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Do You Have Enough to Retire?

There is an ongoing debate over how much you really need to retire comfortably. A few years ago, that number was $1 million. Now, some say it should be $2.5 million or even $4 million. If you want to live luxuriously, you can move the number up to $30 million. Yet, how realistic is it for someone who earns $50,000 annually to save $35 million? So, the number really depends on your needs, where you live and how much you spend.

How Long to Retire?

How long you retire depends on when you decide to retire. You could be like Tim Sykes and create a multi-million dollar blog and retire as soon as you like.

If you retire at 67, then you should factor in another 25 years of life–just to be on the safe side. So, how much will you need annually to live comfortably?

Consider the fact that you won’t have to commute to work which means less money spent on gas and car maintenance. If you really want to cut down on expenses, you might sell your car and use public transportation or ride-sharing services instead. This means you no longer have to pay insurance or a car payment.

Plus, many grocery stores now offer delivery so–life can be quite convenient in retirement. So, what is your annual number? $40,000? $50,000? $75,000? Then, multiply that number by 25 years.

You Must Know How Much Money You’ll Need

It’s hard to feel secure in retirement if you don’t know how much money you’ll need. On average, most people have around $400,000 saved for retirement. This is probably why many people are putting retirement on hold.

It is important to make sacrifices now while you are still in your working years. Once you get past 65, it becomes much more difficult to find consistent work. Plus, you never know if you will have any health issues then as well. It’s also important to cut expenses now so that you don’t outlive your assets.

Plus, many retirees tend to spend lavishly during their first years of retirement only to have to cut down spending towards their last years of life. You should also factor in the potential for health care costs and other expenses.

Location

Another factor is where you live. Most retirees move to more affordable cities, with good health care systems to maximize their available funds. Some even move out of the country to really inexpensive cities in South America.

To illustrate, it would be difficult to retire comfortably on $1 million if you live in New York, Los Angeles or San Francisco. You would need much more than $1 million. So, you have to consider where you can afford to live.

There are many retirement-friendly communities throughout the world that are cost-effective and enjoyable.

Early Retirement?

This is a question many ponder. Can you afford to retire early? If you retire before Social Security and Medicare come into play, then even $1 million in your bank account can be extremely risky.

If something goes wrong, you have few options. Sure, you can move to South America and each tacos every day, but what if you have family and grandchildren in the U.S.? What if you change your mind? This is why it is important to have enough for flexibility and financial independence. Y

You’ve worked hard all of your life. You now deserve to do what you want within reason until you leave this earth. If you are forced to get a job, then you didn’t make a good plan.

In Conclusion

Retirement planning varies per person. Factors such as health and location should be incorporated into saving and investing. Remember, you only have so many years to work.