Realistic Retirement Calculation

Too much is made these days of retirement planning.  Sure you have to save but as for planning, the problem is that there are far too many variables to account for.

I suggest 'planning' a few years or less away from retirement.  I hate to use the word 'plan' because this isn't really a plan at all.  Rather a realistic and simple way to look at your retirement from where you are now.

I would be happy to send you the entire worksheet, just email me and ask, its FREE but here is a simplified version.
  1. Add up all your assets, bank, brokerage, CD's, 401k, IRA, etc
  2. Do not include your house in this calculation but it should be paid off!
  3. Divide your total assets by 300.  This is the monthly amount you will have to live on which comes from your assets at a withdrawal rate of 4%
  4. Add whatever social security or pension (if you are lucky) to the above number.

That's it.  That's what you can afford, period.  If you don't like that number, two choices;
  • get back to work and recalculate in a few years
  • recalculate with a cheaper home and add the difference to your assets above
I hope that helps, let me know what you think in comments below or via email.  By the way, I am available for money coaching too and hold on to your wallets, I am no longer a stockbroker and do not sell investments of any kind.  Mine is friendly advice without an agenda!

1 comment:

  1. George in OregonSeptember 19, 2012

    Very easy, thanks.