I have 125,000 in RRSP's andd 25,000 in Stocks. I have two businesses worth about 1.2 million. I am selling one of them and I will make about 250,000 from it. I am sick of the rat race I am in and am wondering how much I will need to retire or semi retire?
2007-08-13 11:50:08 · 6 answers · asked by NFLDER35 1 in Business & Finance ➔ Personal Finance
I am almost 35, own my home with no mortgage, and own a small but grow internet company. The way I see it, with a non leveraged business that produces 85 - 100 K per year with about 40 hours a month in management, isn't that kinda like retirement (semi-retired) already? I would think one of your businesses income would sustaine you just fine, unless the workload is to demanding to sustain it then maybe youshould look into a business that requires less time to operate. At 35 1.2 million in savings isn't enough in my opinion to enter a secure retirement. Good luck, let me know is you have any other questions.
2007-08-13 13:02:57 · answer #1 · answered by Russ D 2 · 1⤊ 0⤋
How much do you need to retire?
Too many variables to answer that question. But, here is something that I use to determine how much I need in investments to retire.
If you invest $1,000,000 (one million) in a tax free municipal bond fund that pays an average of 5% a year (not uncommon, but it will vary depending on the economy) your interest will be around $50,000 a year. (Don't forget, these are tax free muni bonds, that is $50K net.)
Now, ask yourself, can I live the lifestyle I want to on $1,000.00 (approx.) a week? If you want $2,000 instead, invest 2 Million in the funds.
With my lifestyle, I could live pretty well on about $1500 as long as I do not have any large debts to pay off. (Mortgage paid off, etc...) That would cover my living and entertainment expenses, and leave me a bit left over for a rainy day. So, from the calculations above, I estimate to retire today, I would need $1.5M in a tax free fund.
Of course, I am no where near retirement, and by the time I do retire, I will probably need more then $1,500 a week to enjoy my retirement.
2007-08-13 19:48:43 · answer #2 · answered by cbmttek 5 · 0⤊ 0⤋
Depends on how much you need to live on.
I'm 48 and have retired form the rat race. It's important to diversify your investments. Also get a good balance between
growth and income. Sounds like your on the right track.
2007-08-13 19:05:15 · answer #3 · answered by Loui C 2 · 0⤊ 0⤋
How much will you spend each year? The long term average return of the US stock market is 12%. Allowing 4% for inflation, you could draw about 8% each year forever. To produce $100,000 per year, you would need about $1,250,000.
2007-08-13 19:03:11 · answer #4 · answered by STEVEN F 7 · 0⤊ 0⤋
Sounds like you got enough to retire now. Of course, it really depends on what kind of lifestyle you plan on living.
2007-08-13 19:03:20 · answer #5 · answered by bdancer222 7 · 0⤊ 0⤋
i have been retired now and i would say a could ball park figure is you will need 65% of your present income to live at the same standard as you are living now!!!
2007-08-17 14:41:12 · answer #6 · answered by mister ed 7 · 0⤊ 0⤋