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Local experts answer reader questions: How much money do I need to retire?

How much money do I need to retire?
How much money do I need to retire? - Submitted

Q: How much money do I need to retire?

A: This is the most asked question in my practice. The retirement savings "number" you need is different from your neighbour's; the answer is different for each person because retirement lifestyle expectations vary. You may have a pension from work when you retire and your neighbour may not; this changes the amount you need in a lump sum as you enter your retirement years. In each case, different savings are required and a number of variables, ranging from spousal contributions to your health status, can impact the amounts needed.

In other words, your "number" retirement savings won't come from a simple formula and it may change as you go through life.

Working with an advisor can help you understand what you need to do to accomplish your individual retirement goals. Rather than worry about achieving a single large number, an advisor will take a structured approach to figuring out what you need to be comfortable at various points in your life. His or her questions will range from, "How will I generate income in retirement?" to "How will inflation and taxes affect my lifestyle?"

Your advisor should also help educate you on managing money after or as you near retirement. It is important, for example, to understand the impact of inflation and to identify safe withdrawal rates that account for today's longer life-spans. As you age, your advisor should also help you avoid high risks, and keep investment costs and taxes low.

For answers to all of your retirement questions, find more information at http://www.edwardjones.com.

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