How much money should I save a month to retire early?
- Thread starter NileVan
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If you want to retire early at 50 at least you are now 30 so you can save for 20 years or more. There are many ways or formulas to calculate early retirement, one of which is: Divide the total income in a year by 4%. so if a month your income is $4,000 then in a year it is $48,000 if divided by 4% then the amount of money you must have for early retirement at the age of 50 is $ 1,200,000
E
eldavis
Guest
I can't really say how much is required for you to save, cause the truth is saving alone would get you no where, it would be better if you also add some investment to the mix. Then again, there is no specific amount to save, I would advice you save what you are able to, we all earn differently, what I might consider as little might be seen as big by the next person and vise versa.
CALVINDOL
VIP Contributor
One of the common and major mistake majority of people who are job and career owners usually do is not planning towards their retirement days. You cannot successfully and adequately plan towards your retirement after you have retired from your job or career, but rather the best and efficient time for you to plan towards your retirement is when you are presently working as a job or career owner. There is absolutely no stipulated amount of money in which an individual should consistently save towards his or her retirement days, but what is advised is that, whatever amount is set aside for future purposes like retirements should be of reasonable value and amount.
An individual retirement days does not mean that he or she should suffer and become financially unstable. You can definitely be financially stable and free during your retirement this only if you plan, and by planning you have to save and allot money that is comfortable and reasonable to assist you during your retirement days.
An individual retirement days does not mean that he or she should suffer and become financially unstable. You can definitely be financially stable and free during your retirement this only if you plan, and by planning you have to save and allot money that is comfortable and reasonable to assist you during your retirement days.
Shaf
Verified member
How much you need for your retirement pan is subjective, based on your lifestyle, when you started saving, your desires and how much you actually earn.
You can't plan for $10 million while earning $500 only per month. It's also not logical to expect much if you don't start saving early in your career. The first thing to look at if you want to save for retirement, is how much will be enough for you each month after you retire. This should be calculated for at least twenty years.
Then you start working on a plan to save that amount, preferably looking for ways to boost your income to save more than that so even if you fall short, you will still hit your target. I would not advise anyone to rely only on retirement savings though. Having a source of income that brings you money, no matter how small on a constant basis is the best, so plan also for a business or source of passive income too.
You can't plan for $10 million while earning $500 only per month. It's also not logical to expect much if you don't start saving early in your career. The first thing to look at if you want to save for retirement, is how much will be enough for you each month after you retire. This should be calculated for at least twenty years.
Then you start working on a plan to save that amount, preferably looking for ways to boost your income to save more than that so even if you fall short, you will still hit your target. I would not advise anyone to rely only on retirement savings though. Having a source of income that brings you money, no matter how small on a constant basis is the best, so plan also for a business or source of passive income too.
@Shaf, the calculation of the pension fund is only an estimate of the funds you will need when you reach retirement age. Indeed, you should have other income such as from property rental, stocks or mutual funds etc. If you are 25 years old now and plan to retire at 50 years old, then you have time to save for 25 years.
If your income is $500 per month then your estimated cost of living is $400 per month. If we calculate the pension fund with the formula 4% then your annual expenses are $ 4,800 times 25 is $ 120,000. This is the amount of funds you need when you reach 50 years of age. As much as $ 120,000 you buy stocks or mutual funds with a yield of 4%, then you with a passive income of min 4% will get $ 4,800 every year or $ 400 per month.
If your income is $500 per month then your estimated cost of living is $400 per month. If we calculate the pension fund with the formula 4% then your annual expenses are $ 4,800 times 25 is $ 120,000. This is the amount of funds you need when you reach 50 years of age. As much as $ 120,000 you buy stocks or mutual funds with a yield of 4%, then you with a passive income of min 4% will get $ 4,800 every year or $ 400 per month.
Yusra3
VIP Contributor
It's a good idea to save as much as you can for retirement, but if you're just starting out and have no idea how much money you'll need in the future, it's best to start small.
An easy way to save is by setting up automatic contributions into your 401(k) or IRA. You can also set up a Roth IRA, which gives you tax-free growth on your contributions and withdrawals at retirement.
The best way to figure out what to save is by taking a look at your expenses and determining how much money you need to live on each month in retirement. Once that's figured out, divide by 12 (months) to determine how much each month should be saved.
An easy way to save is by setting up automatic contributions into your 401(k) or IRA. You can also set up a Roth IRA, which gives you tax-free growth on your contributions and withdrawals at retirement.
The best way to figure out what to save is by taking a look at your expenses and determining how much money you need to live on each month in retirement. Once that's figured out, divide by 12 (months) to determine how much each month should be saved.
Augusta
VIP Contributor
You can start a good thing anytime there's no specific time for it. So you can start today to save as much as you can for retirement, you are not too lste. You can take the next ten years to do this. The thing is just to start today. Starting out is easy you might not have the faintest idea on how much money you'll need in the future, but you would do well if you i start small and today
Anyway, you can figure out what to save by taking a look at your expenses and determining how much money you need to live and save on each monthly for retirement then go ahead.
Anyway, you can figure out what to save by taking a look at your expenses and determining how much money you need to live and save on each monthly for retirement then go ahead.
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