According to a study from the Associated Press-NORC Center for Public Affairs Research, many retirees are feeling pretty good about their savings. The study found that of current retirees, 38 percent reported feeling “confident” about the amount of post-work savings they’ve stashed away. It’s good to be confident about the state of your retirement savings. It’s better to be vigilant.
But as USA Today reports, a separate study from the World Economic Forum exposes the fault in being confident about retirement savings. The Forum survey that the average retiree will likely outlive their savings by eight to 10 years. That means no matter how confident you are with your savings, it’s probably not going to last.
Whatever amount you have saved for retirement, the key is to keep saving more. While that sounds like a vague direction, there are some factors you can analyze that will help clue you in on exactly how much you need to save. One important piece of information is how much you think you’re going to spend each year during retirement. Another is medical history. It’s hard to predict the future, but if you have a history of a chronic disease in your family, make sure you account for medical costs down the road. You’ll also want to consider how much your Social Security payments will be and how much of your spending in retirement it will cover. Finally, consider life expectancy. There are tools available online to help you get a good estimate on that number. Obviously the longer you think you’ll live, the more savings you need.
Once you have as much info on those factors as possible, use a retirement calculator to get a ballpark figure of how much money you’ll need to retire. Then, just to be on the safe side, save more than that.