020 caucuses and primaries, we have just experienced the third presidential impeachment in American history. In international news, the latest coronavirus outbreak has hit China, now referred to as COVID-19, leading to closed borders and heightened screening at hospitals worldwide.¹

It’s not so much the facts of what’s going on that are unusual – none of these matters are unprecedented – but the way that they are reported in the media can be alarming. Even frightening.

What do you do with big money?

Getting rich quick can be liberating, but it can also be frustrating. Sudden wealth can help you address retirement saving or college funding anxieties, and it may also allow you to live and work on your terms. On the other hand, you’ll pay more taxes, attract more attention, and maybe even contend with jealousy or envy. You may also deal with grief or stress, as a lump sum may be linked to a death, a divorce, or a pension payout decision.

Why are they made again and again?

Much is out there about the classic financial mistakes that plague start-ups, family businesses, corporations, and charities. Aside from these blunders, some classic financial missteps plague retirees.   

Calling them “mistakes” may be a bit harsh, as not all of them represent errors in judgment. Yet whether they result from ignorance or fate, we need to be aware of them as we plan for and enter retirement.        

Leaving work too early. As Social Security benefits rise about 8% for every year you delay receiving them, waiting a few years to apply for benefits can position you for higher retirement income. Filing for your monthly benefits before you reach Social Security’s Full Retirement Age (FRA) can mean comparatively smaller monthly payments. Meanwhile, if you can delay claiming Social Security, that positions you for more significant monthly benefits.¹       

Some specifics about the "second act."

Does your vision of retirement align with the facts? Here are some noteworthy financial and lifestyle facts about life after 50 that might surprise you. 

Up to 85% of a retiree’s Social Security income can be taxed. Some retirees are taken aback when they discover this. In addition to the Internal Revenue Service, 13 states currently levy taxes on some or all Social Security retirement benefits: Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. (West Virginia, incidentally, is phasing out such taxation.)¹

Here is what you need to know.

Financially, many of us associate April with taxes – but we should also associate April with important IRA deadlines.

Some things to consider.

During your accumulation years, you may have categorized your risk as “conservative,” “moderate,” or “aggressive,” and that guided how your portfolio was built. Maybe you concerned yourself with finding the “best-performing funds,” even though you knew past performance does not guarantee future results.

What occurs with many retirees is a change in mindset – it’s less about finding the “best-performing fund” and more about consistent performance. It may be less about a risk continuum – that stretches from conservative to aggressive – and more about balancing the objectives of maximizing your income and sustaining it for a lifetime.

How healthy a retirement do you think you will have? If you can stay activeas a seniorand curb or avoid certain habits, you could potentially reduceonetype of retirement expense.

Each year, Fidelity Investments presents an analysisof retiree health care costs. In 2019, Fidelity projected that the average 65-year-old couple would spend around $285,000 on health care during retirement, including about $11,000 in the first year. Both projections took Medicare benefits into account.^1,2