Tuesday, March 20, 2007

what you need to retire

i was perusing a money magazine over the weekend and happened to stop on an article about retirement. it suggested that you strive for an income in retirement that was 85% of your pre-retirement income, so you could continue your current style of living.

my first reation was: WHAT!?@!? why would i need such a high income stream? that's ridiculous!

after thinking on it for a bit, i came to the same conclusion.

if i could achieve an income 85% of my current income, i'd be retired now! no, i'd say what you need in retirement is largely dependent on the size of your nest egg. if i had 10 million dollars that i had saved over the course of my working life, i could probably get by without any income -- i could put that 10 million in my mattress and simply make withdrawals from it whenever i needed to buy something.

the only reason i could imagine that i'd need a high income stream would be is if i had little or no savings and did not own my primary residence.

i don't know who writes this stuff out there in the print media, but some of that stuff sounds just plain crazy to me.


The Thinking Patriot said...

You'll need that much income, because the price of healthcare is skyrocketing! Every spare penny will be needed to shore up your arteries, or blast that pesky lump with radiation. If you think I'm kidding, consult an octogenarian near you. Even fantastic health insurance AND Medicare combined can't protect you from the amazingly high costs -- costs which will only continue to rise.

aggressive saver said...

patriot -- great point. i definitely agree that health care will be a major expense in retirement.