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How Much Money Do You Need to Retire?
The talk over 30 years ago was retirement at age 60. Workers could have a 30+ year career and have plenty money to live peacefully. The days before social security was threatened and inflation was low are long gone. Modern workers and those approaching retirement of often ask how much money do you need to retire. The simple answer that has been used by financial planners for decades is 5 to 8 times your annual salary at retirement age. This one-size fits all approach is hardly correct in today's economy. The real answer is that there are things you can do to solidify your retirement income.
How Much Money Do You Need to Retire?
The endless question of how much you need does not revolve around just finances. There are important questions that you must ask yourself to help you plan. The answers to these questions will give you an insight into what you need to do to retire early or on schedule.
1. Do I plan on being healthy
2. How much do I have in savings right now
3. Do I have now or will I have any future debt
4. Do I plan on receiving full social security benefits
5. What investments do I currently own
These are just the basic questions that you can use to get you started. Your health will play a larger role than you realize in retirement. The amount of medical care that you need could quickly send you into debt or increase your out of pocket monthly expenses. The savings that you have now could be adversely affected by future events or improper tax planning. Current and future debt is always a concern. Any debts are difficult to plan for in your retirement.
Not every person will receive 100 percent social security benefits. Things like divorce, early distributions and legal issues could affect how much is received each month. Your highest paid years might fluctuate between now and your retirement. The investments that you hold now or will make in the future will always affect when you can retire. Cashing in too early can put a dent into IRA, long-term bonds and other securities.
How to Grow Your Retirement Funds
One thing that is for certain is that it takes money to retire. Whether you are in good health or not money is still needed. There are some things you can do right now to grow your income regardless of how much time you have before you retire. Investments that are known to produce higher returns like turnkey investment property can help you. The average of 15 percent of more in annual returns from a property could help you reach a retirement goal faster.
The appreciation schedule and depreciation schedule often work together to help you build a nest egg from real estate. Investing in areas like the stock market could provide returns but these investments also bring higher risk. Speaking with a financial planner, accountant and investment advisor can help you plan successfully for retirement. It is never too late to start saving and you can save more the earlier you start.
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