The Expense of a Lifetime
Statistics show that 81% of Americans have little to no idea how much money they’ll need to retire. This is a problem because if you don’t know how much retirement will cost, you can’t possibly know whether you’re saving enough to fund the retirement you’ve dreamed of.
Retirement is by far, the most expensive purchase you’ll ever make. So how much does an average retirement cost? Of course, everyone is different but according to a recent Age Wave/ML Report, that magic number is over $738,000.
To put that in perspective, the average cost of raising a child to the age of 18 is $245,300 and the average cost of a 4-year college education at a state university runs approximately $100,000.
There’s a simple explanation as to why retirement has gotten so expensive. People are living longer and retiring earlier. It used to be that people worked until they were 65 years old and if they were lucky, they might live another 10 years in retirement. Now the average retirement age is 63 and if you make it to 65, life expectancy jumps to 85 years or older. That means you could spend 22 or more years in retirement!
The biggest wildcard in retirement is healthcare costs. Healthcare is expensive and seems to go up every year. According to study conducted by Fidelity, a 65-year old couple retiring today can expect to pay $275,000 in out-of-pocket healthcare expenses. Medicare helps alleviate some of the healthcare burden, but it won’t erase all out-of-pocket expenses.
Many expenses are often seriously underestimated by people planning for retirement. Be sure to get Sharon’s free e-guide, The 7 Retirement Expenses People Underestimate to be sure you’re not overlooking or underestimating any key expenses in your retirement planning.
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