“How do I retire?” This question haunts many investors wondering how to finance retirement, protect their savings and make it to retirement without going crazy with worry.
Thankfully, figuring out how to retire and how to finance retirement is easier than ever before thanks to a host of online tools and investment resources. With just a few clicks of your mouse and simple math, you can find out a clear path and take some of the guesswork out of how to retire.
For starters, begin with the “ballpark” retirement calculator from the Employee Benefit Research Institute, a public policy group dedicated to retirement how-to instruction and helping Americans decide how to finance their lifestyles after leaving the work force.
There are just a few easy steps in this calculator’s retirement how-to guide. To find out how to retire, you’ll need to enter:
- Current age and salary.
- Planned retirement age and percentage of current income you want to receive upon retiring.
- Expected age of death — a morbid but necessary metric to finance retiring accurately.
- Annual inflation assumption (should be at least 2% for your plans on how to retire) and wage growth from now until retirement. To be conservative, simply track inflation.
- Rate of investment return both before and after retirement. To be conservative, cut your returns in half after the fact to account for lower-risk strategies.
- Pension benefits that count toward retirement, if any.
- Part-time pay or other income expected at retirement. To be conservative, input zero.
- All savings you currently have put toward retirement, including 401(k) funds to finance retirement.
- Expected Social Security benefits (it’s easy to find if you don’t know, just go to this calculator from the Social Security Administration).
It’s just that easy to find your answer to the question “How do I retire?”
Of course, your plans for how to finance retirement might not go as expected, but you can always check back in a year or two down the road to see how you are doing. All these steps take about five to 10 minutes, so you can do it as soon as your ideas about how to retire or your real-life savings change.
The question of “How do I retire?” doesn’t have any easy answers. But at least these tools offer a clear direction to those wondering how to retire and can offer easy updates on how to finance your retirement dreams.