Whether you’re approaching retirement age or simply want to plan ahead, there’s a lot that goes into retirement planning in Los Angeles, CA. You probably have a lot of questions that you want to be answered before you get too close to retiring. At Transformational Finances, we’ve put together answers to a few questions you might have asked yourself.
When can I retire?
The standard answer to this question is that you can retire when you have enough money saved to live off of 80 percent of your working income every year. So, if you make $100,000 a year pre-retirement, then you’ll want to have enough money saved to take $80,000 each year to live off of.
Understand that this amount is an estimate. The percentage of your pre-retirement income that you choose to live off of will be determined by where you live and what you want to do during retirement.
Where do I want to retire?
When it comes to retirement, it’s your time to do what you want to do and be where you want to be. You don’t have to stay where you are during retirement. If you want to uproot and move to a tropical climate or the mountains, that’s up to you. This should be part of your savings plan so that you can not only afford to move but also handle the cost of living in the area.
What do I want to do during retirement?
Have a plan that includes your retirement activities. Your savings will need to be substantially larger if your plans include globetrotting compared to if you want to spend Saturdays at soccer games with the grandkids. Budget according to your lifestyle plans and you’ll be able to live how you want.
When should I take Social Security?
You can start pulling from Social Security at age 62. However, keep in mind that this will greatly diminish the amount that you have over time and definitely won’t make it last as long.
Something else to keep in mind with Social Security is that it’s not a fund that you should be depending on greatly each month. Whenever you’re planning to start drawing your Social Security, treat it like a supplemental income each month. It’s extra money to take care of a few bills each month so that you can have more fun money or stretch your retirement savings that are already sufficient.
Should I have my house paid off before I retire?
Having your house paid off before retirement isn’t much, but it’s highly recommended. By not making a house payment during retirement, you will save yourself hundreds to thousands of dollars each month. For example, if you’re still making a mortgage payment of $1,350 each month into retirement, that will cost you $81,000 over just five years. That’s a significant chunk of change when you’re not bringing in regular income anymore. If you’re not on track to have your house paid off before retirement, we can help you put together a plan to get the job done.
Will I need to supplement my retirement fund?
It’s getting to be more and more common for seniors to supplement their savings during retirement. Whether they’re working part-time at a grocery store, renting out a room, or making money off of hobbies, they’re finding ways to continue to bring in money every month so that they don’t have to rely solely on a retirement fund. A financial advisor will help you decide if this is something that will need to do or if it can be used to help fund your trip to Hawaii.
Get answers with Transformational Finances
Get in touch with the experts at Transformational Finances today to get answers regarding retirement planning in Los Angeles, CA. Our team of experts can provide you with the necessary advice you need to look ahead and get your finances prepared for retirement. Give us a call at 310-407-2824 or send us a message via our contact form. We look forward to working with you.