[Sharon]

When planning for retirement, how do you figure out the amount of money you’ll need to live comfortably? Do you follow a specific formula, consider your current lifestyle, or rely on expert advice?

Share your approach to estimating the ideal retirement fund, and let us know if there are any key factors or tips you think others should consider in their planning.

[Dan]

A good way to get in the ballpark is to multiply your annual expenses by 25:

100,000 annual expenses

2.5 million nest egg

(4% withdrawal rate = $100k)

Of course, other income can reduce the size of necessary nest egg.

If you have a pension or cash flowing real estate to cover some of your expenses, then you don’t have to have such a large nest egg.

IMO, reducing the expenses is the most important part of the equation.

No credit cards/loans, paid off home, simple means…

you can retire much sooner.

[Kenneth]

Figure out present and future expenses first. Then compile funds that will cover those expenses with a bit of float.

[Sarah]

Depends on your definition of comfy and what that costs. Personally I am not a lavish person so as long as my food, housing and travel are covered, I am tickled pink.

For others it might mean a Porsche on the driveway and 4 homes around the world.

[Author]

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