The Best Way to Figure Out How Much to Save for Retirement | Ep. 214

• Tiffany introduces the popular question of how much to save for retirement and explains that instead of giving a direct answer, she'll provide key factors to consider since it depends on individual circumstances.

• Consider what age you plan to retire and ensure savings will last through life expectancy. If retiring at 65 with average life expectancy of 90, plan for 25 years of retirement income needs.

If you plan to retire at 65, and let's say the average life expectancy is like 90, you have to make sure that your money lasts between 65 and 90 as far as your retirement planning.

• Determine what your retirement lifestyle will look like - whether you'll be traveling and active or taking a more relaxed approach - and calculate the annual income needed to support that lifestyle.

Are you going to be one of the people that wants to go, go, go, go, go? So you traveling everywhere, going places that you haven't been before? Or are you the type of person where you're going to be like, well, retirement's here. Now it's time for me to chill.

• Identify all sources of retirement income including pensions, annuities, and Social Security. Visit ssa.gov to create an account and see projected Social Security benefits based on your earnings history.

find out how much social security benefits you'll be eligible for when you retire, you can go to ssa. gov and you can create an account and log in and they can actually tell you approximately how much you would get in retirement.

• Assess how much investment risk you can handle based on your time until retirement. Longer time horizons allow for more risk since market volatility has less long-term impact.

• Consider whether you'll continue working part-time after retirement. This additional income can reduce the total amount you need to have saved.

a lot of people, even though they can't afford to retire, they're like, I really don't want to stop working. So they pick up part-time jobs. And there's nothing wrong with that.

• Evaluate your retirement account types (traditional 401k/IRA vs Roth) and consider tax deferral strategies like backdoor Roth conversions to optimize your tax situation in retirement.

• Budget for healthcare costs beyond Medicare coverage and consider expensive long-term care needs. Healthcare costs typically increase with age as health declines.

long-term care is... Very, very expensive. Even if you in the crappiest of nursing homes, it's expensive.

• Tiffany offers to help calculate retirement needs and recommends consulting a financial advisor if you prefer not to manage investments yourself.