9 Simple Steps to Answer the Question "How Much Money Do I Need to Retire"?

So, you're thinking about retirement but your notworth of expenses set aside in an emergency fund.
sure how much money you need, eh? What everThis is money not to be touched except in cases of
your retirement dreams are, traveling to placesemergency. Add monthly totals from steps 2, 3, and
you've never been before, playing golf every day,4 then multiply by 3 to 6 (your choice) for your
sitting on a tropical beach, or just fixing up the house,emergency fund total. ________.
the time for getting out of the rat race is closing6 Income In Retirement.
quick! You need a retirement plan to make sure that- Saving ______
your money will last.- Pension ______
Here are 9 simple steps to help you get there- Social Security ______
1 Decide Where You Want To Live After You Retire.This is where you need to talk to an expert who can
Do you want to remain where you live now or dosit down with you to explain your options. Depending
you want to move to another location? Say, aon what age you plan to retire, your total
retirement village someplace in Florida. Once you havedistributions will differ.
a picture in your mind of where you will spend your7 Plan Your Estate.
retirement years, you will have a framework of yourIf you don't have a will, get one! You don't want u
financial needs.Uncle Sam deciding what happens to your stuff after
2 What Do you Want To Be Able To Do In(well, you know)! This is another place that you
Retirement?would be wise to contact a local expert to discuss
- Do you want to travel?things like trusts, power of attorney, and investment
- Do you want to play golf every day?plans so you and your beneficiaries are protected.
- Do you want to stop cooking at home and eat at8 Now For The Totals.
restaurants for most of your meals?Your expenses - add #2_____ + #3_____ +
Write down all of the activities you want to be#4_____ +#5_____ = ______ monthly
involved in and figure out how much it will cost on aexpenses.
yearly basis. i.e. an annual trip to the Bahamas,Your Income _ #6 = ______ monthly income.
membership fees to the golf club, etc. Come up withHow you doing? Everything OK so far? (remember,
an annual total and divide by 12 for a monthlythese are just estimates. I'm sure they will change a
expense. (________ = monthly total).little bit for various reasons). By now you're getting
3 List Your Monthly Expenses.the picture of where you are and where you need
- Housing - mortgage or rent payments, utilities.to be.
_______9 If Things Don't Add Up And Your Expenses Are
- Activities expenses from #2 ________Larger Than Your Income, Now Is The Time To Do
Automobile expenses - Monthly payments, gas,Something About It
insurance. (your situation will vary, but the averageThere are only a few ways to make more money
operating expenses for the car owner in the U.S. Isfor retirement.
17% of the annual household expenditures). Example:- Inherit a big pot of gold - if your like me that's
If you make $50,000.00 per year in wages, your carprobably not going to happen.
expenses could be as high as $8,500.00. As I said,- Invest more of the money you DON'T have in the
this ill vary as to how many cars you own, howstock market and take the chance that everything
much you drive and what you drive.will be just fine. Doesn't sound like a good plan to me.
________divided by 12= monthly total.- Get a second or third job - Hey, we're talking about
4 List Your Insurance Needs.retirement here. It's suppose to be about working
- Life ________=monthly costless, not more!
- Health ________- Rob the local bank - Don't Do This!!! I'm guessing
- Homeowners ________that you have enough problems.
As you approach retirement, it's wise to review with- Create a new income stream by starting you own
your insurance provider your policies because yourInternet business. (That's the Ticket)! It's not as hard
needs be different than they are today. Example:as you might think and for a small investment you
Your children are grown and living on their own now,could create enough wealth to properly fund your
you may not need the same level of life insuranceretirement. This might just be the answer you've
you did when they were still at home. Again, yourbeen looking for.
needs are your own and only you can determine theSo, how much do you need to retire? Go through
proper level of coverage to carry. _______=the steps and you should at least have a good
monthly premiums.estimate. This isn't rocket science but it will take
5 Emergency Funds.some time and planning. If you take to heart step
I don't have to tell you unexpected things happen.#9, you may not have to ask "how much do I need
You need to be prepared for unplanned expenses.to retire, but rather "what will I do today or where
Again, your needs are different than anyone else, butdo I want to travel" now that your future is secure
a rule of thumb is you should have 3 to 6 monthsand you have all the money you need.