Tuesday January 17, 2012

Can You Retire Early?

Whenever you decide to retire, it’s important to enter your “golden years” with a positive frame of mind that you can maintain your standard of living for as long as you live. While it is possible that you may start a new career or business, receive an inheritance, or invest very successfully, it’s prudent not to count on these possibilities too much. Plan conservatively, and your confidence in making a smart decision will increase.

A Retirement Income Planning Tool

Use the table* below to estimate how much retirement income per month you may need in the future per $1,000 of monthly income in the first year of retirement. Example: At 4% assumed inflation, in 20 years you would need $2,191 for every $1,000 you need in the first year of retirement.

Year of Retirement       Assumed Inflation Rates

                                         3%          4%             5%
                 5                 $1,159      $1,217        $1,276
               10                 $1,344      $1,480        $1,629
               15                 $1,558      $1,801        $2,079
               20                 $1,806      $2,191        $2,653
               25                 $2,094      $2,666        $3,386
               30                 $2,427      $3,243        $4,322

*The figures shown are examples, for illustrative purposes only, and do not reflect actual or projected rates of inflation in the future.

For more information on early retirement, view Rich White's article (click here).

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