Imagine life 30 years from now. After working really hard for so many years and giving the best education and lifestyle to your children, you want to maintain a decent lifestyle with no more office work and the rush of daily life. But how well can you spend your post-retirement life will largely depend on your economic position. A good retirement income will help you maintain a decent and comfortable life. But the increasing rate of inflation which further leads to the devaluation of money makes it difficult to maintain a comfortable lifestyle after the age of retirement.
How much is enough?
Well, there isn’t any magic figure at present that can be termed as the best average retirement income that can secure you a comfortable future. The main factors for this distress are job security, inflation, economic growth, investment returns, and of course increasing medical expenses.
Cost assessment
If we keep in mind the present economic condition of the country, an average family needs around $6,288 per month for leading a comfortable life which includes facilities like housing, food, transportation, medicine, and other utilities. This inflation rate fluctuates between 6–7% and the investment return is 8%. So if the amount is $75,459 per year at present day valuation, the amount could be anywhere close to the million dollar mark. Now with respect to the average life expectancy, it can be said that an average person may survive for at least 85 years of age. So if we calculate further, the average retirement income would not be big enough to lead a comfortable life till the individual survives.
So, it’s very much clear that when many people are not even meeting the average retirement income in the USA, even the “magic figure” of 1 million won’t be enough for a family to lead a comfortable and healthy life after retirement.