Even though life expectancy in the United States has been pretty consistent over the last few years, centenarians are the fastest growing age group in the United States. What’s a centenarian? A centenarian is a person who is over 100 years old. As of 2020, life expectancy in the U.S. is 78.93 years. More people are living longer, a lot longer. If you plan on retiring (and you should have a plan), you need to make sure you have a large enough nest egg to make sure your nest egg isn’t gone before you are. It is never too late to start saving for retirement, but the sooner you start, the more time you give compound interest to work its magic. We live in a world of instant gratification where buying all the cool new stuff drives people to unnecessarily spend on things they don’t need. This could be a few hundred dollars every year or a few thousand dollars every year (or more). While this spending may seem insignificant when you are making these purchases, diverting this spending into retirement savings can drastically increase the size of your nest egg. If you divert $100 every month from extra spending towards retirement for 20 years (240 months), you’ll add over $52,000 to your retirement nest egg (at a 7% growth rate). Increase the savings to $200 per month and the size of nest egg will be $104,000 larger.
We all need to think long term about retirement. I mean really LONG term. I’m 38 years old. If I live to 100, I have 62 more years left. That means I’ll be alive 163% longer than I’ve already been alive. If I ‘only’ live until the current life expectancy, I’ll still be around for over 40 more years.
It is more important than ever to plan for your retirement. When do you want to retire? Where do you want to retire? What do you want to do when you retire? What will your expenses be when you retire? Will your house be paid off? How large a ‘nest egg’ will you need when you retire?
What’s your plan? Check out some of these posts to start thinking about retirement:
If you’re not sure how to get to your retirement nest egg goal, check out the following calculators:
Retirement Age Calculator – Used to estimate your retirement age based off of your current retirement savings and savings rate
Retirement Nest Egg Calculator – Used to estimate how large your ‘nest egg’ will be when you plan on retiring
Retirement Savings Calculator – Used to calculate how much you need to save every month to get to your goal ‘nest egg’
If you are just starting out on your financial journey, check out the ‘6 Steps of the Rat Race Off Ramp’ to start your journey.
Do you plan on retiring from the military? Check out these estimated retirement charts:
How is your retirement planning going? Are you on track?
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