How much savings do you need to retire at 40 (in the US)?

Question

My wife and I are 34 and have had a lot of personal success. We would like to stop working if we don't have to. What tools would you use to decide? I am curious what dollar amount would make someone feel comfortable retiring at 40.

Answer 1

go to an Edward Jones advisor where you live...they give the first consultation for free.

Answer 2

yonitan may be correct. First you need to decide how much income you need a year to live like you want. I have known people who built their own home and bought a new vehicle, got everything paid off and are living on less than $15,000 a year from a CD at a Bank. Some do work part time for something to do and a little extra cash. So, you need to talk with someone as another person mentioned that can help crunch numbers for you and possibly manage your money to make better than a bank CD. A good Money Manager should be able to make you 10% annual return on your investment easy.

Answer 3

Did you just fall into money?

I would hope someone who could generate an abundance of wealth at your age would have the wisdom to not ask a Yahoo MB for advice.

With that said, that answer depends on about 100 variables. Do some research on your own. Buy a book or consult a real financial advisor.

Considering you asked that question I'm assuming you didn't make this money in the financial industry. Make the surplus of money you have work for you. Many ways that can be done, not just in the stock market.

Cheers

Answer 4

To answer that question you have to make some assumptions:

+ how long will you live?
+ what will your expenses be?
+ how much will your expenses increase due to inflation?
+ how much will your investments earn?

If you assume you will live to age 100, your investments will earn 5% per year, and that your expenses will increase by 3% per year then you need $410,754 at age 40 for every $1,000 of monthly expenses in the first year of retirement. So if you plan on spending $4,000 per month you need to start with $1,643,016.

This calculation assumes the expenses include any taxes to be paid.

Answer 5

For every million dollars you have, you should be able to generate approximately $40,000 to $50,000 in annual income.

How much income do you need/want. If you need/want $80,000 to $100,000 then you'll need approximately $2million.

Over the next 6 years, these numbers shouldn't be all that effected by inflation (maybe another 20% or so).


(this assumes you invest in a diversified portfolio and earn approximately 7% to 9% so you can increase your portfolio and income for inflation. It also assumes that you will have no income from any sources other than your portfolio).

Answer 6

I think the retiring age is about 65...here is some information. I suggest you read it...I will paste the link.

It pays to stay on the job
Delaying retirement for a few years can boost your Social Security benefits and reduce the amount you need to save to create sufficient retirement income for life. Consider how a married couple in their early 60s earning $77,000 per year -- roughly the median pretax income of married households ages 55 to 64 in 2002 -- can cut their savings needs by 40% if they delay taking retirement for four years, until age 66.

The longer you work, the less you'll need to save
Current salary Current salary after taxes Age you retire 80% of after-tax salary Annual Social Security payments Potential income gap to be funded by assets Assets needed to produce income through annuity
$77,000 $58,650 62 $46,848 $20,088 $26,760 $510,757
$77,000 $58,650 66 $46,848 $27,648 $19,200 $298,380
$77,000 $58,650 70 $46,848 $38,136 $8,712 $298,380

Source: Fidelity Investments.

Answer 7

i imagine it relies upon on the concern... For starters, even with the indisputable fact that, there aren't any constitutional amendments protecting adult males from some thing or giving adult males the right to some thing specially. Now this may recommend that adult males are the dominant element and performance to be saved "in examine" or it might want to point that there is a psychological element at play in society that asserts women individuals are "weaker" and favor safe practices. i'm prepared to guess, you'll listen both fringe of the argument with a variety of of caveats to accompany those arguments. we've an section newspaper (The Westword) that lately printed an editorial about a guy suing nightclubs over the well-loved women' nighttime that continually takes position on Wednesdays. His declare develop into that women individuals get free beverages from adult males via the indisputable fact that's, so why is there discrimination antagonistic to adult males on Wednesday nights allwoing women individuals to drink free and not in any respect pay a canopy charge. (The bonehead is yet to win a case...) there is easily different parts to analyze: payscales, gender-particular careers, maternity vs paternity leave, and so on. i imagine we stay in a extra equivalent society than individuals are prepared to admit, yet on a case through case diagnosis, i imagine you'll see both genders dealt with unfairly.

Answer 8

People generally say that to retire at 65, you should have 500k saved. Since you'd like to retire at 40, I'd say you need more .... obviously quite a bit depends on what type of lifestyle you lead as well.

What is it that you do, if it's not too impolite to ask?

Answer 9

look at the changes in interest rates over the past few years and try to calculate what dollar amount you would need in order to generate enough interest for you to live on. you would want to go with the safest savings scheme with the highest possible return on interest. that way, you will keep your nest egg and be able to have extra money when needed, then sit back for awhile and recouple the original balance.

Answer 10

You would have to factor in your daily, monthly and yearly living expenses (food, gas, electricity, home, car)... Then you would have to factor in all of the unexpected (natural disaters, car break down, household appliences break) .... Then you would have to factor in leisure cause I am sure you won't sit in the house day in and day out... so you have to factor in your hobbies... Get an average total and add a couple thousand to that and then figure out how long you two will expect to live and multiply that by the amount of $ you spend in a year and you should have your answer.