Practicing for retirement is the only way to know if your plans will result in a match to your goals and desires. Which of the following plans do you plan on using to fund your retirement? When reviewing your plan, remember that most financial experts suggest that you will need at least 75 percent of your pre-retirement income, in order to maintain your standard of living in retirement.

  1. Social Security Only

The Social Security Agency states, “under current law, if you have average earnings, your Social Security retirement benefits will replace only about 40 percent, so you’ll need to supplement your benefits with a pension, savings or investments.” Thus, you as an individual must create a plan that will replace the remaining 35 percent or cut your living expenses by an equal amount. But, with current funding of Social Security, it is estimated that all funds will be depleted around 2030 and diminishing payments are expected to start well before then. Because of its uncertainty and low income replacement possibilities, this is one of the poorest plans you can make.

  1. Pension Only

You are lucky enough to have a good paying pension. You plan to use money from your pension as your only source of income, if Social Security does pay you anything, great, but you’re not planning on it. Unfortunately, this plan may not be as safe as you think. Several major companies in the steel and airline industries have already defaulted on their pension plans. There is speculation that the next major industry to default on their pension plans will be the automotive industry, including both automotive manufactures and automotive suppliers alike. Others industry may default as well. If your pension defaults, what will you do then?

  1. Social Security plus Pension

Read the above paragraphs to see why this is not the best plan.

  1. Social Security plus Some Investments

Read the “Social Security Only” paragraph above and consider how your plan will hold up if you have to live on your investments alone. You do not have to guess what your future would look like. Using this retirement calculator, you can see it now.

  1. Pension plus Some Investments

Read the “Pension Only” paragraph above and consider how comfortable your retirement will be if you have to live on your investments alone. Using this retirement calculator, you can see what your future would look like.

  1. Social Security, Pension and Some Investments

You’re no fool. You know that there is a good chance that either Social Security or your pension may default, so you’ve made some investments too to be on the safe side. Have you considered how your plan will hold up if you have to live if one of or both of these external income sources fail? Although, this is one of the better plans you can make for your future, you still need to run “what-if” scenarios with the help from a retirement calculator.

  1. Investments Only

This can be the best plan of all, if executed properly. A study conducted by the U.S. Department of Commerce found that, sadly, only 5 percent of Americans have saved and invested enough money to be financially independent at age 65. So make sure your retirement investments are on track by using a retirement calculator. With this plan if your pension, Social Security or both do come through, then you have use this “found” money to donate to your favorite charity or spoil the grandkids.

So now that you have identified your plan and practiced your retirement through the use of a retirement calculator, you can start tracking your progress. This is a good first step toward your retirement education.