When it comes to financial planning, there are many “rule of thumbs” to follow. Rule of thumbs are merely guidelines and do not apply to everyone. Sometimes rule of thumbs are just wrong. One rule of thumb is you should strive to have 80% of your current income in retirement. However, you should dig deeper and look at your particular situation. Look at what portion of your income is being used toward your lifestyle expenses (shopping, eating out, hobbies, etc.) That should be used as a baseline of what income you will need in retirement. If you are using a significant amount of income toward debt, you are not using that income for lifestyle expenses. Strive to be debt free going into retirement and this will free up cash flow. Get out of the red and back in the black!
When it comes to financial planning, there are many “rule of thumbs” to follow. Rule of thumbs are merely guidelines and do not apply to everyone. Sometimes rule of thumbs are just wrong. One rule of thumb is you should strive to have 80% of your current income in retirement. However, you should dig deeper and look at your particular situation. Look at what portion of your income is being used toward your lifestyle expenses (shopping, eating out, hobbies, etc.) That should be used as a baseline of what income you will need in retirement. If you are using a significant amount of income toward debt, you are not using that income for lifestyle expenses. Strive to be debt free going into retirement and this will free up cash flow. Get out of the red and back in the black!
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