Retirements Savings-How Much Do I Need?
We mentioned last week several publications are helping us crunch "The Number". This is the amount we'll need for a secure retirement. This magic amount is often debated by financial planners and can be a lofty goal for most of us trying to prepare for retirement. This month's Kiplinger Magazine presents their savings plan.
THE NUMBER | Start with the rule of 25 A conservative rule of thumb suggests that if you withdraw only 4% -- or one twenty-fifth -- of your retirement nest egg during the first year and adjust subsequent annual withdrawals to compensate for inflation, you'll never outlive your money. Another approach is to estimate how much you'll need to withdraw from savings during your first year of retirement and multiply that amount by 25 to determine your target number. For a bare-bones budget, you'd need only half as much, or 12.5 times your initial withdrawal. Your personal number is probably somewhere in between.
Wise Owl