Tuesday, April 5, 2011

How much do you need for retirement?

How much do you need for retirement?

It's a question that is hard to answer because how much you need is relative to your spending habits and desired lifestyle. If you plan to sell your home purchase a used motor home and find free places to park year round, your number will be different from say your friend who plans to travel extensively purchase their dream home and buy that Corvette they always wanted! The truth is most of us will land somewhere in the middle of those two groups. Our home will hopefully be paid for, and our work expenses will go down. However spending on travel and other leisure activities will go up and hopefully we will enjoy what we worked so hard for. So here are a few ideas on how much to save so you can retire, coming from financial experts not me.


David Bach (I Will Teach You To Be Rich) 12.5%

Dave Ramsey (The Total Money Makeover: A Proven Plan for Financial Fitness) 15%

Elizabeth Warren (All Your Worth: Ultimate Lifetime Money Plan) 20% of after tax income

Here is a great retirement calculator that will help you determine how much you will need to save to reach reach your retired income goal. 


http://cgi.money.cnn.com/tools/retirementplanner/retirementplanner.jsp




Right now I am using Dave Ramsey's plan but want to convert to a more extreme savings plan as my income goes up. My future goal is to make enough money that I can live comfortably off of half of my income so that I will have the option to retire younger if I would like. I will give you more info on how I plan to do this in later posts. 


How much money would you like to have when you retire? What are you doing to get to that point? How much a month on average do you save let me know in the comments section below? 

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