Hello:
I'm 42 end of this year. I have two kids 10 & 13 and their college $ is largely saved already. Wondering how much I need to reasonably retire at 45? By then my kids will be 13 and 16. I also have a wife who makes virtually no money.
2007-01-30 05:45:38 · 8 answers · asked by Anonymous in Business & Finance ➔ Careers & Employment
at least 1 million $ in liquid assets
CD'S, T bills, money market, 401k and IRAs
most of them that you don't touch so you can comfortably life off the interest
2007-01-30 05:51:48 · answer #1 · answered by Mopar Muscle Gal 7 · 0⤊ 1⤋
You probably want to replace your income and make sure it grows over time so the inflation is taken care of. How much can you effectively make off your money? Say 7%? Ok, than take your income divide by 7% and increase that amount by 30%, so you don't take all earnings out, to allow for some growth.
Well, if you make 150K per year, then the calculation would work as follows: (150,000 / .07) * 1.3 = 2,790,000
You need about 2.8 Million dollars in cash, not counting your house and other stuff. This will ensure that you keep taking your salary out and yet the money grows at some reasonable rate to keep you going. You probably will not need your full salary, since you probably spend less if you don't have to go to work, you don;t have to drive or take bus/train, you don't have go out to lunch or bring one with you, so technically your expenses will be less, although you will probably tend to take longer and more frequent vacations -- this will cost more.
Anyway, you got my idea.
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Sorry I just corrected some arithmetic error..
2007-01-30 13:58:58 · answer #2 · answered by Alexander K 3 · 0⤊ 0⤋
The common way to calculate the amount you need to retire and live comfortably (comfortably means no expensive cars, extravagant trips, etc) is 85% of your salary times the years you are expecting to live plus 5 years
So, if you are 42 and you expect to live 35 more years, then you take your salary now and multiply it by 40 and that is how much you need to retire. (If you make 100K a year, then you would need 3.4 million in cash, not assets to retire)..This also assumes that your home is paid off....if not, then you will need additional funds before retiring comfortably and pay your mortgage
2007-01-30 13:52:26 · answer #3 · answered by angihorn2006 4 · 0⤊ 0⤋
old rule of thumb is a million by age 65. 45 is pretty dicey, depends on what you contemplate for a lifestyle, but I'd guess at least 3 million at 45.
2007-01-30 13:57:19 · answer #4 · answered by jim06744 5 · 0⤊ 0⤋
I would think at least $ 6-9 Million
2007-01-30 13:49:39 · answer #5 · answered by Anonymous · 0⤊ 1⤋
As much as you can save.
2007-01-30 13:53:22 · answer #6 · answered by Princess S 2 · 0⤊ 0⤋
It depends on the quality of life you expect to live and approx. how long you want to live it.
2007-01-30 17:10:38 · answer #7 · answered by bajllc 2 · 0⤊ 1⤋
Be a man do it till it kills ya
2007-01-30 13:51:04 · answer #8 · answered by utlcutl 3 · 0⤊ 1⤋