The Retirement Numbers Game

Also: Here's the Risky Move Many Investors Made Due to Fear of a Recession

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  No images? Click here August 29, 2023 There are two ways to look at retirement money. First, and adored by news outlets: headlines with $1 million. “Is $1 million enough to retire? These experts say no” … “Americans now think they’ll need $1.8 million to retire comfortably” … “Americans think they will need nearly $1.3 million to retire comfortably, study says.” But there’s another way to think about retirement numbers. How much will you spend, and over what period of time? Write down your regular expenses for a better idea of how much retirement can cost. Keep in mind that spending changes in retirement. You’ll spend less on work-related costs, such as commuting, clothes and contributions to a 401(k). In your working years, you’re also more likely to spend on things that make life easier — housecleaning, meals out — that you won’t have to pay for in retirement. On the other hand, vacations might become more expensive in retirement, because you’ll be able to travel for longer. Also, you can expect your health care costs to rise as retirement goes on, according to Vanguard. Medicare data shows that medical expenses more than double between the ages of 70 and 90. That’s just a fact of the cost of aging in the United States. With all this in mind, come up with a realistic list of monthly expenses. Multiply the amount by 12, and then by how many years you might be reasonably expected to live. Check out some actuarial life tables, which use statistical data to estimate mortality, for help. You can find other health calculators online or take a quiz offered by an annuity provider. These can’t pinpoint exactly how long your retirement will last, but they can give you a sense of how many years you’ll want to plan for. For more on the costs of retirement, read Money reporter Adam Hardy’s story. — Jill Cornfield, deputy editor P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue.

Retirement stat of the week: 12%

How long do 65-year-olds live, on average? If your answer is a shrug, longevity literacy is not your strong suit, says the TIAA Institute. Just 12% of U.S. adults understand longevity and how it impacts retirement planning. Why does this matter? The fact is, the more you understand about the average life span, the more thorough you’ll be about planning for your post-work years. Of those who demonstrate a higher level of longevity literacy: 50% have calculated how much they need to save 72% regularly save for retirement Of those with weaker literacy: 32% have calculated how much they need to save 58% regularly save for retirement

Retirement 1, 2, 3

A retirement planner shares the 18 biggest retirement mistakes. These tips can help single women, who often face greater financial challenges in retirement than men. Retirement planning is getting more complex. The last thing you want to do is delay crunching the numbers.

More Insights and Advice from Money

personal finance 9 States Now Plan to Ban Gas-Powered Car Sales The rules specify that only zero-emission vehicles can be sold, beginning with the 2035 model year. READ MORE Money; Getty Images

investing Here’s the Risky Move Many Investors Made Due to Fear of a Recession About half of investors say they bought or sold stocks as a panic reaction to last year’s doomsaying. READ MORE Money; Getty Images

credit cards 7 Best Balance Transfer Credit Cards Balance transfer credit cards can be an effective way to consolidate debt and reduce the interest you pay. READ MORE Money

retirement Will Social Security Benefits Really Get Slashed by 23% in the Next Decade? If the primary trust fund that bankrolls Social Security runs out of reserves by 2033, the average newly retired dual-income couple would see an immediate annual benefit reduction of $17,400. READ MORE Money; Getty Images

This newsletter is free because Money earns a commission when you click or make purchases from the links in this email and on our site. We also receive compensation for some of the products and services featured in this message. Offers may be subject to change without notice. Learn more about how we make money. Privacy Policy • Advertise With Us • We're Hiring! To stop receiving these emails, unsubscribe or manage your email preferences. Copyright ©2023 Money Group, LLC. All rights reserved. Metro Office Park Calle 1, Building 7 Suite 204, Guaynabo, Puerto Rico 00968, USA