{"id":9807,"date":"2015-06-19T15:10:48","date_gmt":"2015-06-19T22:10:48","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=9807"},"modified":"2016-12-21T07:27:44","modified_gmt":"2016-12-21T15:27:44","slug":"how-much-is-really-enough-to-retire","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/how-much-is-really-enough-to-retire\/","title":{"rendered":"How Much Is Really Enough To Retire?"},"content":{"rendered":"

You probably have run\u00a0into a few retirement books over the years. One of the more interesting of them was one entitled The Number<\/em>.<\/p>\n

That really puts a fine point on things, doesn’t it? How much do you need to retire, exactly? What’s your “number” for retirement<\/a>?<\/p>\n

Often, we assume a large round figure and let it go at\u00a0that. Like $1 million.<\/p>\n

But it’s more than a little unrealistic to pick a number from the air without knowing two important things: How do we get there, and do we even need that much money anyway?<\/p>\n

\"retire\"<\/p>\n

Last things first. You should not target a number you need to retire but instead get a real sense of how much cash you need to live well and care for yourself. That’s what retirement is, after all \u2014 not having a job anymore.<\/p>\n

Go through your monthly spending now. Look at your bills, your bank account, any credit card spending and come up with that number first. Work with a year’s worth, so you don’t miss any one-off costs like insurance bills or vacationing.<\/p>\n

Now, subtract the costs that\u00a0will go away. Probably, that will be your mortgage. You’ll replace cars less often, so halve your automobile\u00a0spending.<\/p>\n

Add back some money for healthcare costs, since those will creep up for sure. And make sure you assume a certain amount of “splurge spending” on travel or new hobbies.<\/p>\n

Now\u00a0you have your really important number, your cost of living in retirement. The only issue is how to pay for it.<\/p>\n

Chances are, you haven’t really run your own Social Security estimates. Do it now. It’s free at the Social Security Administration<\/a>.<\/p>\n

Let’s say you came up with a figure like $25,000 a year in Social Security income. You know your post-work life is going to cost you about $50,000 to pull off.<\/p>\n

Yes, you can retire<\/h2>\n

That means you need $25,000 in regular income. Assuming a 4% withdrawal rate, you now know you need $625,000 to retire. That’s a lot less than $1 million.<\/p>\n

If you’ve been saving into a 401(k) plan<\/a> for a few decades, even modestly, you might be closing in on your retirement number early! But let’s assume you are short.<\/p>\n

No need to panic. Just amp up your savings rate and aim to work a few years more. The important thing to remember is that money compounds. If you can take Social Security and work part-time, your private savings plan has time to grow.<\/p>\n

A retirement plan with $300,000 in it could double in value in 10 years if properly invested, and faster if you make larger contributions along the way. Making your retirement number appear<\/a> is just willpower and planning.<\/p>\n","protected":false},"excerpt":{"rendered":"

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