"Do You Have Enough to Retire?"
By Susan Pinto Keen, CPA. of Pigg, Krahl, Stern & Co., P.A.

Let’s say you are 60 years old and have close to a million dollars in your retirement account. Is that going to be enough? A few decades ago, there was no question that this would have been plenty, but these days it might be a bit tougher.

Of course, how far your retirement account will go depends on how long you will live, as well as how much you need to live on each year. Experts say you should be able to live on somewhere between 75% - 80% of your pre-retirement income and still maintain the same standard of living you had prior to retirement.

The biggest changes in your expenses that you will see once you retire are no work-related expenses, no social security taxes and no mortgage payment (assuming this is paid off by retirement). In addition, with this reduction in your income, you may end up being in a lower tax bracket, so you would have reduced Federal and State income taxes as well. However, you will probably have increased health care, health insurance, and travel costs, which will offset some of these other savings.

Another factor in whether you will have enough to retire is whether you plan to try to leave any of your retirement account for your heirs. If so, this would take a chunk out of what you would have available to draw from on an annual or monthly basis.

Finally, inflation will definitely play a role in whether you have enough in your account to live on. If your earnings on your retirement account don’t keep up with inflation each year, then you will need even more annual income to keep the same standard of living.

There are many factors to consider when looking at whether you do actually have enough saved to retire. You need to be sure you have the correct investment philosophy for you. The idea is that when you stop working, your portfolio can’t.

Please give us a call at PKS Financial Planning, LLC and we can help make your money work for you.

MAGGIE.S MEMO:
Susan Pinto Keen, a Certified Public Accountant with PIGG, KRAHL, STERN & CO., P.A., has 17 years of accounting, audit, tax and business consulting experience. PIGG, KRAHL, STERN, & CO., P.A., with offices in Salisbury and Ocean City, helps businesses succeed. Let them help you.

MAGGIE SAYS:
Susan Keens clients unhesitatingly recommend Susan for her expertise and pleasant personality. Call PKS at 410-546-5600 and ask for Susan Keen.