Iris Richardson Photography - Planning for Retirement
Back to student page
For whatever reason, most people do not plan for retirement properly. Retirement planning is especially difficult for the self-employed as they have no pension or other company retirement benefits. When one retires, one can use about 5% of one's savings per year to ensure long term financial viability. If you want to live on $30,000 per year, you will need to save $600,000 (in today's dollars). In forty years, this will amount to approximately two million dollars where you live on $100,000 annually to maintain the same standard of living as someone living on $30,000 today. If you were to save for retirement for 40 years, you would need to put away $4500 per year. If you decide to put saving off until ten years later and save for only 30 years, you would need to save $8850 per year. All these numbers assume you earn 10% per year on your money in the stock market or other investments and are rough estimates. When one considers that Social Security will be only able to provide a fraction of the benefit that it provides today, it will be even more important to plan accordingly.
[Previous] - [Next]
|
