RETIREMENT Primer – #5 HOW MUCH can you REALLY live on?

The question is, when you are 65 and starting to get a little tired,
what yearly income do you want to live on, bare minimum,
for the rest of your life?

Sure, precaution might have you wanting to save until death, which is a good idea, but most people can live on less than $24,000 per year.  To absolutely require a lot more money every year might have something to do with ingrained expenses, and possibly frivolous costs.  Most retirement planners make exorbitant blanket statements, that involve unrealistic if not outlandish yearly incomes and expenses, and a serious amount of waste…

General Retirement Myths:

You need 80% of your income to keep rolling in after retirement (no matter what your income)
You need $2.5 Million dollars saved to retire
The average expenditure of the average American home is a good gauge for funds needed to retire. (wasteful spenders)

The talk of retiring on multi-million dollar bank accounts is a myth as a whole.  While many retirement planners talk of huge numbers – the reality of people retiring is much different – there are many people retired right now, all who don’t have $2.5 million in the bank!

Pondering Life Expenses:

Would you be comfortable on $1,000 a month, which is $12,000 a year?
How about double that: $2,000 a month, which is $24,000 a year..

If you have secured housing, closed out your debts, have an insurance plan (home owners, health insurance) and have related taxes covered – then $24,000 a year is not as bad as it sounds!

$500,000

If you can generate a nest egg over  $500,000 (created with lifelong saving and investing tricks) – then that money could earn between 4% and 6% interest a year – which means that interest alone could pay you over $20,000 a year, without having to work.  That’s the definition of EARLY RETIRMENT – and as you get there, you own your future for the most part.

That half-million dollar nest egg turns into an investment-money machine. As mentioned, you don’t even have to save $500,000.  You can use investment much less (at minimum effect) to create that money with much less money.

Achieving this Half-Million dollar mark should be the bare minimum goal for every couple.  An individual goal, could be even smaller.

There are reasonable numbers to tally, that don’t involve multi-million dollar bank accounts, and in doing so, you will see very solid numbers that are VERY achievable, numbers that you MUST achieve to to alter your future from Future #2:

FUTURE #2: Social Security only – you receive payments of $400 to $2000 a month for the rest of your life.  You have to make an average $110,000 a year over 35 years to get the $2,000 a month!  Everyone else is getting less.

FUTURE #1 is much better: Even if you SAVE SMALL, and use Compound Interest to your advantage you can pad your Social Security significantly.  The larger you save, the more you exceed very low standards of living, and get to do cool things, like travel.

COMPOUND INTEREST is one essential way to get there.  It will help your money exceed inflation rates: remember your cash in savings loses value every year because of inflation.  Compound Interest will also allow you to triple your money in 30 years, and it will enable a monthly payout for every year thereafter.

For a COUPLE to save $500,000 it would require this:

$3,000 must be saved every year over 40 years, and the money must earn 6% yearly, the interest earned must always be recycled back monthly into the same funds to earn more interest.

This means that individually, to save $250,000 to pay yourself $12,500 per year in retirement – you have to start saving $1,500 per year into this investment.

That’s the MINIMUM ESSENTIAL GOAL.

To reach that goal….

save $4.21 PER DAY…

If you save $4.21 EVERY DAY for 40 years,
This translates to a well-timed investment/savings of only $60,000, which if invested smartly with Compound Interest, will turn into
$250,000 by retirement, which can allow you to pay yourself $12,500 per year thereafter.

If you double that amount individually to
$8.41 PER DAY…

then you will reach $500,000 by retirement, which can allow you to pay yourself $25,000 per year thereafter (ALL WITH SAVING ONLY $120,000 total throughout those 40 years!!!)

If you triple that amount individually to
$12.63 PER DAY…

then you will reach $750,000 by retirement, which can allow you to pay yourself $37,500 per year thereafter (ALL WITH SAVING ONLY $180,000 throughout life!!!)

        Look up ‘Compound Interest Calculator’ on any search engine and you can play with these numbers yourself. Who could doubt that it’s time to sober up and look at this stuff, right?

EINSTEIN ONCE CALLED ‘compound interest’
the 8th wonder of the world!!!

A better future is within our grasp,

and this simple retirement plan might be your best shot.

         There are MANY ways to increase income and savings, and the sooner you start the more dramatic the outcome after many years. Losing the chance to invest savings THIS YEAR is always the worst because the earliest years are the most potent…

SAGA can save your friends! Feel free to like and share!

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