After the past year’s economic slump, it’s safe to say that most of our retirement accounts are not what they used to be. So how do you know if the stock market crash has derailed your retirement or not? Of course, the first step in the process is knowing how much money you’ll need for those future days on the golf course. Personal finance blog Wise Bread says we all have two main options for determining our retirement numbers, namely:
1. Use online retirement planners and calculators.
2. Try a quick and easy retirement savings formula.
It’s not a choice of one option over the other — it’s probably best to use both these methods. Try several calculators as well as a simple formula. This will give you a variety of outputs since different calculators make different assumptions. From those choices you can make a judgment of which retirement number works best for you.
Now that you have your retirement goal, go back to one or more of those financial calculators and put in your various assumptions (including current retirement funds as well as future planned savings) to see if you’re on track to make the retirement number by your target date. And if you happen to find yourself lagging a bit after 12 months of a rocky stock market, Get Rich Slowly lists seven options for boosting your retirement savings including:
1. Save More
2. Spend Less in Retirement
3. Retire Later
4. Work in Retirement
5. Tap Home Equity
6. Change Your Expiration Date
7. A Mixture of the Factors
Even after all this, setting a retirement number and gauging your success at hitting it is rather difficult because there are so many variables to consider. As such, Get Rich Slowly suggests running your numbers once a year using updated account balances, savings rates, and benefits projections.
Whew! All this work just to determine whether or not we can retire some day makes us want to…retire now!!!