Tad Hill, CRPC®, RFC® · Freedom Financial Group
The Retirement Income Decoder: Simplifying the Numbers
How much do you need to save to retire comfortably?
What would you need to put away today to retire on $100K a year without touching your principal?
Those are heavy questions that can overwhelm any of us, especially if we don’t know how the big numbers really break down.1
And if you’re like most folks, navigating the maze of retirement planning can feel daunting.
Here’s the good news. You’re not alone.1
It’s not too late to get your retirement goals on (or back on) track, and you don’t need a complicated plan to do it.
The key isn't necessarily a complex strategy; it's about having a clear understanding of the numbers and what they mean.
With the right knowledge and planning, you can build a retirement fund that will allow you to live comfortably—without potentially depleting your nest egg.
In this Visual Insights Newsletter, we'll break down an example of how much one may need to save to potentially generate $80K, $90K, or $100K in annual income after they stop working.
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Retire on $100K a Year Without Touching Your Nest Egg?
ASSUMPTIONS
To run the numbers, here are the assumptions:2
- You start with $0 in retirement savings.
- You start saving at age 25, and you retire at 65, saving for ~40 years.
- Your retirement investment will earn ~6% a year while you work and ~3% a year when you retire.
- Your nest egg will include some combination of stocks, bonds, and cash, getting more conservative the closer you get to retirement.
We’ll show a few different hypothetical scenarios for 80, 90, and 100K in retirement income. These are conservative estimates, and they don’t factor in inflation, taxes, and other income you may earn in retirement.2
SCENARIO #1
$80K Annual Income in Retirement
If you want to retire on $80,000 a year without drawing down on the principal, you need to:
- Save at least $1,340 a month every year until you retire
- Have at least $2.6 million total in your nest egg by the time you’re ready to retire2
SCENARIO #2
$90K Annual Income in Retirement
If you want to clear $90,000 a year as a retiree without touching your nest egg, you need to:
- Save at least $1,506 a month every year until retirement
- Have at least $3 million total in your nest egg by the time you retire2
SCENARIO #3
$100K Annual Income in Retirement
If you want to draw $100,000 a year without touching your original savings as a retiree, you need to:
- Save at least $1,674 a month every year until retirement
- Have at least $3.3 million total in your nest egg by the time you’re ready to retire2
These are hypothetical examples provided for illustrative purposes only; it does not represent a real life scenario, and should not be construed as advice designed to meet the particular needs of an individual's situation.
It pays to be early and flexible when it comes to something as important as your retirement.
FINANCIAL LESSON:
How to Retire the Way You Want With Less Fear & Stress
Surprised by the numbers you've seen today?
Rethinking your retirement game plan—or wishing you had one to begin with?
Remember, the figures and steps outlined are just an example, not one-size-fits-all answers.
Your journey might look different. Maybe you started saving earlier or later, or perhaps your nest egg is growing at a different pace.
If you're already a client, we've tailored a plan just for you. But plans and goals change, so it might be time to revisit and tweak if needed.
The golden rule? The sooner you start planning, the better. Not only do you unlock the magic of compound interest but you also gain more room to pivot and adapt.
It pays to be early and flexible when it comes to something as important as your retirement.
Life's curveballs can knock us off track—that's a given. Yet, falling off doesn't mean staying down.
We can always recalibrate and aim again, especially with professional advice on our side. So, let's crunch those numbers, set or reset our course, and turn those retirement dreams into real plans.
Tad Hill, CRPC®, RFC®
Freedom Financial Group
http://www.askfreedomfinancial.com
P.S. Sign up for my emails. My subscribers get my best insights!
Tad Hill, CRPC®, RFC®
Freedom Financial Group
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Not receiving our newsletter?
Get insightful info on finances and more in your inbox every month with the
VISUAL INSIGHTS NEWSLETTER
We never spam. By clicking this button, you consent to be contacted by a financial professional, by phone, email, and/or automated SMS regarding your financial strategy. You may unsubscribe at any time. Consent is not a condition of receiving services.
Tad Hill, CRPC®, RFC®
Freedom Financial Group
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Tad Hill, CRPC®, RFC®
Freedom Financial Group
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