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How much money do you need for retirement?

Retirement is something everyone needs to think about. It doesn’t matter if you’re in your 20s, 30s, 40s or 50s, retirement will come around sooner than you think and you need to be prepared to enjoy your golden years. You should spend the final stage of your life relaxing and enjoying the things you love the most, not stressing and worrying about making ends meet.

To help you plan for the future, we’re diving into how much money the average RDH needs to set aside to be truly prepared for retirement and how long it will take to get there.

Retirement in the US 

The average retirement age for US workers is 66 years old. And the average American lives until they’re 79. This means you need to plan for at least 13 years of retirement. As the saying goes, it’s always better to be safe than sorry. So in this article, we’ll be planning on saving money for 15 years of retirement.

 

Many financial advisors say you need to replace 80% of your usual income when you reach retirement. In almost every situation, security payments alone don’t come anywhere near the target. Because of this, we won’t be taking security payments into consideration.

According to Bloomberg, nearly 19% of people aged 65+ were still working in 2017. That’s likely because the longer workers delay retirement, the more money they receive when they finally do retire.

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In 2017, for each year someone continued to work after reaching retirement age, they received a monthly benefit 8% higher. This benefit will increase until they reach the age of 70, the latest claiming age. At this point, they’ll receive 132% of the regular benefit amount.

However, working beyond retirement age likely isn’t an option for dental hygienists. Being on your feet all day and spending many hours bent over a patient’s open mouth with your hands and wrists at odd angles is physically exhausting. Most dental auxiliaries have to do without regular breaks, too, something which proves increasingly difficult with age. 

How much money do you need to retire?

The amount of money you need to retire largely depends on where in the US you live. In some states, such as Texas, you only need $765,000 to comfortably retire. However, in other states, such as California, you need $1.5 million to retire and still be able to live a pleasant life. That’s almost twice as much.

Nationwide, the average yearly expenses for someone age of 65+ is $51,624. So if you’re planning for 15 years of retirement, that means you’d need around $774,360 to retire. This is assuming you’re planning on leaving the workforce when you reach 66. This would give you $993 per week to live on.

The problem with retirement plans

If you think you can rest easy and take advantage of a retirement plan, you’ll have to think again. While dental practices can offer schemes to help staff save up for retirement, the bad news is that most dental hygienists don’t work enough hours to qualify for them.

While a full-time dentist or front office staff member who works 40 hours each week can benefit from such plans, most RDHs only work 24-32 hours per week. Because of this, it’s down to you to save for your retirement. No one is going to help you out.

How long will it take to save that much?

According to Expatistan, a family of four spends $4,591 per month, while a single person spends $2,624 per month. To keep things simple and so we don’t have to factor in the cost of children or partners, we’ll use a single dental hygienist living on her own for our calculation.

So the average RDH spends $2,624 per month — that’s $656 per week. The average RDH makes $34.48 an hour for 24-32 hours per week. That works out at $827.52-$1,103.36 per week. Again, to keep things simple, we’ll go in the middle and say she earns $965.44 per week.

After expenses, that leaves the RDH with $309.44 per week that she could potentially put to one side and save. Assuming she saves every spare penny every week, it would take her 2,503 weeks to save $774,360 for retirement. That’s 626 months or 52 years, not taking into consideration additional expenses for things like vacations or needing to take time off work for being sick.

Even assuming you enter the world of dental hygiene as early as you can and you save all your spare cash every week for retirement, you’d still be forced to work past the average retirement age of 66 to be able to afford it. But you don’t have to work your tail off to enjoy a comfortable retirement, there are other ways.

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If you’re a self-employed dental hygienist or you’re employed but you don’t work enough hours to qualify for a retirement plan, you can set up your own retirement account. IRA, Roth IRA, SEP and Solo 401(k) plans are the best options available to you. These can help boost your savings so you can afford to comfortably retire at an earlier age.

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It’s never too early to start getting ready for retirement. The earlier you start, the less stressful your last working years will be. Just keep in mind that working all the hours you can and saving up the money you make isn’t enough to prepare yourself for retirement. You need to take your savings to the next level with some kind of retirement plan if you really want to retire comfortably.

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