If you’re thinking of getting out of the rat race and retiring, the amount of money you think you’ll need to live on might not be close to what you actually will need in your golden years.
The new Transamerica Center for Retirement Studies survey says the majority of Generation X thinks one million dollars will be enough to retire on. But financial planner Richard Rosso says that may not be the case.
“If you retired with a million dollars today, for thirty years you’ll get $38,000 a year. How are you going to live on that? It sounds good to say you have a million bucks, but that may not be nearly enough,” Rosso said.
Almost a third of the Generation X’ers polled said that they'd like to have $2M to retire on, but Rosso says the problem with throwing around these numbers is that what you're making now in many cases isn’t what you were making.
“When your firm cut your salary a few years ago, did they give it back to you? All of the people I’ve talked to said they haven’t gotten it back. Salaries have gone down over the last 40 years. And since the financial crisis of 2008 we haven’t gotten back real median incomes,” Rosso explained.
And as far as how you should invest, Rosso says slow and steady wins the race at the end of the day; that being aggressive may not benefit you when it's all said and done.