In the United States, there is no exact figure for how much money a person needs in retirement. There are many different factors. These factors greatly change the final amount needed. If you are thinking about retiring soon and need to know the amount of money you need, pay attention to the details we are going to give you below. It is also important to know what your retirement benefit will be, for that there is a fantastic Social Security calculator that provides an approximation.
The main factor to consider in knowing how much money you need for retirement is knowing what money you will have in retirement. It’s no nonsense what we’re saying. If you know what your retirement payout will be, you will be able to know if you need to save more money for the future. Once you know an estimate of your Social Security payout, the rest is figuring out how much you can spend per month.
Expenses to consider in retirement
Once we know what our Social Security retirement benefit is, it’s time to look at what expenses we need to consider. These expenses are important for the most part, but some are expendable. Therefore, each case is personal and you may have different expenses. Here are the most important expenses in retirement:
- Food: Food is a very important factor. On a monthly basis, the money you spend on food will depend on your tastes. A good way to avoid spending a lot of money on food in retirement is to cook at home. If you want to eat at restaurants on a routine basis, you should have a good amount of money in the allowance.
- Shelter: This item may not matter for a very simple reason. If you have already paid for the house, this expense is $0. In case you have a rental house, you should also consider this expense as important.
- Clothing: It depends on your tastes, but clothing is also an element to consider. Remember to buy quality clothes so you don’t need to buy clothes every month. This way you will be able to save money in the long run during your retirement.
- Transportation: It doesn’t matter if we are talking about a car or public transportation. Going everywhere walking is impossible, for that reason you should also consider this expense in the monthly budget.
Other expenses that you should take into account during your retirement are the gifts you give to your family and friends. In addition to this, you should also add possible medical and insurance company expenses to the budget. Finally, if you like to travel, you will definitely want to add a travel section to your monthly budget.
By knowing all of these expenses, you can know whether or not your retirement money will be enough. If not, you should make a savings plan to help you make those days the best days possible. In any case, remember that you can maximize your Social Security payment if you have not yet started collecting your retirement.