Boy, I tell you what: “How much do I need to retire comfortably” if this isn’t the million-dollar question in my line of work, I don’t know what is. Every client that comes into our office asks this question, or something similar, particularly when we add the word comfortably. The reason this question can be tricky is that everyone defines comfortable in a different way.
Expenses
When we are looking at how much a person needs to have in order to retire comfortably, there are many factors to consider. Some of the biggest and most important factors are, of course, the client’s goals and intended retirement lifestyle. If the client would like to travel the world (perhaps by boat?), help their children or grandchildren out financially, live in an expensive house in a prestigious neighborhood, maintain a country club membership, or any other costly desire, the higher their expenses will be in retirement, and so obviously they’ll need more income and assets to support what they define as being comfortable. These living expenses, these goals and desires, are the single most important factor in determining how much a person needs to retire.
Free Retirement Video
I recommend you watch this video I recorded that goes through how to avoid running out of money and increase your retirement income. You are also invited to set up a short 20 minute free no cost and no obligation Retirement Ready Success call by clicking here. In this short call we will
- go over where you are now,
- where you want to be,
- and I will share with you some of the strategies I use with my clients to help them achieve financial freedom and peace of mind.
Income
Another key factor that we look at is the person’s income. Do they have a pension? How much is their Social Security payment going to be? What other forms of income will they have once they retire: rental income from homes that they own, or an annuity that they may have purchased years ago? The next piece of the puzzle looks at their current income, as well as how much income they can expect to have coming in to support their their definition of a comfortable lifestyle, based on the goals we’ve already discussed.
Assets
The final piece of the puzzle is to look at their assets. How much do they have in Roth IRAs, 401ks, IRAs, brokerage accounts, precious metals, real estate, and any other type of investments, such as hedge funds and private equity, the other types of investments that they may own, particularly if they’re accredited investors. Once we have all that information, we’ll use those assets in our plan and look at how much we’re going to have to draw those down. That will let us see if they’re going to have enough to make it to the target age, which is typically anywhere from 85 to 95 with most of our clients.
I hope this gives you a good basis to start answering the question of how much do I need to retire comfortably.
Click here to watch my Free Video Presentation that Reveals…
How To Avoid Running Out Of Money In Retirement AND Potentially Increase Your Income In Retirement… By Making ONE Simple Change To Your Finances! You will learn:
- How one simple change to your finances can increase your retirement income
- How one simple change to your finances can help you avoid running out of money
- How to do all this without needing to invest more money or spend more time on your finances.
Or you are also invited to set up a 20 minute free no cost and no obligation Retirement Ready Success call by clicking here. In this short call we will
- go over where you are now,
- where you want to be,
- and I will share with you some of the strategies I use with my clients to help them achieve financial freedom and peace of mind.