Kiplinger\'s Personal Finance 02.2020

RETIREMENT

As you approach retirement, it’s easy to become

fixated on the magic number—a pot of money large enough to

allow you to retire comfortably without outliving your savings. But

figuring out whether you can afford to retire requires math, not

magic, along with a thoughtful analysis of how you plan to spend

your time and money. On the following pages, we’ll help you come

up with a realistic estimate of how much money you’ll need to retire

in style. // Plenty of online calculators will help you figure out

whether you can afford to retire based on the amount of money

you’ll need to replace a specific percentage your current income. A

popular rule of thumb, for example, suggests that you should plan

on replacing 70% of what you currently make, or 80% if you want

to live large. But this guideline is deeply flawed, financial planners

say. During their early years in retirement, many retirees end up

spending as much as or more than they did when they were working,

says Jennipher Lommen, a certified financial planner in Santa Cruz,

Calif. // However, if you were to move to a lower-cost area, say, or

stop supporting adult children, your living expenses could drop in

Plan Now to

Retire Worry-Free

44 KIPLINGER’S PERSONAL FINANCE^ 02/2020

Are you saving enough for retirement? Our 10 steps

will help you finance the lifestyle you’ve always wanted.

BY SANDRA BLOCK

ILLUSTRATIONS BY ANDREW LYONS