Can I retire yet? Or do I have to work more?

Question

What would be the minimum amount of retirement money, per month, where you could say, okay...now I'll put my feet up and just live.

Answer 1

For me personally, I could easily be comfortable with an income of $3000 a month., since I wouldn't be paying any income taxes or have to contribute anything to savings or have any debt payments (including my mortgage which I'll have paid off well before retirement). That amount would have to increase with inflation, though.

On $3,000 I could eat out regularly, go to the spa every 2 weeks, travel, and generally be very comfortable, shopping whenever I wanted to.

Answer 2

Sure, you can retire any time you want. You just have to make sure you either have enough money to pay the monthly bills or if you want to become indigent and live in a cardboard box somewhere warm.

There are retirement calculators out there so do a google search and put in your numbers and see if you're able to retire.

My dad retired at 62 and had to pay lots to carry his insurance until Medicare kicked in at 65. Even when that started he still had to pay lots for supplimental insurance and meds.

Answer 3

When I first read your question, I thought you were asking how much you need in a retirement account to be able to retire. That answer is after the dashes. Now, I think you are asking how much income you need. The answer to that is obvious. If you are happy with your current lifestyle, then you need enough to cover all of your current expenses. If you want a better lifestyle, then you need enough to cover your current expenses and the cost of the increase in lifestyle. Good luck with your decision.

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Here's the key to having enough to retire on. You have two choices, (1) using capital or (2) growing capital. What this means is that once you are retired you will be doing one of two things with your retirement account. Using capital means that you are spending more each month than you recieve (on average) in interest. Growing capital means that you are making more each month (again on average) from interest than you are spending.
Dependig on what you want to do depends on how you calculate whether you have enough money. Personally, I want to be able to grow capital. Why? Becuase (1) it doesn't matter how long I live after I reitre, and (2) I want to be able to pass my financial security on to my wife and/or children when I die.

If you are in the growing capital scheme, here's the calulation
x = amount needed to retire (actually you need more than this amount to actually grow your capital, this amount will only keep your capital a constant value)
i = annual interest rate you currently recieve on your investments (on average)
n = inflation (I use 3%, but 3.5 or 4 would be more conservative)
c = your personal cost of living on a monthly basis
x = (c*12)/(i-n)

As an example, if you spend $5000/mo in living expenses, and get an interest rate of 8% annually, you'll need $1,200,000 to retire. $1.2M = $5000*12/(.08-.03). If you only get a 5% rate of return, then you'll need $3M. Also, you can change from a 3% assumption on inflation to be more conservative. 4% should be plenty. So, at 8% return, you would need $1.5M. You get the idea.

If you are trying or willing to opt for the using of capital, then it's a lot more complicated. You are more or less amortizing your capital over the number of years you are expecting you will live.
If you want to know exactly, use an excel spreadsheet to simulate this, or an on-line mortgage calculator (the mortgage amount would be your savings, the payments are what you live on, and the interest rate is your interest rate minus inflation).
To give some idea:
let C=your monthly cost of living.
With an 8% rate of return and a 3% inflation rate,
It takes ~100 times C to live for 10 years,
~150 times C to live for 20 years
~185 times C to live for 30 years
~205 times C to live for 40 years
and
~220 times C to live for 50 years.

Most people probably aren't going to retire using this scheme while expecting to live more than 50 years, so those numbers should give you an idea of how much capital you need to retire on. Realize that 240 times C or more would put you into the "growing capital" regime. Again, I would aim for this, then it doesn't matter how old you get (or are).

Answer 4

Well, that depends a lot on:
- where you live (San Jose, New York City, etc. cost WAY more than somewhere like Battle Creek, MI or Ardmore, OK)
- what kind of lifestyle you have (if you drive a Lexus and dine at Ruth's Chris, it will cost WAY more than if you drive a Chevy and cook for yourself)
- what you will do with the extra time you have (if you're going to travel the world, it will cost WAY more than if you're going to stay at home and watch soap operas and game shows all day)

So, you first have to calculate what you spend in a typical month. A personal finance program like Quicken or Microsoft Money can help you track that - or you can do it by hand. Then estimate how much (if any) more you will spend on retirement activities (like travel).

One you know how much you need to spend, subtract out any regular monthly income you get (e.g. Social Security checks). Then you know how much you need to get monthly from interest, dividends, stock appreciation, etc. Multiply that number by 300 to find out how much money you need to have saved in order to be reasonably sure that your savings will last long enough to support you for the rest of your life. So, for example, if you expect to spend $3000/month, you will need $900,000 in savings and investments in order to provide that much income.

Answer 5

Depends on each individual person. I will be happy with about 11 million - other people want 1 million. Do you want to get out and travel well or would you rather sit around your home and take it easy? You also have to consider health insurance needs.

1 million minimum in my opinion.

Answer 6

A simple formula : Take any amount, divide it by 2 and then drop a zero.

We will do ONE MILLION for the example :
$1,000,000.oo divided by 2 = $500,000.oo DROP a zero = $50,000.oo.

Can you life off $50,000.oo a year?? If so then you will need to have one million dollars in an investment account and NOT a bank savings account.

Simple simple!

Answer 7

i guess that depends on your living conditions! if you are used to living rather well, then u would need to make what u made while u were working or more. so, the min. amount u would need to receive is what ever u need to live how u want to live!!!!

Answer 8

IT DEPENDS WERE YOU LIVE FOR A START.AND WEATHER YOU OWN YOUR PROPERTY OR RENT IT. YOU NEED TO WORK OUT HOW MUCH YOU SPEND IN A MONTH ,THEN YOU WILL KNOW HOW MUCH YOU WILL NEED TO RETIRE.

Answer 9

guess that depends how comfy you want to live, how much rent/mortgage you gotta pay, bills etc....all depends on your lifestyle really....good luck

Answer 10

First you have to be old enough and I don't think there is a min.amount of money.