How Much Money Do You Need To Retire Comfortably What Your Expenses Are Going To Be In Retirement, Which Makes Sense Right How Much Are You Going To Need To Live When You Are Retired This May Seem Like Its Something Unrealistic To Figure Out  How Do I Know If I'm Gonna Need A Hip Replacement Or How Much Am I Going To Be Spending On My Grandkids Paying For Their Soccer Uniforms Or Their Dance Recital Outfits I Know I Know There' Are Lots Of Unknowns, 


But Here Is Where We Are Going To Start So We're Going To Look At Your Current Expenses, How Much Are You Spending Right Now And Then Think About The Lifestyle That You Want To Be Living During Your Retirement Years Will You Have Pretty Similar Expenses Do You Want A Similar Lifestyle Or Will You Want To Be Traveling A Lot More Or Will You Be Living Somewhere More Expensive Than You Are So Kind Of Think About What You Want Life To Be Like During Retirement And 

How Much More That May Cost You Than Right Now And A Good Way To Break This Down Is To Look At Your Largest Expenses Right Now And That's Probably Going To Be Your Home Or Your Rent Payment And Think About If You're Going To Have That Paid Off During Retirement Or Will You Still Be Renting Will You Still Have That Large Expense Large Housing Expense And Do You Have A Car Payment, Will You Have That Car Paid Off During Retirement Or Will You Buy A Lamborghini During Retirement And Have That Car Payment And 

Also, Look At Your Grocery Bill Are You Buying For Six Kids Right Now Plus You And Your Husband, Or Is It Just You're Spending At Grocery Money On Because That Could Fluctuate A Lot In Retirement If You Aren't Paying To Feed Six Kids Plus You And Your Spouse To Get A Feel For The Three Largest Expenses How Those Will Be Different In Your Retirement Years And That Can Give You A Good Starting Place On Where To Adjust Your Expenses During Retirement Years That Could Be A Lot Less Or It Could Be A Lot More If You Are Moving To Somewhere More 

Expensive And Then Also Take Into considering Medical Expenses That Usually Go Up In Retirement But If You Feel You're A Healthy Person, You'll Continue To Work Out And Eat Your Fruits And Vegetables And You Don't Really Foresee A Lot Of Health Problems And Maybe Your Medical Expenses Won't Be That Expensive In Retirement Years And Especially If You Are Looking To Retire At A Young Age, 

Then You May Not Have Those Medical Expenses Until Further On Down The Road, But Just Kind Of Take That Into Consideration And Get A Feel For Whether That Mortgage Payment You Have Right Now Will Go Straight Over To Medical Expenses Or If You Don't, Really Think They Will Be That High, So Just Kind Of Get A Good Estimate On Where Your Current Living Expenses Are Right Now Compared To Where They Will Be In Your Retirement Years And It Doesn't Have To Be Exact Because This Is Not A Science It's More Of An Art So Things Will Change Over Time And If It Sounds Too Overwhelming To Figure Out These Expenses 


What You May Have In Retirement Then Just Stick With Your Current Living Expenses And From What I've Seen There's A Good Rule Of Thumb To Take About 70 To 80 Percent Of Your Current Expenses And That's How Much You'll Be Spending In Retirement If You Want To Just Stick With That For Now Then You Can Continue To Adjust Over Time, But At Least You Have A Starting Point So You Can Have Something To Work Toward Right Now And If You Feel Like Your Expenses Will Be Higher But You're Just Not Sure How Much Higher Than You Can Just Wait Over Estimate If You WantAnd You Know to Double Your Expexpenses, Ifat's What You Feel You Need To do. 

Maybe You Have Low Expenses Right Now, Maybe You're Just You Know Sharing AOne-bedroom Apartment With Another Person And You're Paying. I Don't Know A Few Hundred Dollars In Rent And Your Other Expenses Are Low Andon't't Get Too Nervous. This Is Not Locked And You Don't Have To Stick To This OverTime, But It's A Good Starting Point And You Know If The Stock Market Takes A Dip.

One Year While You're In Your Retirement Years, Maybe You Don't Take A Vacation. That Year And You Wait Until The Next Year To TakeThat Vacation, Or Maybe You're A Coin Collector Like My Dad And You Canccashh Out Some Of Your Coins If You Need For One Year Or You Can Just Get Even A Little Side Hustle Going And Create A Little Extra Income For Yourself During Retirement You Might Be Super Bored So You'll Want To Do Something Okay Toto Pick Whatever Number Do You Want To For Your Yearly Expenses And Write That Number Down For This Example, In The Blog, 

I'm Going To Use Fifty-two Thousand For My Yearly Expenses Nowhere's The Fun Part This Is Step Number Two If You Already Awesome Passive Income Coming In, Then We Are Going To Deduct That From Our Annual Expenses And If You Are Like Me And Invest In Real Estate And Plan Tokeepp Those Properties In Retirement, 

Then You Will Have Cash Flow Coming In Fromthosee Rental Properties Every Month So We Can Deduct Whatever That Cash cash. Is From Our Yearly Expenses, And That Cash Flow Will Continue To Onceincrease.e You Pay Off The Mortgages For My Example, Let'sjustst Say We Have A Thousand Dollars That's Coming In As Passive Income Each.

A month, Soo We'll Multiply That By 12 Because there Ares 12 Months In A Year AndWe Get $12,000 In Passive Income, So We Will - That From The Original 52,000 Of Our Yearly Expenses, Which Gives Us 40000, So000, So Take Your Yearly Expenses That You Figured Out And Then Deduct Out Any Passive Income 

What You Would Have For That Entire Year From Your Yearly Expenses, And Then We're Going To Move To A Step Number Three And Step Number Three Is Very Simple All We Are Going To Do Is Take That Number That 40,000 That We Just Figured Out AndMultiply That By The Number Twenty-five, So I Would Get A Million Dollars, That's The Amount I Would Need To Have Invested To Retire Is That Simple Taktayourr Expenses Multiply It By The Number 25, And That's The Amount You Must Retire And Let Me Just Point Out I Said That's The Amount We're going.

