How Much Money Do You Need to Retire?

How much money do we need to retire? I suppose it’s difficult to begin with any amount of money. It’s all depending on your expenditure and the lifestyle you desire. If you’re living a simple life without any luxury expenditure and with a habit of recycling things, you’re basically good with a small amount of money to retire. The problem is sometimes life has a certain way to get to us when we least expected. Things like accident, natural disaster, recession, inflation which we thought won’t be affecting us might just hit us right from nowhere. This is why we should be prepared. It doesn’t matter if it is money savings, bonds, stocks, insurance, businesses or any other money making opportunities as long as it’s a backup plan. Just in case something happens to the main income, you still have some money or other alternative source of income.

Let’s get back to the question of how much money we need in order to retire. A blog post title “How to Retire on $60,000 a Year” In Yahoo Finance presented a good example which elaborates a specific income of financial position. If you’re making somewhere around $60,000 a year or $5k a month, you definitely need to check out the blog post. Especially if you’re working in the US, the blog post gives you an estimation of how much money you’ll get once retired. At the end of the calculation and estimation, it shows that we cannot just rely on one main income, social security and savings. We definitely need to work on other investments and alternative source of income. This is why it is necessary to pursuit for alternative money making opportunities or should I say a part time job. The sub income doesn’t have to be a lot, a minimum of hundred dollars per month is good enough. A consistent alternative of hundred dollars per month within a year is $1200. Ten years will add up to about $12,000. Plus it might have a chance to grow big. The earnings might even overtake your main income one day. Best of all this alternative source of income can keep you occupied even after you retired. Doing simple activities which can help killing time and make some extra money is a good way to feel safe, secure and enough money to spend for the retirement time.

P/S: It’s kind of scary if there is only output but no input in your bank account.

Comments

comments

Both comments and pings are currently closed.

One Response to “How Much Money Do You Need to Retire?”

  1. James says:

    I think this question is extremely difficult. It depends on what age you will retire, do you have any loans, do you have any side income.