How much money is enough to retire?
With 50 per cent of retirees not expecting their money to last in retirement, and others delaying retirement indefinitely, it’s clear not many of us have the answer.
Some estimates suggest you need a lump sum of $744,000 for a comfortable living for a couple. Doesn't sound like enough? Another estimate for high-income earners is that you need 67% of your current annual income.
But it all depends.
How long do you expect to live in retirement? The average length of retirement is 18 years.
How much money do you have in superannuation and what type of superannuation fund do you have?
What investments do you have? Do you own your home?
What are your current expenses? And do you expect these to increase or decrease in retirement?
What do you want to do in your retirement? Do you plan to travel? Renovate? Study? Learn to play the violin?
Does it all sound too hard??
A better question is what do you want to do with the next phase of your life?
And how can you live the life you imagined?
Tim Ferriss, author of ‘The 4-hour work week’, suggests it is very hard to arrive at a dollar figure that would support your retirement. He suggests to avoid questions such as ‘what do you want’ or ‘what are your goals’.
Instead, he advises that you think about what excites you and what would excite you in retirement?
What would make you most excited to wake up in the morning to another day?
What would you like to have, be and do?
And then work out how much money you need to sustain that.
It may not be as much as you think!
And you may discover you never actually want to 'retire'! And that you want to start living your 'retirement' dreams now!
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