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How much will I need to retire (part 1)
Saving money for retirement
How much do I need for retirement (part 1)
As you plan for retirement, the first question you should ask is "how much money will I need each year to live off of?" When you go to a financial planner, the standard response is 80% of your current take home pay. I respectfully disagree with that.
When you retire you should be debt free, consequently no more house payments. You will also no longer have various business expenses like work clothes, eating out for lunches and other things. You will most likely have more health issues so your health cost will increase. You will also be more active, traveling more, maybe playing golf more often and other various activities. That is why I say that you need at least the same amount as your current take home pay.
Ideally you should have a monthly budget that you follow so you will know exactly how much you will need in retirement, however, most Americans don't do that. If you don't already have a budget and resist making one, then you should at least sit down every year or two and figure out how much you would need if you retired that year. At least that will give you a target figure, but again I stress that it is important to have a budget every month.
Now that I have lectured you on a budget, I will tell you that the last report I saw said the average household income in the United States is $50,000 per year, so for these articles that is the figure I will use. In the next article I will talk about how much money you need to have so you can get that $50,000 per year for the rest of your life.
- How much will I need to retire (part 2)
In my last Hub I showed how I came up with the figure of $50,000 a year for retirement income. I said that the last figure that I saw for that average household income in the United States was $50,000. ...
- How much will I need to retire (part 5...the results)
In the first 4 parts of this series I explained why you should have at least as much income after you retire as you need prior to retirement. I set an example of a net income of $50,000 per year. It was...