Posted by How much money do you need to prepare for retirement in the United States?
Everyone will ask this question: "How much money do I need to save to retire in the US?"How much money you need to save for retirement varies from person to person, but there are some conventional calculation methods that can be used for theoretical reference.
The simplest statement is,Save up to $100 million and you can retire relatively comfortably.
And some industry consultantsUse the 80% rule.Specifically, if we now earn $10 per year, we will need $8 per year after retirement, and then continue for 20 years.The overall calculation is that you need to save an asset that can stably generate $160 million after retirement.
In life, some people believe that the savings of most people who want to retire or retire early are not enough to reach the figures based on these calculations.What you really should do is adjust your lifestyle and do what you can.
But no matter how we think about it, one of the most important principles of planning for retirement is -The sooner the better, time is the greatest wealth and wealth accelerator.
4 aspects of retirement planning
Making a retirement plan for yourself can be simple or very complicated.We usually consider the financial situation after retirement from the following four perspectives.
Real estate planning
For most Americans, the house is the largest asset held by the family.So how do we put this asset into our retirement plan?
In traditional concepts, the house is considered an asset.However, after experiencing the market situation of the collapse of real estate prices at the retirement age, planning experts have begun to consider the asset value of real estate at retirement more conservatively.
With the increasing popularity of mortgage loans and home equity loans, many people who own real estate continue to retire without reducing their debts and reaching the baseline of safe retirement. Instead, they are carrying more mid- to long-term debt.
When we are going to retire, another issue that needs to be considered is,Do you want to sell the house or change the house??If we are still raising our children and live with them in a real estate, we may need a larger house, and the cost of a larger house will also increase.
Estate planning
The purpose of estate planning is to give an account of our property.The most common and practical way is to leave a will.
If the estate is large, we can set up a trust or use some effective strategies to avoid estate tax legally and reasonably.In 2020, of the total assets left by individuals, the first $1158 million will not be subject to inheritance tax. If this part is exceeded, we can useLife insurance claims, Or use some strategies of lending to the beneficiary’s children to avoid it.
The problem of paying taxes
When we choose to retire and start to take money from various retirement accounts or various retirement assets,Whether to pay tax or not, how much tax to pay becomes a big question.
Most retirement accounts are treated in accordance with the conventional personal income tax method.This means that if we take money out of a traditional 401(K) or IRA personal retirement account,May pay 37% tax.
Therefore, whether the accounts used by individuals or families for retirement planning can be withdrawn in a "tax-saving" way in the future is the first issue to be considered.
According to existing regulations, Roth IRA accounts, or Roth 401(k) accounts, treasury bonds and municipal bonds representing fixed income, and cash value life insurance accounts have the above advantages.
If we agree that as we grow older, we will earn more, or if we think that taxes will continue to rise in the future, then it is reasonable to choose the above types of accounts for retirement planning.
保险
After retirement, an important financial plan is how to protect our assets.
As we age, medical and health-related expenses will rise, and then we have to face a "complex and expensive" medical and health system.
Many retirees feel that the traditional medical insurance provided by the government is not enough to provide adequate protection. Many people start to choose MA insurance and Medigap insurance to supplement the government's medical insurance.
At this stage, life insurance andLong-term care insurance, Which can maximize the financial protection of the family and assets.
Another insurance product issued by an insurance company is calledAnnuity insurance.This type of insurance is very similar to the old pension.We first deposit the money to the insurance company, and then the insurance company sends the money to us at a fixed monthly amount.There are many types of annuity insurance, we need to understandWhich type of annuityIt's right for you.
Article summary
"How much money do I need to save to retire in the US?"There is no standard answer to this question. But we have a set of general planning calculation methods. The article also explains the options and points of retirement planning from four aspects.
In addition, the US government and commercial companies have also built a very sound retirement product and retirement service market, and have provided a lot of products and solutions for each individual and family to choose.
In the final analysis, the sooner we realize the role of individual families, the government, and the market on retirement issues, the sooner we start saving and investing for retirement, and ultimately, with the help of time, the more beneficial it will be to achieving the financial goals of the retirement plan.
