How Much Money Do I Need To Retire
Retirement is an amazing part of our lives; we get to seat back and enjoy the fruits of our labor. However, enjoying these fruits needs money, and it’s money that comes from your pocket. As such, one of the main factors to consider when deciding how much you need for your retirement is at what age you intend to retire. The earlier you retire, the more money you will need to support yourself without a salary and as a general rule the longer you wait to retire the less money you’ll need to save.
Notwithstanding, your retirement age is not the only determinant of your kitty, here are a few factors you might need to give some thought to:
- Do you intend to live a modest or flashy lifestyle? It goes without saying that you need to save more to live better.
- Will you have any children in college whose fees you need to pay, if so you’ll need to save for them too.
- How long do you think you’ll live? Really strange question! But seriously, if you have a chronic disease then unfortunately your life expectancy is reduced and hence you may need less money in the future.
- Are you in debt? If you have a mortgage or credit card debts, then you need to pay them off the soonest possible because one way or another you will need to pay your debts and you really don’t want to do that from your retirement money.
- Last but not least; at what age do you intend to start saving? Rush, rush, rush; the longer you wait to start saving the larger the chunk of your salary that you will have to commit to your retirement kitty.
Having said that, as a general rule it is advisable to ensure that by the time you hand over your desk you have saved at least 8 times your final annual salary.
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