The primary reason that people engage an estate planning attorney or financial planner is to ensure they have enough money for their retirement. So how do you know how much is enough?
To get a realistic picture of what your retirement expenses will likely be, you should do the following:
Calculate your current expenses. If you currently operate with a good household budget, this should be simple. To get a quick snapshot, consult your latest tax return. Take your after-tax income, deduct your savings and charitable contributions and the total will generally tell you what your cost of living is now.
Subtract the expense you will no longer have in retirement. Perhaps your mortgage will be paid off by the time you retire. Subtract any child-related expenses, expenses associated with a job (clothing, commute costs, etc.), entertainment and leisure expenses (don’t forget you’ll have those senior discounts!) and any other expense you think you’ll leave behind once you retire.
Add expenses you may have in retirement. Your healthcare expenses may be more. You may decide you want to spend more to travel. Or you may have children or grandchildren that need financial assistance.
Once you’ve done this exercise, your next step should be to engage some professional help to develop a comprehensive retirement plan.
The Flanigan Law Group provides Southern California residents with personal attention for estate planning, administration and litigation legal services. When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources. Contact the Flanigan Law Group at 949-450-0041.