For some individuals, once retirement comes they want to maintain their comfort of living and lifestyle. In other words, they don’t want to change they way they live and spend once they leave the working force. Obviously the more money involved to maintain the lifestyle, the bigger the nest egg you’ll need. For example (basic math), if your take home pay is $4,000 per month and you have $1,000,000 nest egg you’ll be able to maintain your lifestyle for over 20 years. This isn’t including inflation, market gains/losses, etc. So if you retire at 65, you won’t run out of money till your over 85. You could even increase your cost of living by $1,000 per month and your money will still last into your 80s.
Now if this individual is willing to lower their cost of living and lifestyle from $4,000 per month to $3,000 per month, over 7 years will be added until the money runs dry (again not including inflation, social security, etc.). That little change in lifestyle can make all the difference in the world for some people. The security of knowing they won’t have to worry about money till they are over 90 years of age bring them happiness. Even if you don’t make to your 90s, you’ll have a larger amount to give to family members and organizations once your gone.
Again, this is very basic math and its meant to be strictly informational. Blowing all your money during your retirement isn’t wrong and neither is stretching every dollar you can till you die. Understanding what you want to accomplish in retirement will go a long way to making your ideal retirement lifestyle a reality. Remember, while money may not deliver true happiness it can definitely speed up the delivery truck.
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About the Author:
Tony Wedge is the owner of Self Help Services. For additional personal finance information and advice please visit his website: www.self-help-services.com.
“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” – Warren Buffet
