How Much is Enough?

Let’s start by asking the question - Where did you get your concept of retirement?

Retirement has become the major future event that most of us are anticipating and striving for, but did you ever slow down to answer – Why retire? What will you do? At what age will you retire, 65? Why not 60 or 70, or later? These questions will help you begin to answer just how much you need to retire. Also, remember sometimes retirement is not of your our own choosing, so begin planning and answering some of these questions well before you get there.

One of the most important questions is, “how much is enough?”-  Just how much do you need to live out the remainder of your life without worry? How do you accumulate enough? And how should you invest your retirement savings?

Answering the question of how much is enough depends on a number of variables, factors, and assumptions - none of which we can have absolute certainty on.

First – Retirement expenses; determine the lifestyle you believe God would have you retire to and the annual expenses of that lifestyle. Don’t forget to account for the effects of inflation. Not sure where to start – What is the cost of your current lifestyle?

Second – Retirement length; just how many years will you live in retirement? With modern medicine, your life expectancy may be longer than realize.

Third – Retirement income sources; how much you will receive from social security, pensions and how much you’ll need from your retirement savings/investments.

Fourth – Retirement returns; based on how you plan to invest your retirement assets, what type of returns are you likely to earn?

There are several web-based estimation tools available that can give you a rough idea on the above and how much you will need. However, they all lack interpretation of the potential outcomes, leaving that to you, the user.  We recommend you consider seeking the guidance of a trusted advisor, one who can help guide you through the impact of inflation, variable costs, investment returns, and sequencing risk. One that will help you navigate the complexities of planning for and transitioning into retirement.

As you tackle how much is enough for retirement, keep in mind that “enough” is unique to you and based on the unique circumstance God has led you to.