RETIREMENT
MONEY - SAVING PLANNING
ADVICE TIPS GUIDE STRATEGY - PRACTICAL ADVICE
FINANCIAL PLAN IDEAS EDUCATION FREE ARTICLE
INFORMATION
It is
important to estimate how much money you may
need for retirement.
HOW
MUCH MONEY DO I NEED TO RETIRE?
How much
money do I need to retire is the question
everybody wonders about.
The right
answer is down to lifestyle and how much you
need to service that lifestyle. If you need
$100,000 per year to live then the amount of
money you need to retire is far greater than if
you need $50,000 per year to live. If you only
need $20,000 to year then you will need far less
money.
MONEY
NEEDED FOR RETIREMENT
The basic principle behind retirement is
to end up with a large nest egg that is invested securely and provides an
income stream for you. As an example if you have a nest egg of $500,000 and
it is invested in a moderate investment returning 5% per year then you will
get an income of $25,000 per year without touching your principal.
Some high yielding income funds can pay up to 8% that would give you $40,000 per
year without touching your principal. However, higher yielding investments tend
to carry more risk so your principal is not as secure as the lower yield
investment.
For many $500,000 is a lot of money to have at retirement, especially if you do
not have much disposable income. The way to get to sums like that is through
home ownership. Mortgages take between 20 and 30 years to pay off. When you have
paid them you own the house. The house is an asset. Hopefully when you reach
retirement age you can either sell your house or free up equity in the house to
fund your retirement. Your house is your retirement plan.
The secret is to find investments that pay out income streams that do not affect
the principal. If you are lucky find a good investment that even shows some
capital growth. That means your income stream will increase every year. If you
spend your principal amount during retirement then you will run out of money. If
you run of money then you clearly did not have enough money to retire. So
estimate your retirement needs, and plan wisely.
To
teach and learn money skills, personal finance, and money
management, please go to the Money
Instructor home page.
Save for retirement and
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Retirement and Money Information
It is
important to estimate how much money you may
need for retirement.
To
teach and learn money skills, personal finance, and money
management, please go to the