As you get close to retirement, the overwhelming concern for most people is making sure that the money they’ve saved will last them for the next several decades. The way most people approach this is fairly straightforward: Take the total sum of money you’ve saved, figure out what you need to spend every year, and then implement a withdrawal plan based on specific percentage (usually around 4%) that will ensure your annual withdrawals plus inflation don’t exceed your savings. There are free online calculators that, if you input your age, your salary, your existing savings and your monthly contribution, will give you an exact figure for how much you need to save if you want to retire at full retirement age (usually 67, for social security purposes). They build in assumptions about how much your investments will throw off (which is usually a conservative figure), and how much you should drawdown, which is usually somewhere around 4%. We’re not saying they’re wrong, exactly. We’re just saying there’s definitely a better way to go about it. We’ll get into that, but first let’s review the big questions that most people have about retirement. There may be some you haven’t thought of yet, but you should.
