How much more do I need for retirement

All the retirement planning calculators I have seen try to answer -”How much do I need” question. Some assume a percentage (say 80%) replacement levels of last income or others begin with your current expenses. ¬†Undoubtedly both methods throw a very large depressing number.

The question which you are better off asking is – If I were to retire now, what will I have every year and work on increasing this number. eg) If your retirement accounts plus investments are worth $100,000, assuming a 3% draw down for perpetual income – you are already ready to retire now at a draw down of $3000 per year!

This is a “glass is half full” view of the problem as against a “glass is half-empty” view. Of course, you may choose not to retire as $3000 is too low, but this can be more inspiring – ¬†can you set a goal to increase this to $4000 a year?

3 thoughts on “How much more do I need for retirement

  1. I agree with Ramesh’s comments – especially, early retirement can only be a dream when you have kids in college in the United States!

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