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The 4 Numbers Every Retiree Should Know

If you ask yourself these tough questions now, you'll make things easier on yourself down the road

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#1: What is a reasonable estimate of your cost of living?

CashRich185This should be obvious, but most Americans dramatically underestimate their living expenses. Be honest here, and thorough.

What do you pay in rent or in property taxes and insurance? What about utilities? And what medical expenses or insurance premiums not covered by Medicare? What do you spend in a given month on restaurant dining and entertainment?

Don’t just look at your past month’s expenses and multiply by 12, as your expenses can vary wildly based on weather (utility bills) or based on holidays and birthdays. If you like buying your grandkids expensive Christmas presents, make sure to take these into account.

Whatever total figure you come up with, tack on an additional 25%. No matter how thorough you are, I promise you that you forgot something. And you want a little wiggle room to allow for unexpected expenses or for the occasional off-budget luxury.

The total you come up with here is the single-most important figure; it’s the dollar amount you’ll need to generate from your portfolio investments and from Social Security.

Article printed from InvestorPlace Media,

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