I came across this blog, (click here) written by a certified retirement dreamer, that in order to retire, you need this:
Decide How You Want to Live in Retirement
The next step is to decide if you want to live on less in retirement, as traditional retirement planning suggests. For simplicity, let’s say you live on $10,000 a month now. Without work related expenses, you’re happy to plan on income of $9,000 a month.
Living on less doesn’t sound too good to me. But shifting your thinking to priorities, conscious decisions, and having funds for life without fear can feel pretty great.
Really lady? You can’t imagine living on $9,000 a month, when you’ve been accustomed to $10,000 a month? Who are your clients? Are they listed in the Forbes Top 500? Because I don’t know if you heard, but most Americans can’t even afford to come up with $400 cash in an emergency. That’s 4 in 10 working Americans (click here) who don’t have cash let alone have enough funds to hold them in any form of retirement!
Which brings us to the author’s Rule Of 25:
Rule of 25 Retirement
When estimating how much money you need to retire, you can stop right here if you want and take a shortcut with the Rule of 25.
This rule simply takes your annual expenses and multiplies them by 25 to get the amount of money you need to retire. (I cannot find the name of the actual creator of the 25x retirement rule to give credit.)
With the Rule of 25, if you spend $100,000 a year, you’ll need $2.5 million to retire, for example.
So everybody, you need $2.5 million dollars socked away if you want to continue living on $100,000 a year in your retirement. I wouldn’t even know what to do with $100,000 a year in my retirement. WTF are you doing people? How do you spend $10,000 a month? How many vacations can you go on? How many Mercedes can you drive? How big is your home? Shouldn’t your mortgage be paid off by now? What the heck are you doing? I’ll never know. I only know one person who lives on $100,000 and that’s my sister. And she’s ALWAYS broke!
I need between $25,000 to $30,000 a year to live my comfortable, affordable, happy life. Once we are fully retired in less than 3 years: Social Security for two, One pension and interest earned off our investments will net us a comfortable $42,500 annually. In other words, hubby and I will be doing better in retirement than when we were working. We ain’t no millionaires. All together, our total assets only come to around $650,000 (most of this is our home) if we were to liquidate. But we have no intention of doing that ever.
My retirement advice has always been the same: buy a home, preferably no later than age 35, get it paid off before you turn 65. Never take out the equity. Let the home do your retirement savings for you. Buy a home you will stay in for like forever, do most of the upkeep, maintenance and repairs yourself, all the while knowing you are building equity to fund your retirement years. Try to have at least $260,000 saved to cover your Medicare co-pays over the next 20 years after turning 65. Make sure you work the 35 needed semesters to qualify for Social Security and Medicare. Those programs are NEVER going away.
Don’t let the experts scare you. Your retirement is possible and doable. You don’t need millions to make yourself happy. You need a roof over your head, food on the table, medical coverage, money saved for emergencies, good friends and a family who loves you. And God. Never ever forget about the blessings our good Lord bestows upon us. He’ll make sure we get through our retirement years safe and sound!