Jan 9, 2020
This week, the theme is how much money do you need to retire?
Each day this week, I’m breaking down this really big and important question into bite-sized pieces to help you better understand what it will take to retire with confidence, why the answer to this question is different for everyone, and how you can answer for yourself: How Much Money Do I Need To Retire?
Today, I’m talking about my favorite shorthand way to figure out how much you need to retire. Several years ago, research by Fidelity Investments concluded that by the time you retire (assuming you retire at age 67), you’ll need 10x your income saved for retirement.
So if your household income is $100,000, you’ll need 10 times that, or about $1,000,000 to retire. If you make $200,000 you’ll need $2 million, and if your household income is $60,000, you will need much less - about $600,000.
While there are some limitations to this number as I discussed on Tuesday of this week, since the size of your nest egg is determined first and foremost by your income needs, their findings are useful especially when you’re farther out from retirement.
In addition to their 10x findings by retirement, they provide some guidance to help you see if your on track even if you’re still in your 30s or 40s. They found that in order to be on track for retirement and that 10x figure, you should have 3x by 40, 6x by 50, and 8 times your income saved by age 60.
That’s it for today, but before you go, would I be correct in saying that your retirement is perhaps the most important financial decision you’ll ever make? There are quite a few irreversible decisions tied to your retirement - everything from your retirement date to your social security filing decision will have major long-term consequences.
You want to get it right. Well, so do I. For the last 12 years, I’ve been helping clients just like you make the transition into retirement. If you want to talk one-on-one with me about whether or not you can retire, head on over to truenorthra.com, where you can book a 15 minute call with me, at a time that’s convenient for you. The call is confidential, free, and I promise to help guide you on whatever is weighing most on your mind right now regarding your retirement. So head on over to truenorthra.com and book a call today.
Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.
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