If you’re lucky enough to live in Kansas City, you know that you live in a thriving city that’s full of culture and far from the stereotype of cornfields and cattle farms that out-of-towners tend to think of when they picture Kansas City. From the beautiful Kauffman Center for the Performing Arts to the city’s incomparable barbeque, Kansas City is a great place to live. Not only that, but the cost of living is reasonable, hitting approximately dead center at the national average. However, even a city where costs aren’t sky high, it still costs money to live, and you’ll need money for your livelihood when you’re retired just as much as you do now.
The best way to ensure that you’ll be provided for in retirement is to take care of that now, in your working years. If you save a little each month and invest it wisely, it’ll grow to be an excellent source of income for yourself when you reach your golden years.
What age should you begin your retirement income planning?
You can—and should—begin to save for retirement as soon as possible. People of any age can save for retirement, but the younger you are when you start, the further your money will go.
Let’s take a quick example.
- You start saving at the age of 20
- You put $360 per month into your retirement account
- You invest it until age 65 at 6% interest
When you retire, you’ll be able to withdraw an income of about $4000 per month—for 30 years! That’s not a bad paycheck for your retirement. The $360 you save today may be a sacrifice, but the rewards when you can’t work anymore will be totally worth it.
On the other hand, if you waited until you were 35 to start saving, you’d have to put about $990 per month in the account in order to get the same monthly paycheck at retirement. To put it a different way, if all you could spare was that $360 per month starting at age 35, your monthly income at retirement would be less than $1500 for 30 years.
In 2015, the Bureau of Labor Statistics estimated that the average American senior would have an average of $42,557 in annual expenses that year. In Kansas City, living costs are right at the national average, meaning that you’d need an income of $3546 per month in order to maintain an average standard of living. Social Security won’t cover that. If you were to retire today (and stay retired for 30 years), you’d want to have about a million dollars in your retirement account in order for it to last you that long. The earlier you start to save, the closer you’ll be to accumulating that by the time you retire.
What’s the best way to plan for retirement in Kansas City?
Navigating the retirement planning journey is tough when you try to do it alone. You’re prone to making mistakes, missing out on income that you could have had, or losing money. Fortunately, you don’t have to walk this path alone. When you want guaranteed income that lasts for your whole retirement, turn to Matt Nelson and the professionals at Income for Life. We are here to help you through the whole retirement income planning process.