Have you ever wondered how long you might live to and while you're at it, how much you might need to live on in your so called "Golden Years"?
Consider this; a $400,000 payout might sound like a lot when you retire at 60 or 65 but how long, exactly, can it last? With life expectancies rising - a woman born today is expected to live past their 83rd birthday, while a man will not be that much further behind; ultimately you could be up for another 20 years where you'll need income to live the way you want to.
Back to the $400,000 figure, for it to last 20 years, you need to simply divide your initial $400,000 by 20 which give us a figure of $20,000 a year. So this means in the latter part of the 21st century, that’s the equation that will confront you. Hardly an amount that will enable you to live, let's say comfortably at all.
"But we’re living well into our eighties now" you say. The reality is that many of those approaching retirement over the next 10, 20 or even 30 years will not have anywhere near $400,000 in savings or in their super and when it's all said and done, $20,000 a year in today's terms is not nearly enough anyway.
The reality is that in today’s terms, the nest egg you need to accumulate is closer to $900,000 and approaching $1,500,000 to $2,000,000 over the next 20 to 30 years. It sounds an impossible task but, there are ways that are available to you.
So, where to from here?
Recognizing that you need to seriously think about your long term needs is the first priority.
Then figuring out an appropriate strategy based on your current circumstances and situation is the next priority.
Finally, seeking out expert advice on which course to take and not delaying the decision to do something when you are in a position to do so can go a long way towards alleviating your retirement savings concerns.