Читать книгу Retirement Planning For Dummies - Matthew Krantz - Страница 24

IN THIS CHAPTER

Calculating your monthly and yearly run rates

Discovering the starting point for retirement planning

Finding the best ways to spend money

Using online tools and apps to monitor and measure spending

Finding easy ways to make more and waste less

You might be tempted to jump right into crafting your retirement plan. Wait a second! Let me explain why you need to complete another step first: figuring out your run rate.

Your run rate is how much you spend now. You need to understand how much money it takes to maintain your current standard of living before you can calculate how much you’ll need when you say goodbye to the 9-to-5.

Some other retirement books teach you to figure out what you want your retirement to look like and then figure out how to reach that number. This approach is frustrating. What if you want to retire off the coast of France, but that goal doesn’t match reality?

The biggest determinant of what you need and how much you can save is your current spending. And here’s the good news! This key factor is measurable and under your control, unlike many other aspects of retirement planning.

Are you thinking of hiring a financial planner to build your retirement plan? Calculating your run rate is still worthwhile. Any planner will need to know how much you’re spending each year to build a retirement scenario for you.

In this chapter, you examine your spending habits with the goal of figuring out how much money you need to live the way you want. This calculation is critical because it determines how much you need to save before you retire.