BOSTON (CBS) – Boomers as a group never saved like their parents and grandparents. Pension plans have largely disappeared from the private sector, and Medicare is a perennial target of budget cutters in Congress.
So what is a Boomer to do? Well most don’t have a clue as to how much money they will need to create a comfortable retirement. Most are not on track to save enough and one in five are banking on Social Security to be their main source of income.
Many experts believe you are going to need to have a $1 million dollars saved for a comfortable retirement. Most Boomers have not saved a $1 million and if you have you are golden. But the reality is that you can get by quite nicely on less.
Experts also say you’ll need between 70-80% of your current income in retirement. What I would suggest is to try and project how much income you will really need.
Start by reviewing your current expenses. The closer you are to retiring the more accurate this exercise will be. How much does it cost you annually to maintain your life style? How much are you saving for retirement?
Now add in any extra expenses you may anticipate in retirement such as traveling, hobbies, new cars and medical expenses. A Fidelity study has shown for a couple you may have close to $260,000 of out of pocket medical expenses in retirement.
Once you have a total in today’s dollars you will need to figure out what that number will look like in the future.
Your retirement plan provider at work probably has a calculator you can access on line and the one I use most often is at Choose to Save. AARP also has a retirement planning calculator and some good material on their website.
So often people get discouraged because after doing the calculations they realize that the dream of retiring early may be just that – a dream. So to make it a reality you may have to change your current life style to save more now or plan to work part time in retirement. Or both! Take the time to find out where you are in reaching your goal of a comfortable retirement.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.
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