How Do We Calculate The Need For Retirement?
To calculate the need for retirement we need to think about what standard of living we currently have and what our needs will be at retirement age. For this we can make a plan in 4 steps to make it easier to carry it out.
Estimation of costs / expenses at retirement age
First of all, we need to think about what we want the retirement period to look like for us. Where will we live, if we will stay in the current home or if we want to move, what activities will we carry out, if we will travel or not, if we will want to dedicate more time to hobbies or if we will take care of raising and educating grandchildren . This means that we must set clear and measurable goals for the retirement period.
Another important aspect is the age at which we want to retire. Even if the public pension system imposes a minimum age at which we can retire, if we want to do this earlier we must see how we can achieve this.
Depending on the image we have of the retirement period, we can make some estimates of the financial needs we will have at that time. When we have reached an approximate amount, monthly or annual we can begin to think about how we will manage to accumulate that amount.
When making our calculations we must keep in mind that in general during retirement we will need about 80% of the value of the last salary in order to maintain our standard of living and at the same time we must be prepared to increase health spending. That is why it is good to inform ourselves and to consider different types of insurance that are more advantageous if we do it when we are young, such as life or health insurance.
Estimated guaranteed income at retirement age
How do we know the amount we can rely on from the state? For this there are some online computers, but we need to know what salary we had during the whole active period in order to be able to make an approximate calculation. Currently, the legislation is constantly changing and the pension point according to which pensions are calculated in the same way, which means that it is very difficult to approximate the amount of money we will receive from the state to the pension. One thing is for sure, if we are not a special case, it will not cover 80% of the value of the last salary, which means that it will have to be supplemented from other sources.