How much money do you need to retire comfortably?

Do you have a retirement plan?

Are you ready to retire now?

These are some questions to ask before you retire.

Retirement planning is probably the most important part of financial planning, similar to setting a household budget or investing. 

We’ve created a simple retirement planning calculator with inflation.

Let’s find out how much you need to retire comfortably now!

Shocked?

Yes, I was too! When I calculate I need almost $1 Million just to retire with my current spending! Yes, it is a number with 6 zeros!

But why the huge numbers?

It is because of inflation. The scary word that reduce your buying power as time passes.

Example:

  • A plate of chicken rice that cost $2.00 Ten years ago now cost $3.50.
  • The plate of chicken rice have an annual inflation rate of approx 6%

That 6% is much more than your annual pay raise that is designed to catch up to the inflation rate.

Recommendation:

Visit our library for some of the best books you should read to prepare yourself. These few books that I read and have blow my mind and changed my life. Hopefully they will help you as well.

Is the Average Citizen Ready To Retire?

According to a report by CNBC in a study at United States, 1 in 3 citizens have less than $5,000 saved for retirement. Most citizen have no retirement plans at all. The results is absolutely shocking.

  • 21 percent have nothing saved for the future
  • 11 percent have less than $5,000 in savings
  • 16 percent have less than $200,000 in savings
  • Only 52 percent have more than $200,000 saved in bank
Retirement - Are You Ready To Retire According To Statistics - By IncomeBuddies.com
Question. How Much Have You Saved?

In fact nowadays, many people who reached their retirement age were not able to retire. And this trend is going to get worst in the next 5 to 10 years.

Just recently, while I was having lunch in my favorite cafe I notice an old uncle probably in his late 60’s working in the cafes clearing plates after the customers. He is just one of the many men and women that have to work way after their retirement age just to get food on their table. But retirement shouldn’t look like this.

Retirement is the period of life where we can finally relax and enjoy the fruits of our labor with our grand kids running around the garden with us enjoying the warm sunshine with a cup of orange juice.

We want our retirement to be comfortable and stress free.

In order for us to retire comfortably, we need to know how much we need in bank to fund our retirement. This dream retirement lifestyle is totally possible with great retirement planning.

We have come up with some of the best tips and actionable steps for you to plan for your retirement.

Are you ready for the challenge?

Let’s Find Out!

Recommendation:

We have designed some amazing tools that may help you to calculate your home mortgage, debt payment or even help to plan your retirement, just to name a few. Do check it out after this article! 

Retirement Tips

How much you need to retire depends on the following questions:

  1. Where are you planning to retire?
  2. When are you planning to retire?
  3. What ripe old age will you be having after your retirement?

Where are you planning to retire?

The location or city which you are planning to retire largely impacts how much do you need to retire. The living cost of each city will largely impact the amount you need to retire. We will use Thailand and United States as an example on the living cost. And we will use the data we got from WorldData.

Example:

Thailand

  • Monthly Income USD$496
  • Cost of living index 61.8

United States

  • Monthly Income USD$4,930
  • Cost of living index 100.0

Although people in United states earn approx 10 times more than those who earn in Thailand, the cost of living in the United States is almost twice as expensive as Thailand.

Which means if you are earning in United State, and you plan to retire in Thailand, you will have a much better chance to live the life of a king during your retirement in Thailand than in United States.

When are you planning to retire?

This is the most straightforward. If you are 25 years old now and you are planning to retire at 65, you will have 40 years to earn enough for your retirement.

But if you are 25 years old now and you are planning to retire at 45. You will only have 20 years to earn enough for your retirement. You will need a lot of in your bank in order for you to retire.

And for you to get the numbers right, try using the calculator above to get an estimated amount you may required for your retirement.

What ripe old age will you be having after your retirement?

This question is not a easy thing to answer. According to statistics by TheWorldBank the average life span is 72 Yeas Old, this includes 3rd world countries such as Africa and 1st world countries such as United States. Average life span is highly dependent on the following:

  • Accessibility to health care system
  • Gender
  • Race

The average life span have grown from 65 years 30 years ago to 72 years , today and the average life span is still growing now.

Life span for some of the countries/ cities today are illustrated below:

  • Japan, 85
  • Hong Kong, 84
  • Singapore, 83
  • Australia, 82
  • United Kingdom, 81
  • United States, 80

For you to enjoy an awesome retirement lifestyle is to prepare yourself to have more than enough retirement funds to out live your life span.

