How Much Money Do I Need To Retire?
Are you thinking about, how much money do I need to retire? There are many different factors, including when are you planning to retire and how much you spend. Because of these factors, knowing what you need to retire is not a simple answer. But you can get an idea but doing a few simple calculations.
The 4% Rule
According to the 4% rule, you can withdraw 4% from your portfolio in the first year. Afterwards, in future years you withdraw the same amount plus the adjustment for inflation. This will help you decide if you have saved up enough money to cover your desired income level in retirement.
The Rule Of 20
This rule suggests that for every $1 of annual retirement income you would like, you’ll have to have $20 saved up. So if you’re looking for $20,000 over and above CPP and OAS, then you’ll want to have portfolio worth $400,000 by the time you retire.
The 10% Rule
The 10% rule tells us to save 10% of our gross income towards retirement. This will give us a retirement income equal to what we’re used to now.
The Rule Of 72
You can find out how long it should take to double your money with the rule of 72. Fir this calculation, you divide 72 by your expected return. so a 5% return would take 14.4 years to double your money. Of course with this rule, you’ll need to have a realistic percentage you expect for a return, you can’t always expect double digits in every single year.
So, how much money do I need to retire?
We hope that the above retirement calculations will help you see what you’ll need to save to have the retirement you’re looking forward to. Use these calculations and you’ll likely be pretty pleased with how easy it can be to retire comfortably with just a little planning!
