ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How Much Will I Need to Retire (Part 3)

Updated on September 2, 2020
Art West profile image

After 43 years as an Accounts Payable Manager, I have learned a lot about finances and how to handle money.

Have Money When You Retire

How much will I need to retire (part 3)

In the first 2 parts of this series, I explained why we will need to have at least as much annual income when we retire as we need prior to retirement. The figure that I established was $50,000 per year. I also established that in order to have $50,000 per year in retirement, you would need to have 1.05 million dollars invested.

Now we are going to see how to get in position to get that 1.05 million dollars. The key to financial freedom is to be debt free and stay debt free. You need to be willing to make the commitment of getting out of debt and staying out of debt. This may mean that you will have to make some sacrifices along the way, but remember the long term goal is to have a comfortable retirement.

Saving money for retirement

Example of Family of 4

I am going to use an example of a married family of 4. The husband and wife are each 31 years old. The have 2 kids in school ages 8 and 10. They have a combined net income of $50,000 per year which is $4,166 per month. They have no savings or investments. They have 4 credit cards with balances of $500, $1,000, $1,500 and $2,000. The minimum payment on each card is $50 per month. They have 2 cars with balances of $5,000 and $10,000. The monthly payment is $300 per car. They have a $15,000 Home Equity Loan and the monthly payment is $100. Their house payment is $1,000 which includes principal, interest, insurance and taxes. It costs $1,200 for insurance on their cars and $600 to put license plates on them.

Before I go any farther, I am going to tell you that this article is very strongly influenced by Dave Ramsey's Financial Peace University. I encourage anyone, no matter what your financial situation is, to go through Financial Peace University. Churches all over the United States are offering this class. There is 1 class a week for 13 weeks and it usually costs around $100. You can also take the class online. You will learn how to get out of debt, stay out of debt, how much and what kind of insurance you need, what are good investments and much more. It is well worth your time and you will easily get your money back...and more. Go to and check it out.

Now back to our example. The first thing to do is make a list of your debts. Some people say pay the largest debt first, some say the largest payment and some say the highest interest rate. I agree with Dave Ramsey, pay the smallest balance first. This way you will get something paid off quickly and have a feeling of accomplishment.

Next you need to make a budget every month and STICK TO IT. Here is the budget for this family. They start with $4,166 and give $250 to a church or charity. They now have $3,916. Next they want to buy food, this does not mean eating out all of the time or eating steaks. They should be buying inexpensive food and maybe buying in bulk. They budgeted $500 for food so now they have $3,416 left. Next they make their house payment of $1,000 so they are now down to $2,416. They pay their utilities and that means they may have to cut back on the cable and cell phones. They are paying $500 for utilities so now they have $1,916 left. Next in the budget are the 2 car payments of $300 each so they are now down to $1,316. They then set money back for car insurance and license plates $150, they have $1,166 left. The budget $100 per car for gas so that leaves $966.

What To Do After The Basic Necessities Are Covered

They now have all of the basic necessities covered. Since they have 2 school aged kids that are going to be growing, they set aside $75 a month for clothes. These kids are not going to be getting name brand clothes. They will get clothes from rummage sales or Good Will. They also set aside $75 for school supplies and activities so subtract $150 from the $966 and they are down to $816. The parents are each getting $10 a week to do with what they want, I know this isn't much but you have to make sacrifices. The kids are each getting $5 a week for allowance. That a total of $120 per month from the $816 balance so you are now down to $696.

Now they budget the minimum payments on the 4 credit cards which was $50 each. Subtract $200 from the $696 and they are down to $496. They pay their Home Equity Loan of $100 and they are now at $396. Even though the husband has health insurance at work they will still have some deductible to pay so they set aside $100 per month for that. They now have $296 left. They also set aside $46 a month for car maintenance, the husband is not a mechanic so he takes it in for oil changes and routine maintenance. They have $250 left.

Someone now needs to TEMPORARILY get a part time job. It could be mowing yards, baby sitting, flipping hamburgers or in our case we are going to say the husband delivers newspapers each day before work. He nets $300 per month. Combine that with the $250 they have left over and they have $550 extra money each month.

In the next article, which will be the next to last in the series, I will show you what they did with that extra $500 per month.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2009 Art West


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)