Home     About Us    Contact Us     Contribute     Privacy
Mutual Funds
Related Categories
Tip of the Day

Tip of the Day Play the IRA Game Smart

Play the IRA Game Smart - When planning for your retirement it is always wise to do it in the right order so that you have the plan with the...

read entire tip

Recently Added
Other Great Sites

Bridging the Savings Gap

Posted On: 2006-11-06
Length: 5:56

Listen to this podcast

Good outcomes in life require good planning. Think about it. When you spend time planning what to do this weekend, where to go on vacation next summer, or what to have for dinner tonight, the results are often far more successful. The same holds true for retirement. In this Fidelity Personal Finance podcast, we'll examine how to bridge the savings gap between your current assets and what you'll need for retirement. And we'll do this by following a simple formula. If you have a plan and an understanding of three key numbers, you can increase the chances you'll achieve the retirement you envision.

So does planning for retirement sound hard to you? Well then think of it this way. It can be easy, and even, dare we say, fun, to dream about how you'll keep doing what you love during your retirement years. The key is to plan now to make sure you'll have the financial means to support doing what you love later on. Another important step is to familiarize yourself with the key numbers by asking yourself these three questions: One. How much do I need to save? Two. Given my current savings rate, am I on track for retirement? And three. If not, how much more do I need to save? When it comes to retirement planning, consider this analogy. You are standing on a river bank, looking to the other side. The far shore represents the total amount of savings you'll need when you retire, or "your" number. The bank on which you stand is your situation today, given your current rate of savings, or where you stand today. You'll need a boat to make this river crossing. Let's call this bridging the savings gap. So let's see how you can arrive at your number. Estimating the amount of money you'll need for a secure retirement, your number, is a good place to start because it provides the basis for how much you should be saving today. With that in mind, there are two ways to think about your number. One way is to think about the total value of your nest egg at retirement. It's probably a large dollar amount, but don't worry. The figure reflects the sum total of how much you'll need in retirement, taking into account factors such as how long you might live and the performance of your investments. The lifestyle you choose to lead in retirement also will have a significant impact on determining how much you need to save. The other way is to consider your monthly income goal. Think of this as your monthly paycheck in retirement. It's the amount of money you will need to generate each month from your nest egg. Fidelity believes your monthly income goal should be approximately 85% of your pre-retirement income. This is based on a 2004 study conducted by AON Consulting, Georgia State University, which found that most people will need between 75 and 89% of their pre-retirement salary to meet their spending needs when they retire. And of course, depending on how much their salary was during their working years. Fidelity's planning tools use 85% to estimate your retirement income needs. That means if you're earning $5000 a month in the year before you retire, you'll need about...

Discuss It!

R Programming Project Help said:

Good short and this post helped me a great deal. Say thank you I looking for your truths.

Mechanical Engineering Capstone Project Writing Service said:

Thanks for sharing the info, keep up the good work going.... I really enjoyed exploring your site. good resource. 

custom essay paper writing said:

I appreciate this work amazing post for us I like it.

Electrical Project Help said:

From your blog, I can learn some new knowledge, I like the valuable information you provide in your articles.

Most Popular Articles
Most Popular Definitions
Daily Definition

Definition of the Day Moving Average

Definition: In technical analysis, this shows the average value of a company's stock price over a given period of time (50, 100, or 200 days). TeenAnalyst Advice: In technical analysis, investors usually look at the moving...

read entire definition




Home     About Us    Contact Us     Contribute     Sitemap


Copyright © 2009 TeenAnalyst.com