9 Simple Steps To Answer The Question "how Much Money Do I Need To Retire"?

So, you're thinking about retirement but your not sure how much money you need, eh? What ever your retirement dreams are, traveling to places you've never been before, playing golf every day, sitting on a tropical beach, or just fixing up the house, the time for getting out of the rat race is closing quick! You need a retirement plan to make sure that your money will last.

Here are 9 simple steps to help you get there

1 Decide Where You Want To Live After You Retire.

Do you want to remain where you live now or do you want to move to another location? Say, a retirement village someplace in Florida. Once you have a picture in your mind of where you will spend your retirement years, you will have a framework of your financial needs.

2 What Do you Want To Be Able To Do In Retirement?

* Do you want to travel?
* Do you want to play golf every day?
* Do you want to stop cooking at home and eat at restaurants for most of your meals?

Write down all of the activities you want to be involved in and figure out how much it will cost on a yearly basis. i.e. an annual trip to the Bahamas, membership fees to the golf club, etc. Come up with an annual total and divide by 12 for a monthly expense. (________ = monthly total).

3 List Your Monthly Expenses.

* Housing - mortgage or rent payments, utilities. _______
* Activities expenses from #2 ________

Automobile expenses - Monthly payments, gas, insurance. (your situation will vary, but the average operating expenses for the car owner in the U.S. Is 17% of the annual household expenditures). Example: If you make $50,000.00 per year in wages, your car expenses could be as high as $8,500.00. As I said, this ill vary as to how many cars you own, how much you drive and what you drive. ________divided by 12= monthly total.

4 List Your Insurance Needs.

* Life ________=monthly cost
* Health ________
* Homeowners ________

As you approach retirement, it's wise to review with your insurance provider your policies because your needs be different than they are today. Example: Your children are grown and living on their own now, you may not need the same level of life insurance you did when they were still at home. Again, your needs are your own and only you can determine the proper level of coverage to carry. _______= monthly premiums.

5 Emergency Funds.

I don't have to tell you unexpected things happen. You need to be prepared for unplanned expenses. Again, your needs are different than anyone else, but a rule of thumb is you should have 3 to 6 months worth of expenses set aside in an emergency fund. This is money not to be touched except in cases of emergency. Add monthly totals from steps 2, 3, and 4 then multiply by 3 to 6 (your choice) for your emergency fund total. ________.

6 Income In Retirement.

* Saving ______
* Pension ______
* Social Security ______

This is where you need to talk to an expert who can sit down with you to explain your options. Depending on what age you plan to retire, your total distributions will differ.

7 Plan Your Estate.

If you don't have a will, get one! You don't want u Uncle Sam deciding what happens to your stuff after (well, you know)! This is another place that you would be wise to contact a local expert to discuss things like trusts, power of attorney, and investment plans so you and your beneficiaries are protected.

8 Now For The Totals.

Your expenses - add #2_____ + #3_____ + #4_____ +#5_____ = ______ monthly expenses.

Your Income _ #6 = ______ monthly income.

How you doing? Everything OK so far? (remember, these are just estimates. I'm sure they will change a little bit for various reasons). By now you're getting the picture of where you are and where you need to be.

9 If Things Don't Add Up And Your Expenses Are Larger Than Your Income, Now Is The Time To Do Something About It

There are only a few ways to make more money for retirement.

* Inherit a big pot of gold - if your like me that's probably not going to happen.
* Invest more of the money you DON'T have in the stock market and take the chance that everything will be just fine. Doesn't sound like a good plan to me.
* Get a second or third job - Hey, we're talking about retirement here. It's suppose to be about working less, not more!
* Rob the local bank - Don't Do This!!! I'm guessing that you have enough problems.
* Create a new income stream by starting you own Internet business. (That's the Ticket)! It's not as hard as you might think and for a small investment you could create enough wealth to properly fund your retirement. This might just be the answer you've been looking for.

So, how much do you need to retire? Go through the steps and you should at least have a good estimate. This isn't rocket science but it will take some time and planning. If you take to heart step #9, you may not have to ask "how much do I need to retire, but rather "what will I do today or where do I want to travel" now that your future is secure and you have all the money you need.

By: Gordon Zill

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Gordon Zill has worked in the eye care business for almost 40 years. A business that combines the demands of the health care industry with the ever changing retail fashion business. As a manager and marketing expert to the field, Gordon has a unique perspective on the particular needs of the Baby Boomer generation.At his website www.YourPathOnline.com, Boomers will find helpful tips on how to prepare for the next stage of life - RETIREMENT! Go to www.YourPathOnline.com for more details.