2nd Mistake: Underestimating How Much They Will Need Saved To Retire
The same Natixis study found that baby boomers believe they need $1 million in order to live their dream retirement. Now, that may sound like a very comfortable figure, if not a little bit gargantuan but remember, these are your life savings which are supposed to see you through several years if not decades of retirement!
With that being said, is $1 million even enough? Think about it this way, if you think you’re going to live for another 20 years after you retire, that’s a lot of time with a limited income, right? Some of your expenses may go down, but others might skyrocket, especially in the medical department.
But beyond utilities and medical expenses, you have to also consider ‘fun’ money. After all, you probably don’t want to spend the rest of your life in front of the TV, so it’s important to have some cash set aside for activities, especially traveling.
What You Should Start Doing Now
So just to be sure, go over the numbers again. How much do you think you’ll spend on bills considering the lifestyle you’re used to. How much money should you ideally set aside for medical purposes and other emergencies which could happen at any moment? Here, we’re talking about things completely out of your control such as a fire or a flood.
Just because other baby boomers say they’re going for the $1 million mark you shouldn’t follow their lead. $1 million may sound cushy, but don’t allow it to dictate your savings plan unless you’ve reached this figure by chance through careful consideration.
