In my culture, parents and grandparents often hear their children wish them “May you live to 100 years old.”
Our generation now does experience that wish coming close to reality. In other words, it’s not rare to see someone lives in their 90s nowadays.
While it is a good thing to see our parents around when we are older, and our kids being with their grandparents, while growing up, not many of us are aware of the big price we have to pay to have such privilege!
That big price is called the cost of longevity!
Just imagine we all want to retire by the age of 60 or so, even though people say “60 is the new 40”, what income do we get to sustain the next 30 years or so of our life?
Now, let’s first talk about how much we need to retire. It is believed that to be able to retire comfortably, one needs to have at least 75% of his/her previous income.
Yeah, we will likely receive social security benefits, but that amount is barely enough to cover the minimum necessity. That’s not counting your mortgage since I already assume you pay it off already!
Plus, We also don’t want to do “just ok” when we retire! We will be putting in a lot of working hours by the time we get to the 60-year-old mark! Living just “ok” after that is not considered living :). We only live once, don’t we?
Furthermore, living a comfortable, enjoyable retirement life means eating out, exploring new hobbies & traveling the world very often. Who wants to cook everyday meals at 62 years old :)? So, that means our expenses actually go up, not down, Besides, older people do face big health issues that rise up the cost of living! Remember, we are not getting younger nor healthier!
Though we will have Medicare but there are many things that Medicare doesn’t cover; hence, there are Medicare supplements that health insurance companies are selling. For example, the cost of prescription drugs that are not covered by Medicare is huge for many people. There are so much medication to take for the many problems we have when we get older. How about long term care costs; how about disability costs? Did you read my other article about the data about disability: *Over 1 in 4 of today’s 20 year-olds will become disabled before they retire”? That is a scary truth, you guys!
So, Retirement planning is critical if you want to enjoy the second half of your life. Yes, that is a lot of time left after we retire. Yay! Just make sure we save up enough for that wonderful time of our life.
Let’s do a simple calculation together: let’s assume we need $50,000/year for a couple to have a somewhat OK retirement life. Deducting the $2000/month we can get from social security benefits, we still need another $2166/mo. to live. If you multiply this amount by 12 months & by 30 years. $2166 x 12 x 30 = $800,000 (approximately)! Who can confidently tell me that he or she can have that money aside for retirement by the year of 60?
So, let’s talk!
I can help you assess, calculate, and effectively address your retirement future. Time goes by fast, so do not delay this important process of life planning.
I await your call at 714-898-8992.