# How To Realistically Plan For Retirement?

Just the other day, I overheard a very involved conversation between a husband and wife, where they were both afraid that they would never be able to afford to retire. The wife was talking about this man who just passed away, at 89, and she said that she marveled at how someone could live that long, and still be able to maintain the apparently nice life style that this gentleman seemed to live. The longer the conversation continued, the more downbeat and depressed this couple appeared, appearing almost to give up on their own future. What can people do to plan to be able to retire and maintain a reasonably reasonable life style?

1. Determine how much it costs you to live today, calculating in housing costs (including utilities, etc.), food, health coverage, reasonable amount of entertainment, a vacation or two per year, etc. For each couple, what is included may vary, because for each, the needs and desires may vary.

2. Now use an actuarial table to determine what a fairly average amount of annual inflation will translate that number to, and instead of basing the need on the dollar amount at age 65, calculate the number of years until you turn 75 instead. As a rule of thumb, remember that at three percent (3%) inflation per year, the amount needed will double in approximately 24 years (the "Rule of 72," division 72 by 3). Therefore, if you feel you need \$ 50,000 per year in today's currency, it would be equivalent to \$ 100,000 in 24 years.