How Much Do I Need to Retire – The Complete Guide

If you were to poll 1000 people and ask them, “How much do I need to retire,” you'd probably get a range from 5 million to 100 million or more. 

The reality is, many of these same folks hope they can retire at 62 with 300k. Knowing when you can retire depends mainly on your cost of living, less your expenses. 

According to a Federal Reserve report on the Economic Well-Being of people, only 36% of working individuals claim to have their retirement savings on track. It, therefore, means that about 64% are worried as they are falling behind. 

Most experts agree that retirement income should be no less than 80% of one's pre-retirement salary. So, if your pre-retirement income is $100,000 a year, if you trust the experts, you'll need $80,000 a year to have a comfortable retirement. 

I say you can retire when you have more than enough income to cover your expenses in retirement. Your situation will likely sit somewhere in between. Admittedly, you may have expenses before you retire that you wouldn't have in retirement. 

Schwab's recent study examined a portfolio that comprises 50% stocks, 50% bonds and assumes a 5% annual return. The retiree could withdraw 4% of the portfolio per year, plus an additional inflation adjustment for 30 years. Indeed, this is known as the 4% rule. 

The 4% Rule

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