How to pay for your retirement

November 13, 2022

There are many practical benefits of planning your finances to save up for retirement (like, the tutorials on YouTube are seemingly endless). Though no one can prepare for emergencies, assessing and tracking your finances can help prepare for the unexpected, whether it be emergency rooms or a leaking air conditioner.

You may ask – how do I plan my finances?###

It’s helpful to visualize your financial timeline and create goals to be able to get your money to one day turn around and work for you. Here’s a step-by-step on how you can achieve this:

Step 1: Grab a pen, paper, or excel sheet

Step 2: Figure out what you spend your money on per month, and how much

Step 3: Calculate how much money you need to live (tip: you can add up the figures in Step 2)

Step 4: Identify at what age you’d ideally like to retire

Step 5: Calculate how much time you have to save until retirement (tip: it’s the age at which you want to retire minus how old you are today)

Step 6: Multiply the total amount of money that you need to live each year, by the total number of retirement years you expect to live (let’s say, the age at which you want to retire, all the way up to 100)

Step 7: Divide that amount by the number of years you have left to retire — this should tell you how much money you need to put aside per month (note though, that this doesn’t adjust for inflation — more on inflation in another post)

Step 8: If the amount of money you need to save per year is simply not possible (let’s say it’s more than what you’re earning), then you’re going to have to identify ways to grow your wealth (more on that also in another blog post – stay tuned!)

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