Many people hear "retirement" and think— what? 401K? Roth vs. Traditional IRA? Stocks, bonds, mutual funds? Do they?

Or do many people put money away according to the suggested amount and then simply hope that when retirement comes all will work out?

One report I read estimated that 66 million Americans have put away a Whopping $0 towards retirement.

Many people are still thinking there might be a thing called Social Security around when they retire. Social Security: as of 2004, the average annual Social Security retirement benefit is approximately $11,000. That is not a lot to live on folks. Plus, we all hear the news periodically that there might not be any Social Security around when we get older and need it.

And as a further WAKE UP call, I found a calculator which estimated (without Social Security):

• a couple at 40
  

• bringing in $90k a year (together)
  

• with very modest investments
  

would need to save an additional $2,690,000.00 ( yes 2 million +) in order to retire at 65-- OR – plan on working an additional 29 years!!

Now before you get overwhelmed and click over to another article—lets put our heads together and simply cover a few very very basic start up basics.

1) Standard Of Living: You need to know at what standard of living you will want to live during retirement.

2) Basic Living Expenses: You will need to calculate the cost of basic living expenses (at that level) i.e. electric bill now of $200 = what in 2030?

3) Hobbies and Leisure Activities: Know what type of hobbies, and leisure activities you will keep busy with and what their cost might be then.

4) Family Visiting / Travel: Realize that more and more children move away when grown. So while they work out of state—YOU may need to do the traveling to see them. Plan for these costs.

You will need to total yearly amounts. You will need the approximate yearly cost to live (at your desired level) during regular healthy retirement. And, you will need the total yearly amount of costs to live in assisted or full care living facilities ( for each – you and mate).

Multiply each yearly amount by the number of years you might be living in that circumstance. Example: Retire at 65. Live healthy retirement- 15 years (so 15 x yearly cost of healthy living) . Live assisted – 8 years ( so 8 x yearly cost of living in care).

You now have two totals that when added together equal your estimation of the total dollar amount you will need to draw from in order to live after retiring. NOW you are ready to begin planning your investments in such a way that you can achieve that TOTAL number by the time you retire.

Here are some tools to help you now that you are ready to take that first step:

USA Today retirement cost calculator: http://www.calcbuilder.com/cgi-bin/calcs/RET2.cgi/usatoday

Motley Fool’s retirement area http://www.fool.com/retirement.htm?source=PFinAg

Metlife’s retirement area http://www.metlife.com/Applications/Corporate/WPS/CDA/PageGenerator/0,1674,P1946,00.html

About.com’s HUGE retirement resource area: http://www.retireplan.about.com/

Until next time—all the best,

Kate

Kate Hufstetler is a well established Personal Life Coach. Her clients come from both the United States and overseas. She offers coaching services via email and phone consultations. For more information and current highlights please visit: http://www.comedreamwithme.com/start_today.html

Kate@comedreamwithme.com