At some stage of their life nearly everyone asks themselves the question “how much money to retire?”
If you think you won’t have enough you'll join the 96% Club!
Many find that they’ll probably never have enough and will join the 96% of others who are in the same boat!
The 96% Club.
Many people are planning to retire but how much money is enough?
There are very few people who won't have to make significant lifestyle adjustments when they stop working. So don't get despondent. Don't come down too hard on yourself!
How much will you have?
The first thing you need to do in calculating how much money to retire is to estimate what you will have available when you stop working.
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There are some great retirement planning calculators on the internet.
Follow the instructions carefully. In most cases, these tools will tell you how much of your current income you need to save for the remainder of your working life to provide you with a percentage of your current income when you stop working.
Some of the better one's even give investment options to assist in this process.
After this first step you know (based on how much of your current income you can invest) what your savings plus investments are likely to yield when you stop working.
How much will you need?
The next thing you need to do in working out how much money to retire is to estimate what you will need every month. Take into account the lifestyle adjustments you plan to make when you stop working.
If you do this exercise realistically, you will now have an idea of by how much you need to supplement your income when you retire.
Now your focus needs to be on looking at all possible ways to balance the “how much money to retire” equation. You need to “bridge the gap” between the estimated income and your estimated monthly cost of living.
Bridge the gap
Here's the really good news – there is A LOT that you can do to supplement your income.
Firstly, the question of how much money to retire can be addressed by looking into all possible grants for senior citizens. Depending on where you live in the world and depending on your financial standing. Most countries have some form of old age relief for their citizens
As small as these amounts of money may be, every little bit will help!
Next, do an inventory of all the “stuff” that you have accumulated over the years. You’ll be surprised how many non-essential things we drag around with us wherever we go. Some of these items are possibly valuable to someone else so clear out the attic and the garage. Secure some extra cash for when you retire.
“Travelling light” should alleviate some concerns over how much money to retire.
As the next part of the how much money to retire question, look into all opportunities for part time work. There are placement agencies that specialize in part time work for senior citizens.
Besides the financial benefits of working. More than likely you’ll go crazy if you sit around doing nothing all day. Part time work is great because you still have plenty of spare time to do the things you enjoy.
Finally, there are literally thousands of “work from home” opportunities available these days. If you are proactive and positive there is absolutely no reason for having to battle and scrape for money in your old age – take control, take responsibility and reduce your stress levels regarding how much money to retire - go for it!
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Plan of action to ensure you'll have enough money to retire ... to be one of the 4%!
- Calculate what you'll have
- Calculate what you'll need
- Calculate any gap
- Decide on your gap plan
- Get to it!! Life rewards action!!