The trouble with a magic retirement number is that it doesn’t give you a framework for deciding how to manage your finances in retirement. The “magic formula for retirement income security”Instead of focusing on a target savings amount, you should manage the magic formula for retirement income security: I > ETo translate, your income (“I”) needs to exceed your living expenses (“E”) for the rest of your life. But to the detriment of older workers and retirees, retirement planners often focus only on the income aspect of retirement, wanting to talk to you solely about how you can generate retirement income. Since most older Americans haven’t saved enough to continue their current standard of living in retirement, they’ll need strategies for managing both sides of the magic formula for retirement income security. Once you’ve got these financial basics down, you’ll also want to focus on other key financial decisions you’ll need to make as you transition into retirement.

Source: Forbes March 14, 2019 03:11 UTC