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| Benefits & Requirements |
| How much will it cost you to retire? |
The average American saves 3% of his income for retirement. Statistics indicate that most of us should be putting away at least three times that amount. Retirement planning is a challenge partly because there are so many variables to anticipate:
- How long will I live?
- Will my spouse outlive me?
- What will future inflation do to my nest egg?
You can help your employees take the first step towards retirement planning by providing a retirement savings program. Future annual expenses can be estimated using the following list provided by the U.S. Bureau of Labor Statistics:
Housing:
Most financial experts agree that the best advice here is not to retire until your home is paid off. A house payment would suck up over 25% of your available monthly funds, on average.
Transportation:
Will you need luxury or just comfort? People over 65 generally spend about $3,572 per year on car payments, gasoline, insurance and maintenance.
Clothing:. Hey, retirees can dress down every day! Plan for about $567 per year for clothes (22% less than what you spend now).
Health care:
This is one category you can plan on budgeting more for. The average retirement household spends $2,643 annually on medical care.
Food:
People over 65 generally spend about $3,388 a year on food.
Entertainment:
On average, entertainment expenses for retirees drop about 42 percent. Does this mean you'll only be having half as much fun after you retire as you're having now? Your ability to travel, fly to visit the grandkids, and generally wine and dine yourself depends entirely on how well you plan now.
(See "What Does it Take to Retire," Friendly Exchange.
Or visit the Farmer's Insurance website at www.farmersinsurance.com and take a look at their retirement calculator).
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