retirement number

Problems do not go away. They must be worked through or else they remain, forever a barrier to the growth and development of the spirit." – M. Scott Peck But your retirement "number" is the amount of money you have to save specifically for retirement. It is a fund of assets that will eventually replace your active income and pay for your expenses... after you've quit your nine-to-five job. Many people enter their forties and fifties are "ensconced in a cloud of avoidance and denial about the years ahead of them." They spend their early years not doing any serious retirement planning. They sense they are far behind from where they should be, but they don't want to face the truth. These are the procrastinators, Eisenberg says. Other people do retirement planning, but they're sloppy about it. They don't know how to calculate their numbers correctly, so they pick arbitrary numbers and hope for the best. This is the mistake I made when I first retired. Eisenberg calls these people "pluckers," because they pluck numbers out of thin air. You don't have to be either one of these people. You can begin to realize your retirement dreams today by discovering your retirement number. Let's do that now. Let's figure out how much money you have to save in order to quit work and enjoy retirement. To calculate your magic number, you need to know five other numbers: 1. How much money you have saved. 2. How many years you have to save money before you retire. 3. How much money you will need in order to enjoy the retirement you want. 4. What rate of return you expect to get on your savings. 5. The average rate of inflation. Take These Five Steps and You'll Have Your Magic Number! I am going to give you five calculations. Each one should take just a few minutes. The entire process, including all five steps, should take no more than half an hour. Please do it now. In terms of your future wealth and happiness, it may be the most fruitful thirty minutes you ever spend. But before we begin, I want you to write down two numbers: 8 and 12.5. Step 1: Write down how much money you have already saved towards retirement. This should include not only liquid assets (such as cash, stocks, and bonds) but also any illiquid assets (such as an auto collection or a second home) that you plan to sell prior to retiring. Sell the house you own (if you own one) for a less expensive house more suitable for retirement and add any profits from the sale into your retirement savings. For example, if your house is worth $350,000 and you will be happy in a smaller house that will be $100,000 cheaper, you can add $100,000 to your retirement savings. Step 2: Write down how many years you have before you hit your retirement age. If you are thirty-five years old now and plan to retire at sixty-five years old, that number is thirty. If you are fifty-five years old now and want to retire at sixty-five years old, that number is ten. But be realistic. If your retirement fund is small right now, you might have to work another five years to reach your goal. I told you above that I hit my number before my fiftieth birthday. That allowed me to start writing fiction and poetry several hours a day... and take lots of vacations. Since I still liked my line of work, I continued to spend some time every day as a consultant to publishers. And that turned out to be lucrative. Keep that in mind when you hit your number. Like me, you may decide to keep working on a part-time basis. If you do, you'll be making more than you need. Enjoy it. Don't increase your spending. Step 3: The next step is the one most people start with: deciding how much money you will be spending each year in your retirement to enjoy the lifestyle you want.