Telling you that retirement is expensive at this point is like listening to a broken record. We all know that it takes a pretty big nest egg to get us through our golden years. And we all know about the various costs – from healthcare premiums to taxes – that make punching our last clock a costly affair.
But despite our best efforts to estimate what we’ll need during retirement, it seems like it just keeps getting more and more expensive to call it quits. And according to the latest studies, our nest eggs might need to be even bigger than anyone had previously thought.
For investors, buying a $1 worth of income for the latter part of life is quickly becoming a daunting task.
A Big Jump Thanks to Two Major Issues
When we are working, our income and spending habits are tied together. We know how much we earn and we know that our spending should be less or at least equal to that amount. We focus on cash flows from our jobs. As we retire, the relationship changes. Our savings have to provide for our entire retirement lifetime.