ElderLaw News — The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News

ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President.

Projecting the Amount of Savings and Income You Will Need in Retirement

Many people commonly assume that the annual income needed to enjoy a comfortable retirement will be approximately 70% to 80% of their annual income during their final working years.

Determining the lump sum amount or a specific income amount that will ensure a comfortable and secure retirement can be a challenging exercise, especially with so many unpredictable expenses and life events that need to be taken into consideration. If you are within five to ten years of retirement, then you should think in terms of probability ‒ such as achieving a 70% to 90% probability of having enough money to last during your retirement.

Start by envisioning your life in retirement. For example, do you plan to travel frequently? Begin or pursue a hobby? What are your thoughts about leaving money to your children or grandchildren? Are you and your spouse or partner in good health? The list of variables goes on, but here are some key points that you should think hard about:

-- Housing costs: Is your mortgage paid off? Have you considered downsizing? Can you afford to sell your home in a depressed housing market?

-- Healthcare: If you are retiring before the age of 65 years and therefore not yet eligible for Medicare, then have you considered the necessity and cost of health insurance?

-- Long-term care costs: These costs may be catastrophic to your financial nest egg if you do not have insurance protection and you or a spouse needs extended in-home care or nursing home care.

-- Current and future household expenses: These expenses can be a myriad of items from utilities, insurance, real estate taxes, replacing a roof, buying a car, etc. Keep in mind that these expenses will change from year to year.

-- Aging parents or boomerang children: You may need to care for and possibly take on their financial responsibilities.

Once you have a picture of how you envision your retirement, you should consider your various sources of income, pensions, savings, Social Security, earnings from real estate, etc, from which you expect to create your retirement paycheck. The timing of your retirement can also be a factor, such as retiring in a down market and the impact of a poor economy affecting the value of your portfolio. Another consideration is inflation. At the historical average of 3% annual inflation, a given sum of money will lose half of its purchasing power in 23 years.

Retirement income planning is something that requires time and talent. Maybe you have that skill or it may be to your advantage to seek professional advice from someone who can guide you through the process.


If you are interested in having an Elder Law attorney from The Estate Planning & Elder Law Firm, P.C. speak at an event, then please call us at:

Maryland (301) 214-2229
Virginia (703) 243-3200
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The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

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This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Hook Law Center for their input to this newsletter.

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