Instead of wondering, “Am I saving enough?” or “How much should I save?” you can use several online calculators to estimate how much you will need to pursue a comfortable retirement and stress-free aging process.
These tools are free and easy to use, making them incredible resources for anyone to navigate their retirement years. They provide answers regarding retirement plans and valuable tips on how to have a comfortable post-retirement life on a budget while safeguarding long-term financial goals.
One of these is the American Association of Retired Persons (AARP) retirement calculator.
In this article, we will walk you through how to use the AARP retirement calculator and gain extra tips to help you achieve a smooth retirement.
Retirement Planning Made Easy with AARP Retirement Calculator
The Importance of Retirement Planning
Retirement planning involves financial strategies to prepare a steady stream of income to support a person’s lifestyle after leaving the workforce. Setting up separate retirement accounts, putting aside a portion of your income toward retirement, or investing in a diverse mix of stocks and bonds are some examples of retirement planning.
These financial measures, when appropriately applied, give seniors adequate financial resources (or even additional income) to cover life necessities, achieve specific financial goals, stay prepared for emergencies, or serve whatever purposes arising throughout their post-retirement lives.
A report revealed that more than half of Americans would retire with only $10,000 in their account. This emphasizes the significance of retirement planning even more, considering that prolonged life expectancy comes with more upkeep and financial responsibilities down the road to ensure healthy aging.
Why do you need a retirement plan? Here are the top reasons why you should plan for your retirement.
- You can maintain your financial independence.
- You can enjoy healthy aging and stress-free retirement.
- You can keep up with the rising costs due to inflation.
- You can avoid financial hardships associated with medical emergencies.
- You can avoid any future financial obstacles.
- You won’t have to rely on social benefits or pensions.
- You can adapt to changeable or unpredictable circumstances.
How to Use the AARP Retirement Calculator
Striking for the perfect balance between spending and retirement savings can be daunting. But having rainy day savings in hand is still better than nothing. It prevents financial disasters and gives you more confidence while navigating your golden years, knowing that you won’t become a burden for anyone — as discussed above.
In addition to covering day-to-day essentials, extra savings are an effective tool to check off your bucket lists and try out new things.
Several helpful financial tools help answer the most crucial questions before retirement: How much money do I need for retirement? One of these is the retirement calculator of the American Association of Retired Persons (AARP).
The tool provides a personalized overview of a person’s financial future alongside handy information and resources for Social Security benefits, healthcare, and financial planning.
- Step 1: Gather the necessary information about your financial conditions before getting started.
- Step 2: Go to the AARP retirement calculator here.
- Step 3: Answer a series of basic questions about your marital status, health status, age, annual income, current savings, investments, other sources of income, Social Security, lifestyle, retirement goals, and retirement age. All these questions are crucial for delivering the final assessment and suggesting possible investment strategies.
- Step 4: Fill in your estimated monthly expenses after retirement, including healthcare, housing, groceries, utilities, and transportation.
- Step 5: After completing a series of questions, the AARP retirement calculator will return a rough estimate of how much you need to save to achieve an independent, hassle-free lifestyle.
- Step 6: Feel free to start over if not applicable to your expectations. Make changes as needed in saving rates, retirement age, and other factors until it works in your favor.
Since the AARP retirement calculator can’t replace a financial advisor with years of experience and knowledge, consider seeking assistance from professionals to have them cater recommendations and financial advice to your personal needs. If you have concerns or questions about retirement and related issues, get in touch with a financial advisor or retirement planner for precise, sufficient financial advice and strategies.
Retirement Planning Checklists: Tips & Steps to Consider
According to financial and retirement experts, a person will need at least 80% of their pre-retirement annual income to live comfortably after retiring.
Let’s say your annual income is $80,000; you will need at least $64,000 a year to lead your post-retirement life without touching other assets. Planning for retirement as early as possible before leaving the workforce is critical to ensure you are ahead of the curve.
Keep in mind that each person’s life circumstances are distinct, accompanied by many factors that may come into play when calculating retirement savings. The estimated number may increase or decrease depending on your needs, lifestyle, and income.
Feel free to splurge on retirement services and consultation if you need more clarification about how much you should save for a smooth retirement. A professional will work closely with you to develop the right plan, know the best answers, and suggest appropriate strategies for your unique needs.
Follow our lists of tips and things to consider when planning for retirement, so you can better prepare yourself and make your transition more manageable.
- Be Vocal: Retirement planning requires a lot of decision-making and meticulous research, not to mention adaptable changes needed over time to keep your plan aligned with your financial situation, investments, and regulatory requirements. Since it can be a long, complicated process, don’t hesitate to ask for professional advice. Using financial advisors the right way can help a lot with your planning, giving you useful information and more confidence to reach your goals.
- Be Realistic: When it comes to planning for retirement, keep in mind that “slow and steady wins the race.” One step at a time helps you develop good financial practices through small and consistent adjustments and avoid costly mistakes that could sabotage your long-term plan and benefits.
- Save The Date: When is the best time to start planning? Right now! Planning for retirement is best done at a young age, when you start working. At the very least two years before leaving the workforce to give you enough time to devise a retirement plan that works for you. Don’t forget to pick a retirement date as well. Committing yourself to a specific day to stop working keeps your plan on the right track.
- Determine Retirement Expenses & Needs: Before retiring, sit down and jot down a list of needs and expenses to expect throughout retirement years. Compare the list with your pre-retirement lifestyle. Since retirement plans are not one-size-fits-all and your essential needs may differ significantly from your peers, decide how you want to retire as soon as possible. Be sure to manage your income by creating a list of income sources. Don’t forget about taxes and other tax-reduction social benefits.
- Pay Down Debt: The process of heading into a stress-free retirement life won’t be as smooth if you still have lingering debts. So you’ll want to pay down your debts, mortgages, credit cards, or cars before leaving the workforce, if at all possible.
- Sign Up for Healthcare Plans: A secure retirement will only become a reality with adequate healthcare plans. These plans protect you from the financial burdens associated with astronomical healthcare costs in the U.S. You are automatically eligible for the Medicare program if you retire at or after 65. If you still have years before turning 65, shopping around for private health plans to have extra protection and prevent coverage lapse while waiting to enroll in federal-sponsored healthcare programs is best.
If you have questions about how to use the AARP retirement calculator or any topics discussed here, connect with us and learn more.
At 12 Oaks, our team of caring professionals is dedicated to keeping residents safe, engaged, and connected to their families and friends while leading fulfilling lives. 12 Oaks senior living communities are an ideal place to enjoy the encore season of life.
For questions or to schedule a personalized tour, don’t hesitate to contact us.
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