Folks are always asking us, “How much will I need to retire?” And of course, the answer is, “It depends.” It depends on your needs, lifestyle and one more important factor. That other important piece of the retirement puzzle is, “How much are you willing and able to cut from your budget?” 
<ul><li>Experts will tell you that you’ll need at least 70% of your working income when you retire. Your transportation, clothing and dining out expenses will drop considerably when you’re no longer working.</li><li>Studies show the average retirement budget is only about 60% of working income. So, if you’re working and making $50,000 a year you’ll need 70% or $35,000 in retirement. But if you’re on track to generate only 60% of your working budget from Social Security and income generated by your investments you’ll be $5000 a year, short of your estimated living expenses.</li><li>This all means that you’ll have to work longer to generate more savings unless you’re able to cut your retirement expenses enough to close that gap or at least make it smaller.</li><li>One major way to do that is to downsize in your home. Downsizing should leave you with cash left over that you can convert into an income stream.</li><li>The next biggest way to cut your retirement budget is with transportation. If neither your or your spouse is working, do you really need two vehicles?</li><li>Another thing to consider is insurance, specifically, disability and life insurance. You may not need the same policies that you have been carrying.</li><li>Also, look at interest on a credit card balance or other consumer debt. It’s never good, but it is a lot worse when you’re retired and trying to adjust to a smaller income.</li><li>Finally, carefully go through your monthly bills to see what else you can cut.</li><li>One thing you may have plenty of in retirement is time, so consider giving more of it to your church or favorite ministry. Christians shouldn’t retire from something, but to something.</li></ul>Here are a few of questions we answered from our callers on today’s program:
<ul><li>My wife and I bought a new vehicle a couple years ago. We financed 12K on it. I was under the assumptions that we could pay off the vehicle early and not pay the interest, but apparently, I was wrong. Can you explain this?</li><li>I am 43 years old and am trying to think of the best ways to invest. Advice?</li><li>My kids are encouraging us to invest in the stock market. Can you offer some wisdom on this subject?</li><li>My husband just retired from the air force. We are trying to make sure that we have a good looking portfolio for retirement. Can you advise us on this?</li></ul>Ask your questions at (800) 525-7000 or email them to <a href="mailto:Questions@MoneyWise.org">Questions@MoneyWise.org</a>. Remember, you can call or email us 24/7. Visit us online at MoneyWise.org where you can listen to past programs, connect with a MoneyWise Coach, and download free resources like the MoneyWise app.
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FaithFi

Faith & Finance is a daily radio ministry hosted by Rob West. The program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

Faith & Finance with Rob West

How much will I need to retire?   It depends on your needs, lifestyle and one more important factor - How much are you willing and able to cut from your budget?

Downsizing for Retirement

FaithFi | Sep 11, 2021

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Where Faith Meets Finance

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