Simple Formula

by Lois Etienne on April 23, 2012

in Insurance,Legal,Lifestyle,Senior Health and Safety

Since we just passed tax season, I thought this was an appropriate endeavor.

Have you ever tried to figure out what kind of money you need in retirement to be able to live the kind of life you want to? I heard a pretty simplistic explanation, but here it is: For every $1 million you have saved, you can probably have a withdrawal rate of about $40,000/year.

Now that’s really a simple answer and certainly not entirely accurate but helpful none the less. But it’s also overwhelming. How many people can even wrap their heads around having a million dollars saved by age 65? I dare say, not most Americans. I think having a mortgage payment is praised by some investment authorities and having your house paid off is praised by others. But one of the keys to a successful plan is not having much, if any, in the way of debt, especially things like student loans for your kids and a new car every other year.

I don’t know if I’ll even live to see 65, let alone 85 but we all have to plan like we will because the one thing you don’t want to do is to have to rely on the government for your later years. The only reason I say that is because your choices are so limited when you are depending on someone else and I know the baby-boomers; we don’t want anyone else telling us how to live!

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