We Need To Have Invested, We Can't Just Have That Million dollar Sitting In ASavings Account Because We Are Going To Withdraw That Money We'll Start To. Withdraw That During Retirement So We Need That Money Still Working For Us not Just Sitting In A Savings Account Mayearn. Ii Don't Know Just Over 1%. Interest If We're Lucky, But We Need To Have That Money invested, Which, 

Will Mostly mostly Be In The Stock Market And Let Me Briefly Explain Why Wmultiplying.plying our Expenses By The Number 25 There Have Been Studies Done That Show If We Withdraw 4% Of Our Money And Our Money Is Earning A 4% Return Then We Must Likely Will Not Run Out Of Money During Our Happy Retirement Years And If You Want To Do Further Research On These Studies You Can Google The Trinity Study And A Lot.


For Example, Lets Assume At 50% In Stocks And 50% In Bonds And You Invested For 30 Years And Had A 4% Withdrawal Rate Then You Were Safe, You Didn't Run Out Of Money During This 30-year Peperiodsnd He Says In His Blog Post That Luckily The Math This Case Is Interesting. There Is A Minor Difference Between A30-year. period And An Infinite Year Period When Determining How Long Your Money Will.

Last, So Essentially, If We Are Retiring Early, If We Are Becoming free financially. At A Younge. We Will Still Not Run Out Of Money If We Are following. This 4% Withdrawal Rate And Looking At 4% On Our Return On Investment And This Isit Dustedsted For Inflation And If We Wanted To Be A Little More Riwithwith Our Investments And Invest More In Stocks And Lesson Bonds, So Maybe A 75%.75%.investmentinvestmentt In Stocks With A 25% Investmenbondsthenbonds.then We Will Have More Money Because Stocks Will Give Us Return Over The Long Term So We Can Feel Even Safer About Our Investment Will We Will Be A Little Riskier And Invest More In Stocks Because of the Goal.

The Goal Is To Just Withdraw The Interest That We've Earned Instead Of Withdrawing. Our Original Investment And By Using That Number 25 That Is A Saruleule To Have Us Not Run Out Of Moretirement, Allen All Right If You've Made It This Far In The Blog Then I Want You To Comment Below And Tell Me Yes If You Have Figured Out Your Financial Freedom Number Or Not If You Have Not Figured It. Out Yet And We're Gonna Take This One Step Further, So Step Four Is To Figure Out. But How Much Are We Going To Need To Invest Each Month To Reach?

Our Financial Freedom Number Is To reach those Million Dollars And There IsA Calculator Online Is From A Net Worth Ofcom. link Below So You Can Experiment With This Calculator )


But All You Do Is Put In Your Income And Then Your Savings Rate And It Will Automatically Calculate Your Expenses For You So You Can Do It Either Way. You Want To Just Put In What Your Expenses Would Be, Then It Wicalculatewill. Your Savings Ratis's Simple And Then You Can Also Add In Iyouou Already Have Moneinvested, Soso For Example Maybe You Have A 401k You've Been Contributing To For The past. I Don't Know Ten Years Or Something So You Can Put In That Lump Sum Amount Well, Deductfromt The Amount That You have. I Have Already Invested So You Can Get A Clear Picture On How Much You Need To Be.

Investing Right Now Or Maybe You Have A Roth Ira And A 401k So You Can Putin. the Amount You Have In Those Accounts And You Just Put It In The Current Portfolio Box And Then You Also Have The Option Too It Change How Much You Think Your Return Is Going To Be Your Return On Investment, What That The Interest Rate Will Be And Also Your Withdrawal Rate. Maybe You Want To Play.


It Even Safe Withdraw 3% Every Year Instead Of 4% Every Yeachangeou Can Change Those Numbers As You Scroll To The Bottom Of The Page It'll Show You Your Net Worth So The Amount That You Would Have Invested And Then It Gives You The Year That You Can Retire So You Know Whether That's In 15 Years 30 Years Whatever It Might Be It Will Calculate That For You And You Can Play Around So If You Increase You're They Call It A Savings Rate But That's The Amount That You Need to be Invested So If You Increase The Amount You're Investing Every Month, Then You're going to Retire Even Sooner So This Is A Super Fun Calculator 

To Play Around With And Get An Idea On When You'll Be Able To Retire And You Can See Exactly How Much You Will Need To Retire And You Can Adjust It So You Feel Comfortable With Your Withdrawal Rate And The Return That You Are Earning On Your Money And That's It, That's How You Figure Out 

How Much You're Going To Need To Retire And That Net Worth It May Be A Little Different From What WeCalculated Earlier By Multiplying Our Expenses By The Number 25 But It's Close, So That's Just A Simple Way To Calculate Your Financial Freedom Number It's Multiplying Your Expenses By The Number 25 So You Can Share That With Everybody And That Way They Can Know How Much They're Going To Need To Retire And Honestly, 

I Used To Sit With One Of My Co-workers In The Lunchroom Because We Would Both Bring Our Lunches To Work And We Would Talk About How Much We Would Need To Retire And We Had No Clue Like Was It A Million Was It Gonna Be Three Million Would We Have To Work The Rest Of Our Lives, We Just Didn't Have Any Idea So I Am Super Excited To Share This With You Guys Because I Know A Lot Of People Have This Question, I Had This Question Too.


I am an engineer by profession but being a blogger is my old day's dream to create my site for those who are more curious about my birthplace than I am coming from (India). the current city lives in Navi Mumbai, India

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