What many people don’t realize is that for many years, retirement was not seen as a time to enjoy life, but rather a time of anticipating its end. Instead of waiting around for death, we now look forward to our mature years, which is undoubtedly a positive shift. With this shift in mindset comes a need for more resources before we can officially say goodbye to our nine to five with confidence. Having multiple sources of retirement income is key if you want to have enough money for more than just the basic necessities.

Pre-retirees will be happy to learn that according to the Employee Benefit Research Institute, as we age, we actually have fewer expenses.¹ In their study, they found that from ages 65 to 75, people spent 19 percent less money on household expenses. This number then rose to 34 percent by the time they hit 85-years-old.¹ Once you retire, you can expect your overall costs to be down by 20 to 40 percent, which is why numbers vary when determining how much you should have in your 401(k) plan before your exit from the workforce.¹

Expand Your Income Streams for Maximum Savings

Instead of overwhelming you with mind-numbing numbers and calculations, let’s explore different scenarios and ways you can make sure you’re well-prepared for your retirement. While contributing to your 401(k) is important, the key is to never put all your eggs into one basket. As long as you’re contributing to your 401(k), IRA or other retirement plans consistently for a number of years and taking advantage of other investment or saving vehicles, you are on the right track for saving for your retirement.

Not all sources of retirement income are what you might expect. The National Institute of Health conducted a survey and found that about 80 percent of senior citizens owned their own house. Within that group of people, more than half did not have any outstanding debt. The remainder of the individuals were very close to being debt-free.² This is a great example of not putting all your eggs in one basket. What many people don’t realize is that a home without a mortgage can actually serve as an income source from a reverse mortgage. Not only that, but it also provides you with additional financial security. If you later decide to sell your house, you’ll have some extra money to add to your nest egg.

Take Advantage of All Available Saving Vehicles

Before you spend hours and hours trying to determine how much money you need in your 401(k) before you retire, look at the big picture. From Social Security and pensions to annuities and investments, it’s important to review all potential sources of income before calculating the optimal amount to contribute to your 401(k) plan every month.

When it comes to your 401(k) plan, a good rule of thumb is to contribute at least enough money to take advantage of your company’s maximum matching contribution.

How Much Should You Have in Your 401(k) Before Retirement?

Expand Your Income Streams for Maximum Savings

Take Advantage of All Available Saving Vehicles

Other Ways to Get Retirement Ready