A rule of thumb in planning for retirement is that retirement income should replace 80 percent of preretirement income, according to U.S. News and World Reports. If planning an active retirement, the income should reflect an even greater percentage.Continue Reading
Before retiring, AARP recommends looking closely at savings, Social Security income and any income from pension plans. It is sometimes necessary to work a few more years to enjoy the retirement an individual has planned. Men who retire at age 65 have an average of another 17.7 years in retirement, while women have 20.3 years.
Retirement planning involves making room for the unexpected, according to CNN Money. While a person might use an online calculator that bases the plans on living to age 92, some people live to reach 100. If a person retires and suddenly faces a catastrophic disease, the cost of recovery often eats deeply into savings. Without adequate plans, poverty could fill the retirement years.
Retirement involves many major life changes. While many people enjoy the freedom of retirement, AARP recommends preparing for the downside of retirement. It sometimes involves events such as the devastating loss of a spouse. Parents and children often reverse roles, with children providing transportation to medical care and other services.Learn more about Financial Planning