How Do You Know How Much You Need?

Today’s Prep:

How can you know just what you need? Eric talks through four different financial scenarios to help you get a better idea of what you need to consider and feel confident in your decisions.

Equipping Points:

Sometimes it can be hard to determine just what we really need. How can you know? Everyone’s situation is different, but there are things you can do to better understand your unique needs and situation. Let’s discuss four areas

How can you know how much income you’ll need in retirement? Eric has an easy answer, and that’s to come in and get a Retirement Readiness Review. The methods they use to figure it out start with figuring out how much you spend and will likely want to spend in retirement. Look at your bank statements for the past year to get an understanding of what you’ll need. But then you’ll want to add in the fun stuff like travel or home improvements.

How do you know how much you need in savings? Typically, you save an emergency fund with six months of expenses during your working years. But during retirement, liquidity is different. You have more access to your accounts. There are still things like taxes and risk to consider, but you have more options when it comes to getting a large sum of money if needed.

When it comes to life insurance, how much do you really need? When you are working and have a young family, you want to make sure you have enough to help with the burden of somebody dying. In retirement, it is a tool that allows you to leave tax-free money to your heirs. You may not need life insurance for the same reasons once you are retired, but you may find it serves your purposes from a tax angle.

What kind of risk do you have and how much should you pay attention to the rules of thumb about it? How much risk you should take depends on how much income that you need. The rule of 100 is one rule people often apply to a risk assessment, but it is not always the one that best suits you. What’s your risk tolerance? Eric goes through risk analytics with his clients to make sure their risk tolerance and their portfolio align. Reach out to a financial advisor to ensure your financial plan accounts for your needs and wants.

Listen to the entire episode or skip ahead using the timestamps below.

1:35 – How much income will I need in retirement?

4:43 – How much do you need in savings?

6:40 – How much life insurance do you need?

8:53 – How much risk should you have?

Today’s Takeaway:

Instead of looking at how much I have to save to get to retirement, you really want to look at the income you’ll need. Write down what you’ll spend.

-Eric Peterson

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

Subscribe To The Podcast:

Apple Podcasts  -  Google Podcasts  -  Spotify  -  Stitcher  -  iHeartRadio  -  TuneIn

Check out some other recent episodes

Bracket Busters and Stock Flops: The Risky Game of Picking Winners

March 27, 2025

March Madness is here, and just like filling out a bracket, picking individual stocks can feel like a thrilling gamble. But the odds of winning big are slim. In fact, history shows that most stock picks, like most brackets, end up busted.

Read More

Are Hidden Fees Draining Your Retirement Savings?

March 20, 2025

In this episode, Eric reveals the true cost of investing and how to protect yourself from unnecessary financial drains.

Read More

What Game Night Can Teach Us About Financial Planning

March 13, 2025

In this episode, Eric breaks down the surprising financial lessons hidden in classic board games, offering valuable insights to help you navigate your retirement strategy.

Read More

Mailbag – Upsizing, Financial Advisors & Business Owner Planning

March 6, 2025

Join us as we answer questions about the challenges of downsizing, the emotional aspects of planning for family gatherings, and the realities of transitioning into a financial advisory career.

Read More

Planning for Unique Situations in Retirement

February 27, 2025

While many face the same general retirement concerns, each individual’s situation is unique, requiring tailored solutions.

Read More

Planning for Kids, Grandkids, & Your Future

February 20, 2025

As many nearing retirement age are discovering, adult children and grandchildren can significantly influence financial strategies, making it crucial to understand how to navigate these relationships effectively.

Read More

Financial Planning Conversations for Couples

February 13, 2025

This episode is focused specifically on that planning we do with couples with insights on how we help them navigate tricky conversations about money and retirement.

Read More

Is Your Retirement Based on Wishful Thinking?

February 6, 2025

Many people fall into the trap of wishful thinking when it comes to what they expect will happen in retirement, but a successful retirement isn’t built on hope and assumptions.

Read More

Spending With Confidence in Retirement

January 30, 2025

Eric shares strategies to help retirees enjoy their savings while ensuring financial security.

Read More

Watch Out For These Financial Half Truths

January 23, 2025

Eric pulls back the curtain on some of the most common financial half-truths that many retirees and investors encounter. As someone gearing up for retirement,

Read More

Leave a Comment