8 Retirement Facts That Will Keep You Up At Night

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Retirement reality check is the topic of today.  Today we will look at eight charts that will impact your retirement and your retirement planning right now.

savings rate

Fact: In 2014 only 44% of individuals had tried to calculate how much money they would need for retirement.  Do you know how much you will need for your retirement?

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If you are a man at 65 years old today you have a 78% chance of living another 10 years while women have an 85% chance.  Basically, you should plan on living at least 90 years old or even longer.  The question is your retirement account growing at the needed level to reach your goals?

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Compounding is the key.  A person who invests $5000 annually between 25 and 65 could accumulate more than $1 million for their retirement.  If you started later, you will need to save more to reach your goals.  When did you start saving?

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The average spending for 65-74 year old individual is $44,897 per year.  So by the time you retire, don’t forget to account for inflation and especially the cost of your healthcare, will you have enough saved up?

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One of the most overlooked retirement costs (it’ll-never-happen-to-me syndrome) may also be one of the most expensive. JPMorgan finds that the cost of a private room nursing care facility for one year can vary from $80,000 to over $120,000, depending on where you live.  Plus you will still have other costs to cover in your retirement.

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Since we don’t have an idea where social security will be when we retire, some individuals don’t even include this in their retirement planning calculations.

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Warren Buffett once explained how investors should view cash. He said:

“The one thing I will tell you is the worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time. But good businesses are going to become worth more over time. And you don’t want to pay too much for them so you have to have some discipline about what you pay. But the thing to do is find a good business and stick with it. We always keep enough cash around so I feel very comfortable and don’t worry about sleeping at night. But it’s not because I like cash as an investment. Cash is a bad investment over time. But you always want to have enough so that nobody else can determine your future essentially.”

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Even if you rightly time the market and avoid the worst days, you are then left with the agonizing decision of when to get back into the market. You need to know yourself and your limitations when investing. Six of the 10 best days during the stated time period occurred within two weeks of the 10 worst days.

So if timing the market is so hard to do especially with the volatility in today’s market, and you are looking for a different place to invest, then take a look at this alternative investment outside the market that pays returns monthly to your retirement account.  Take a look at this innovative investment now.