Many people are blissfully unaware of the true cost of retirement. Individuals contemplating retirement need to take a variety of factors into consideration. These include:
- Inflation (remember, a dollar today is almost always worth more than that same dollar in the future);
- Whether they intend to retire at the same standard of living they enjoy while working, of if they are fine with getting by on a tighter budget;
- How their expenses will differ in the future from today (i.e., what will you need to pay for in the retirement that you do not need to pay for today);
- How they are going to fund their retirement; and
- Many more.
The folks at CNNmoney.com have put together an interesting article discussing some of the common mistakes that people make in planning for retirement. In addition, they have created this handy calculator to provide a rough estimate of how much money you will need to have saved to retire at your current household income level.
The calculator does not take pension benefits into consideration when calculating how much money one would need to save to retire. Consequently, individuals who have a vested right to a pension from the Teamsters Pension Trust Fund of Philadelphia and Vicinity should also take the amount of their monthly pension benefit into consideration when thinking about how much money they will need to save in order to have the retirement they want. Pension Fund participants can get an estimate of their monthly pension benefit and a wealth of other information in the secured member access section of the Pension Fund’s website by clicking here.We will address additional financial literacy and retirement planning topics on the blog in the coming weeks. Stay tuned.