How much money does a person need to have in the bank today to be able to retire and not work anymore just living off the interest?
2006-09-20 08:50:32 · 5 answers · asked by Anonymous in Business & Finance ➔ Careers & Employment
It depends on a lot of factor, namely, how much to you need per year and how much do you think you can earn. Inflation also matters.
Normally, you will need between 70% - 85% of your current income (hopefully you won't be saving for college or paying a mortgage). So, if you currently make $100K, you will need $80K per year in retirement. Let say you will make a 5% return (safe return). Take the $80K and divide it by the 5% return, and you get $1,600,000.
Hope that helps.
2006-09-20 09:01:57 · answer #1 · answered by Jordan K 3 · 0⤊ 0⤋
Depends on a number of factors:
a) Your lifestyle
b) Number of dependants that you have
c) Your living space, if you have a house or not
Please note these factors are important while making any such decision because you have to ensure that whatever you save up matches or exceeds the rate of inflation. There is no defined number that you can put on it.
Plan wisely and good luck !!
2006-09-20 09:00:33 · answer #2 · answered by bostoncity_guy 2 · 0⤊ 0⤋
Trick is to invest in assets that will keep on generating funds, like giving a house on rent. Interest wont suffice.
2006-09-20 08:59:21 · answer #3 · answered by cuteteddy761 2 · 0⤊ 0⤋
the question is a "present worth" "future value" problem.
look up "present worth equation"
plug in for interest rates
the question is really:
how much do you want to spend?
what level of standard of living do you want?
2006-09-20 09:01:12 · answer #4 · answered by 987654321abc 5 · 0⤊ 0⤋
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2006-09-21 02:03:42 · answer #5 · answered by Swarna k 2 · 0⤊ 0⤋