How to Find Your “Retirement Number” презентация

some work, but it’s important.
You can use tools like mint.com, or personalcapital.com to help.

For the purposes of this article, I’ll use my family’s 2014 total spending as an example: $50,000

off by the time they retire.
If that doesn’t include you, ignore this step.
Otherwise, subtract out the amount you paid in rent/mortgage this year from your overall spending.

In 2014, my family spent $10,200 on this.

We expect to own our home by the time we retire, so we feel comfortable subtracting this.

New spending total: $39,800

and disability insurance is that it protects future cash flows in the event of catastrophe.
If you’re retired, there aren’t any future cash flows to protect.
In some cases, however, it still makes sense to keep some insurance.

In 2014, my family spent $3,240 on whole and term life insurance, as well as disability insurance.

We feel comfortable subtracting this—knowing that we’ll add in costs for long-term care insurance in step #5.

New spending total: $36,560

money on food—kids have moved out and people prepare more of their own food.

Depending on your age right now, here’s how much the Bureau of Labor Statistics found that food and alcohol budgets shrunk for those 65 and older:
25 to 34 years old: 17%
35 to 44 years old: 34%
45 to 54 years old: 35%
55 to 64 years old: 23%

In 2014, my family spent $5,750 on food and alcohol.

Currently, we are right on the border of 34 to 35-year old family. We go to our local coffee shop often in the winter, to help our one-year-old daughter get out of the house. We feel comfortable reducing this budget by 20%, or $1,150.

New spending total: $35,410.

since they are no longer commuting. After the first couple of years, they also tend to take fewer long-distance trips.

Depending on your age right now, here’s how much the Bureau of Labor Statistics found that transportation budgets shrunk for those 65 and older:
25 to 34 years old: 26%
35 to 44 years old: 36%
45 to 54 years old: 37%
55 to 64 years old: 29%

In 2014, my family spent $7,000 on transportation, with half of it being in the form of airline flights.

Though I’d like to believe we’ll still travel as much, I know that likely won’t be the case. To keep it optimistic, I’ll only reduce costs by 20%—or $1,400—here.

New spending total: $34,010.

normally do rise. Of course, this will vary greatly, and in some ways is unpredictable.

That being said, depending on your age right now, here’s how much the Bureau of Labor Statistics found that healthcare budgets grew for those 65 and older:
25 to 34 years old: 130%
35 to 44 years old: 59%
45 to 54 years old: 33%
55 to 64 years old: 16%

In 2014, my family spent $7,430 on healthcare—including insurance premiums.

I’d like to build in a margin of safety, so I’m going to increase our expenses by 100% in this realm, or add $7,430.

New spending total: $41,440.

estimate for your future benefits by visiting this site here.

It’s worth noting that if the government doesn’t take any steps to bridge Social Security’s funding gap, experts estimate that benefits will be cut by 22% to 29%.

The Social Security estimator tells me that I will receive $22,800 per year if I retire at 65 and keep earning about the same salary.

To build in a margin of safety, I will reduce this number by 25% to $17,100.

New spending total: $24,340.

by 25. Having this amount, in theory, would allow you to take out 4% of your nest egg in your first year of retirement, and adjust it for inflation every year thereafter.

However, it’s crucial to remember that these are just ballpark figures. Remaining flexible and finding a professional to help are both key ingredients for nailing down your retirement goals.

After taking Social Security into consideration, my wife and I have a retirement number of $608,500.

If we want to retire early, or disregard Social Security entirely, our retirement number would be $1,036,000.


Does your number surprise you?