Retirement planning

Tim:

I like working, thereforeI have no plans to retire. That idea might change in the years to come, so I'm planning right now so that I can retire from day-to-day work as soon as I feel I want to. Options give us power.

There are many confusing ideas surrounding the business of retirement savings. Like everything in my life, I try to simplify. My research has led me to define one Power Goal in this area, and it comes from Ben Stein. Ben has written excellent books and articles about personal finance, and I have taken this rule of thumb as my own:

"You should accumulate an amount equal to roughly fifteen to twenty times what you need anually what you need to live on." That amount is represented by cash and investments over and above the value of your house, your car and any pensions or social security to which you might be entitled.

If you need $50,000 per year to live when you retire, at say age 65, you will need between $750,000 and $1,000,000 worth of investable money to lead a fun retirement.

How is your planning going?

There is another alternative, called residual income. Residual income is money that accrues to me, no matter whether I work or not. Either way, we all need to think seriously, plan, and take charge of our needs for the later years.


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