What Does It Cost To Retire?

So what does it cost? Have you really looked at “funding” your retirement? Well let’s do the math.

First how old are you? How long do you want to work? How much do you need (or want) each month? Are you willing to work even part-time? How about social security? Okay, lets forget social security for now because if you are not 50 years old now, you won’t get it.

Lets do an example for a 30-year old that wants to work till he/she is 65 and has not put back any money yet. And lets assume this person wants to live on $3,000 per month in their retirement. Lets also assume he/she doesn’t want to work in their retirement.

Example: Age 65-30 (current age)=35 years to save up. Life expectancy is age 80-90. Lets assume you live till age 90.
Age 90-65 (retirement age)=25 years needed to be funded. 25X12 months is 300 months to fund.
300 months X $3,000=$900,000.

Well that’s a whole lot of money! Lets start saving. Where do you want to put it. In the bank, IRA, 401K….where then? Okay, let’s forget about where for now, let’s just start saving. Otherwise we might have to consider inflation at 4-5% every year.

So back to our example where we need to save $900,000.

Save $500.00 every month from your big fat salary at work. $500 X 300 months=$150,000. Hmmm not enough!
Save $1,500 every month from that excellent job might do it. $1500 X 300 months=$450,000. Nope not yet!
Save $3,000 every month? Yep, that’s the answer. $3,000 x 300 months=$900,000

Better start saving big. Oh yea, if you are already older than 30, then do the math. You’ll need to save a whole lot more!

So, why am I going through this? There have been so many people who think the government is going to take care of them. And they think social security will still be there. Remember, the average social security check is about $700! Yikes, that’s not much is it. Some people will have a retirement check and it might be significant, but the others don’t. Most of the working class (middle class) will end up on the proverbial “short end of the stick”. Are you an artist that can record a song and get paid on its residuals for the rest of your life? Or are you just a wishful person wishing the money will magically happen? Got news for you….do something about it!

Go to my website http://www.the-team.biz/39940774 and order a book written by Robert Kiyosaki called “Cashflow Quadrant”! It will teach you about being a “B-Type” business owner. It is the best type of business. Say, while you are on that website you might as well give it a good looking over.

Best Wishes,
Doc

1 Comments ↓

One Comment on “What Does It Cost To Retire?”

  1. Claire September 16, 2012 at 11:11 am #

    Love this one Craig!!! Great way to break it down!!!

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