on this episode of the Personal Finance Podcast, how to plan out retirement by age.

What's up, everybody, and welcome to the Personal Finance Podcast. I'm your host, Andrew,

founder of MasterMoney.com. And today on the Personal Finance Podcast. I'm your host, Andrew, founder of mastermoney.com. And today on the

personal finance podcast, we're going to be talking through how to find your retirement number

by age. If you guys have any questions, make sure you join the Master Money newsletter by going

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Now, today we're going to be talking through how to plan out your retirement

number by age. And this is one of those things that every single person I truthfully believe

needs to track their retirement number every single year. This is not something that you can

wait every five years or every 10 years and track your retirement number. I think this is something

you need to do on a yearly basis. And at the top of this show, what I'm going to do is I'm going to show you exactly how to track your retirement number step by step. Then we're going to dive into how to plan out your retirement number by age and some of the things that you need to focus on, some of the things you need to be thinking about by age. So the first thing we're going to do is step one is we are going to start with what we are spending today. This is one of the most important metrics that you need to know is figuring out where you stand right now. And I want you to pull out your bank statements and I want you to add up how much you're spending on a yearly basis. Now you can figure this out a number of different ways. One, you can take the average of the last couple of months, figure out what that average is, multiply it by 12, and you can figure out how much you spend that way. Two, is if you use an app like Monarch Money, you can go in there and look at your yearly spending over the course of the last year. This is one of the beautiful things about using Monarch Money is that you can go back and figure out these numbers very, very quickly. In fact, Monarch Money now has an AI assistant where you can chat with it and ask it a few questions, and it is still in beta mode, but it is something in a feature that you can use. Three is you can also pull out your bank statements and you can take out all the personal information that's on your bank statements, throw them into some sort of AI tool and say, hey, how much do I spend every single month? But you want to make sure you are careful about privacy when it comes to this because you do not want it to have too much information. So these are three things that you could do out from. But I just highly recommend that you go through figure out how much you spend every single month. That is number one. Now, we are looking at what we are spending right now. And you may be saying to yourself, well, why would I care about what I spend right now? I'm trying to figure out how much I'm going to be spending in retirement. This is a very hard number to figure out exactly what it is. So instead, I want you to go out and figure out what you're spending now. We're going to use this as a baseline. And I'm going to show you how to think about this going forward. Now, step two is I want you to think about the expenses that are going to be gone over the course of the next couple of years. So maybe your plan is to pay off your mortgage before you retire. Well, are you on track to do this? Or are you going to own your home for 30 years by the time you hit retirement age and you know that mortgage is going to be paid off? Well, that is a great indicator that you may not need, you know, the amount that you're paying towards your mortgage or are your kids going to be out of the house and those expenses are going to be gone, then you may not need to think about those. Or maybe you have a car payment and you're not planning on having a car payment. You're going to have additional debt payments right now that you do not plan on having in the future. Maybe you're paying for your kids' school or extracurricular activities.

Those types of things can get removed from your overall budget when you're thinking about your

retirement number because the likelihood of you having those extra expenses is not going to be there.

And so we want to take out all the expenses that we do not anticipate being part of our budget in retirement. Now, if you're saying to yourself, now, I want some extra cushion. You can absolutely leave those in if you are okay with the risk of having to work longer. But if you are someone who really wants to retire as fast as you possibly can, I would remove some of those if you know they're not going to be there by the time you hit your retirement age. Now, if you are totally unsure and you're like, I don't know what expenses are going to be there, I don't know which ones are not going to be there, then you want to make sure that you just leave them in and you can use the number of how much you're spending right now. Now, the next thing we want to do is we want to factor back in

healthcare. Now, healthcare is one of the biggest variables when it comes to retirement. In fact,

healthcare spending rises dramatically once you reach retirement age. And folks after the age of 70,

spend a lot more on health care study show than folks before the age of 70. And so we want to make sure that we are

fact, we are fact, the average couple is going to spend over $300,000 in retirement when it comes

to health care. So how do we plan for this and how do we think about this? So we can look at the

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