Forecasting Your Future in Retirement

September 15, 2017

Everyone wants to have a lot of money at their disposal when they retire, yet only 18 percent of Americans feel confident that they’ll be in such a situation when they leave the workforce. Some may tell you that rather than attempting to forecast what your retirement income may be, your efforts are better spent working with financial planners and Encino tax consultants to ensure you have enough available to you in the here and now. Yet putting off your retirement planning could leave you with little to pull from when that time in your life arrives.

Understanding How Much May Be Available to You

It’s easy to assess how much income you can anticipate in your retirement provided that you focus your planning on the following four elements:

• Spending: Understand what expenses you’ll have rather than trying to figure out how to replace your current income. That will give you a baseline income level for you consider when planning your retirement savings.

• Inflation: If the inflation rate of 4.07 for the last 50 years in the U.S. were projected to remain the same 50 years into the future, your buying power would be reduced by half every 17 years. Thus, plan your future expenses based off future cost projections.

• Savings: Savings is the one element of retirement planning over which you have the most control. Yet one in three Americans does not have anything saved for retirement. Establishing a consistent monthly retirement savings rate (outside of investment accounts) gives you a reliable projection of what you’ll have available to you in the future.

• Investments: The hope is that your investments will generate “best-case-scenario” returns. Yet when planning for your retirement, you should instead factor in a lower-than-average ROI. This covers you in the event of any periods of poor market performance.

Let Us Help

There really is no secret formula to ensuring that you’ll have enough money available to you when you retire; you simply need to have well-established goals and the right sort of guidance to help meet them. As one of the best CPA firms in Los Angeles, we here at Wallace & Associates can provide you with such assistance and insight. Our expertise will ensure that you have the funds needed to truly enjoy your golden years. For a free assessment on retirement planning or Los Angeles tax preparation, call us at 818.995.2928.