We will show you some actionable steps you can take to prepare for your retirement.

Steps Contents - How to Create a 50/30/20 Budget the Easy Step-By-Step Guide
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How To prepare for your retirement?

First you need to find out how much you will need for your retirement. This will give you a clear goal on how much do you need to save for your retirement. Then create your very own retirement plan and stick to it.

Here are the 3 items you should have in your retirement plan:

  1. Home budgeting
  2. Investing
  3. Increase Current Income

Tip. You can get your retirement numbers by using our retirement calculator. Recommended to save at least 20% more than required as people will live much longer in 10 to 20 years time according to statistics.

Home Budgeting

Home Budgeting is the core of financial planning. It is the reason why some people are able to live their life with little to no stress while others are struggling in their day to day life.

A person who earns a 5 figure monthly income can stress over money every single day. While his friend who earns a low 4 figure monthly income can have a stress free life.

This is the power of Home Budgeting.

We have an in-depth article that helps you to create your own personalized home budget in 5 Simple Steps.

Recommended Read: Simple Guide to Create Your Household Budget

Investing

Investing

Investing is the secret of success for many multimillionaires. It is called “letting the money work for you!” But instead many people work for the money, thus are always caught in the rat race of chasing after the money.

Learn to invest in assets that help you earns money. But there is always a catch, investing do come with a risk, but you have the power to minimize this risk to close to negligible.

There are ways of investing you can learn and follow to become rich and successful.

We don’t reinvest the wheels, we learn from the masters of investing. Mentors such as Warren Buffett will be your mentor and guide you to success.

If you have guess it.

Yes, I am refer to the books written by the legend of investing and here I have found a few of the best investing books you should read that will definitely help you in your journey.

Recommended Read: Best Investing Books for Beginners

Increase Income

“How can you increase your current income?”

The question which almost everyone I know have asked at least once in their life. I am no exception and thus I have asked around and did some research to find out how.

In my search in thinking of ways to increase my income I have found out that it all leads to 2 simple idea

  • Increase your assets
  • Reduce your liabilities

Question: What are assets and liabilities?

Answer: Assets are things that gives you money and Liabilities are things that takes money away from you.

This sounds too Simple!

Yup, it is.

The theory may sounds simple but to do is not as easy.

According to Robert Kiyosaki the Author of Rich Dad Poor Dad, your house you are staying in is not an asset because it is taking money from you every single day.

Will you sell your house and live in the streets because of that? No, you will still stay in your house and pay the mortgage.

What other option do you have?

You can rent out a few empty room of your house to a few tenant and start earning a few hundred bucks per month, your house is now an asset!

You can also take up a semi retirement job that can help you increase your income.

Some other ways are such as creating a passive income stream, doing investing or creating a business.

You can check out how to easily create a passive income in my other articles. We will show you how to generate a passive income step-by-step.

Recommended Read: Guide to Make Passive Income

Good Debt and Bad Debt Difference

Conclusion

Retirement is the period of life when we will love to be enjoying and not working at cafes clearing plates. A well thought out retirement plan is the basis of a great retirement life.

We should always plan our retirement early. If you are already in your 50’s and looking to retire in 10 years time. It is your responsibility to plan how much do you need to retire. If the numbers from the retirement calculator shows that you don’t have enough savings for retirement. Try this out!

Try using the 3 tools in your in your retirement plan:

  1. Home budgeting
  2. Investing
  3. Increase Current Income

But I will highly suggest you to approach a good financial adviser to help plan for your retirement.

Retirement planning should be done as early as possible. A retirement plan done when you are still young will allow you to have enough time to adjust and save up for your future.

We will want to live a stress-free life when we retire and you have the power to plan for your future.

Taking your First Step is always the hardest, But it is the Most Important Step to Greatness

Visit My Library and check out some of the Best Books you can read to help you in your journey

Here are also some in-depth review on each of the few books which I have carefully selected to be the best in each field that you may want to read.

What guides me in my journey are some of the many books I read for the past years. Learning from them is the shortcut to our goals.

Smarter Everyday My Library

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Disclaimer: I am not your financial adviser or lawyer, information found in our website are just my opinions and should used for entertainment purpose only. You should always ask your financial adviser or lawyer for any financial or law related advice.

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