As you work with your financial advisor to build a retirement savings program tailored to your goals, risk tolerance and time horizon, try to determine as accurately as possible how much you’ll need.
To get a general idea, you can use one of two approaches, depending on how soon you intend to leave the work force.
- Five or more years from retirement. If you’re five or more years away from retirement, many experts believe that you should figure on needing roughly 80% of your pre-retirement income, multiplied by the number of years you’ll spend drawing down your resources.
|Preretirement Income||x||80%||x||Years of Retirement||Estimated Savings Needed|
|$45,000||x||.80||x||25 Years||= $900,000|
While the answer you get will be in today’s dollars (rather than in tomorrow’s inflated ones), it will give you a ballpark figure of what it will take to maintain your pre-retirement standard of living.
- Five or fewer years from retirement. If you’re five or fewer years from retirement, it’s smart to create a detailed budget identifying all your projected annual living expenses. Remember, certain costs, such as transportation, clothing, recreation and medical expenses, are likely to change as you transition from work to a lifestyle in retirement.
Call your financial advisor to help determine your retirement income needs and see if you are on track with your retirement savings.
Effective December 4, 2017, if you do not have a financial advisor listed on your account(s), any new Oppenheimer fund purchase or retirement account loan repayment made to these account(s) will be invested in Class A shares without a sales charge (Class A shares @NAV).