How much do I need to retire

A question I often get from clients is “how much money do I need to accumulate to retire on?”.

Many factors come into play to answer this question, namely, annual expenses, lifespan, retirement date, inflation, income sources, and investment rate of return.

You’ve probably heard that we should plan for 70% of our pre-retirement income to retire on. This might have been true in the past. However, with the cost of housing and mortgages lasting into retirement, we prefer to look at it as 100% of my expenses.

The way we see it, the easiest way to come up with the number is the “4% rule”. This basically means that 4% of the amount that you have should cover the expenses you need for 1 year of retirement.

In practical terms, if you need $75,000 per year to live on, you take $75,000, divided by 4%, which gives $1,875 million. This is the amount you need to retire on.

If you’d like to know your precise number, and get a plan to get there, connect with us for your personalized financial plan. Click here to speak with an expert.