Retirement Income Goals

Retirement may seem a long way down the road to you, or maybe you feel like it’s just around the corner. Whatever your current age and financial situation, retirement experts say it is never too soon to start preparing for and thinking about the years ahead.

Growing Number of Retirement Years
Americans are gradually living longer. When Social Security benefits were first paid in 1940, a 65-year old lived, on average, about 12½ more years. A 65-year-old today could expect to live about 17½ more years. By 2070, life expectancy at age 65 is projected to be an additional 20½ years, according to research by the Social Security Administration.¹ Without proper planning, outliving your savings is a real possibility.

Set Your Retirement Goals
Most people spend less after retirement, given that work-related expenses decrease and tax rates and housing costs may be lower. Retirement experts recommend that you will need about 60-80 percent of your pre-retirement income to maintain your lifestyle in retirement. However, you may need more than that, especially if you plan to retire early and pursue a more active lifestyle in the first years of retirement. Whether you plan on traveling the world, participating in voluntary church or humanitarian service, or pursuing various hobbies and interests, figure out how much you think you are going to need in the most active years of your retirement (probably the first ten years), and then look at the next 20 years and beyond. It is also important to consider any potential long-term care needs that may arise, such as nursing home and adult day care.

Studies have shown that less than a third of all Americans have an actual dollar figure in mind for their retirement nest egg, and only a small percentage of that group has an actual strategy for reaching their goals.²

¹Social Security Administration Communications to Congress, Testimony of Commissioner Kenneth Apfel, February 23, 1999.
²Jeff Maggioncalda, President & CEO, financialengines.com, January 2001.