When thinking about saving for retirement, the goal for investors is to put as much money away now to be used later. But, do investors know how much they should be saving if they don’t have the desired outcome in mind? Once they have the desired outcome, do investors know how to invest to have the best chance of reaching that outcome?
There are several considerations for saving for retirement. How much to contribute, whether there is a company match, are contributions pre- or post-tax, whether to contribute to a Roth account, what are the fees, and what are the investment options are just a few. As investors approach retirement age there are additional questions to consider. What does the investor want their retirement to look like? Do they plan to move or downsize, travel, or help heirs with education costs? Living situations can change at any time, and so can priorities as well as desired retirement goals.
One major concern in retirement is rising health care costs. Health care expenses are one of, if not, the biggest potential liabilities retirees face. According to Fidelity Benefits Consulting, “a 65-year-old couple retiring this year will need an average of $275,0001 (in today’s dollars) to cover medical expenses throughout retirement, up from $260,000 in 2016”. And, unfortunately, costs continue to rise.
