If you’ve heard it once you’ve heard it a thousand times, ‘plan for retirement early.’ Though there is a lot of truth to this statement, there is a little more to it; which is precisely why we’re focusing on one big question today. How much do you really need to save to be prepared for retirement?
Consulting the CoRI Scale
Recently the Wall Street Journal reported that a comfortable retirement requires 70%-100% of your preretirement income. The article went on to point to the CoRI Index, a tool designed to help those ages 55-64 calculate exactly how much they will need when they reach retirement. An example of this is a woman at the age of 56. According to the CoRI Index she, if she hopes to have an income of $75,000 upon retirement, her investment portfolio will need to contain a minimum of $989,250 in assets. The Index is based upon a sliding scale which rises with age. The same women at age 62 will need to have 1,300,500 in assets to remain on track for retirement at age 65. The CoRI index also factors in an annual inflation rate of 2.5%.
Don’t Forget Healthcare Costs
In addition to the retirement savings outlined by the CoRI Scale, it’s also important to factor in the cost of healthcare. According to the society of actuaries, the average American couple at the age of 65 will need to a lump sum savings of $293,000 to cover future health insurance and out-of-pocket costs for healthcare.
If you find yourself overwhelmed when considering these numbers, you’re not alone. There are however many strategies to help you get there. At IntelliQuote we often encourage consumers to consider life insurance in the case of a gap in retirement savings. As we discussed in Term Life Insurance: Closing the Gap in Your Retirement Plan, many couples choose to purchase life insurance to cover the delta in their retirement goals and their actual retirement savings. In the event that one of the spouses passes away or becomes disabled, the surviving spouse will be taken care of.
If you, or a loved one, are nearing retirement and you’re feeling the pinch of a lacking retirement fund; life insurance may be able to help. If you would like to learn more, we encourage you to complete a life insurance quote comparison today. Simply complete our quote request form and receive a side-by-side life insurance quote comparison, from top rated carriers, immediately. With no obligation to buy, you have nothing to lose and so much to gain.
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