Planning for retirement involves the meticulous breakdown of expenses and investments. A lot of research and preparation goes into setting up your desired retirement lifestyle because it can be challenging to determine your life expectancy.
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Retirement planning can get overwhelming, especially if you’re worried about your finances. This is why we wanted to explore the signs that you’ll be able to enjoy a middle-class retirement without stressing about paying the bills in your golden years.
Here are the six key signs you’ll be able to enjoy a middle-class retirement.
“One of the hallmarks of a middle-class retirement is having stable and diverse income sources,” said Erika Kullberg, an attorney and personal finance expert, and founder of Erika.com. “This may include income from pensions, Social Security benefits, retirement accounts such as 401(k)s or IRAs, and other investments.”
The most important factor in enjoying a middle-class retirement is an adequate amount of income to cover your expenses. You’ll have an enjoyable retirement if you don’t have to constantly worry over how you’ll get by.
“Additionally, having multiple streams of income can provide a buffer against economic downturns and unexpected expenses,” Kullberg said.
As we’ve seen in recent years, external factors like inflation can bring up the cost of living expenses. This means you’ll want to diversify your income streams to have multiple sources to help you live your desired lifestyle.
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“If you’ve diligently contributed to retirement accounts throughout your working years and have accumulated a healthy nest egg, you’re likely on track,” Kullberg said. “Aim for a retirement savings goal that allows you to maintain your desired lifestyle without relying solely on Social Security benefits.”
While figuring out how much you need to save for retirement may be challenging, you want to take a realistic look at your expenses. You’ll also want to do whatever you can to contribute to your nest egg so that you can have the savings to get you through the rest of your life. You don’t want to rely on the limited income provided by Social Security benefits because that may not be enough to enjoy yourself.
“If you’ve paid off high-interest debt, such as credit cards or personal loans, and have a manageable mortgage payment, you’re in a strong position,” Kullberg said. “Being debt-free or having minimal debt allows you to allocate more funds towards retirement savings and discretionary spending in retirement.”
