I earn over $100,000 a year and spend approximatley $70,000 a year. I have been working on that salary for last 8 years. I am 32 right now and am saving / investing the rest $30,000 a year. When do you think I must stop working / saving and retire. How much money is enough to live your normal retired life? And what if I retire by the time I am 42? Shall I do it earlier than that or Later than that ?
2006-10-10 17:08:45 · 4 answers · asked by AMAZING 1 in Business & Finance ➔ Personal Finance
My Friend,
Work till you can - till you enjoy it. There is no Maximum Age. And the day you dont enjoy your work - stop it. You might end up doing something good.
Second thing you should do, is that work till you are physcally able to. Even if you are 80 and if you are able, and enjoy your work or dont get stressed out - then go for it.
2006-10-11 02:48:28 · answer #1 · answered by Anonymous · 0⤊ 0⤋
That depends upon what standard of living you desire. Spending 70% seems like a lot when you are earning that much money. Your standard of living must be that high or you are very frivolous. The average inflation rate is near 3%. How long do you think you will live? I suggest that you talk with a retirement planner. Answer these questions. Generally the higher the standard of living you wish to maintain and the longer you expect to live, then the more money you should save/invest and the longer you should save/invest. Put another way, I could retire at 45 with your plans. You cannot. We have different standards of living and different ages.
2006-10-11 00:21:01 · answer #2 · answered by Jack 7 · 0⤊ 0⤋
My first question is what does retirement mean for you- travel, financial freedom, living off of interest, never working again, getting fat in a rocking chair, or finally being able to go on a mission trip?
When you can wake up one day and say "I don't have to go to work to enjoy this level of peace and comfort", you can call that retirement. It is possible for you to go to a third world country, and find out that you are already wealthier than 90% of the world's people.
Retirement may be a state of reality that you must change your expectations to pin down.
I believe you should always do what you love doing, whether you are paid well for it, or not.
Do what you love to do, and find a way to make it pay!
You need to be specific about your goal of retirement. I have had too many friends die six months into retirement, because they lost their self-worth.
Some people never retire. They just go on loving what they do, making huge contributions to the world.
2006-10-11 00:23:02 · answer #3 · answered by Lion J 3 · 0⤊ 0⤋
If you had $1million today, you could most likely withdraw $40,000 annually (taxable gross) and adjust this upward for inflation for the rest of your life.
If you'd like to withdraw $80,000 (pay taxes) then you'd need $2million today.
Every year that you wait, you'll need to adjust your nest egg goal up by about 3% or 4% for inflation. In 10 years, you'd need about $1.5million to generate $60,000 income (which will roughly equate to what $40,000 is today).
The 4% spendrate assumes you have a well diversified portfolio.
2006-10-11 09:25:51 · answer #4 · answered by derek 4 · 0⤊ 0⤋