Can You Retire on $1 Million


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For the last decade the biggest question in many people’s minds has been the state of the economy. Many are wondering if their savings are enough to help them survive retirement. In recent years many are looking or that perfect number for their nest egg and wondering if that number which seems to escape most, might be $1 million dollars. So the question that remains is, can you retire on $1 million dollars?

The Problem of Saving for Retirement

Saving for retirement has never before seemed to be such a monumental task. The slipping of the job market has driven many into elongating their plans for retirement. With the housing market only slightly recovering, many are selling or short selling their homes in order to lower their total monthly expenses and renting. Many had sunk their savings for retirement into their homes and looked to profit off the sale of their homes to fund their retirement and no longer can. So the new problem with saving for retirement is how can you save effectively without bankrupting your current lifestyle? Many people have been looking for that perfect number. If I raise X amount of money for my nest egg, will that be enough? Often the answer is not as easy to come by as the question.

Understanding the Weight of $1 Million Dollarsretire

Can you retire on $1 million dollars? Yes, but that is depending on what you need to make per year to suffice. If you need $40k a year in order to live, then $1 million dollars should be enough. Likewise if you need double that to live per year than the $1 million would turn to $2 million dollars that needs to be saved up in order for one to be able to live financially secure in retirement. A study released by Wells Fargo states that one shouldn’t look at an overall number like $1 million dollars to be the end result of their retirement savings but rather about 10 percent of their net yearly income. In essence as you cost of living changes depending on what you are making per year as well as your cost of living based on where you live will change as your progress through age.

People are Living Longer

One mustn’t forget that people are living longer. One of the biggest issues going on with current retirees is that they are outliving their retirement funds. The current retirees hadn’t accounted for their generation living longer, the constant rise of the cost of living and perhaps the relatively un-foreseen severity of the current economy. So when you are planning for your retirement it is important to plan for a longer lifespan and possibly more importantly those extra precautions of life’s unpredictable costs. One of the best ways to plan for your retirement is to take a portion of your retirement funds and invest them! No one is saying that you should take 50 percent of your funds and throw them into any sort of get rich quick type of scheme, but investing conservatively can have long term payoffs.

retire 3Where is Your Nest Egg Headed?

Understanding how you are saving for your retirement is just as important as the direction those finances are headed. If you plan to be able to retire on a set number, it is important to understand where that number may lie. Many experts are currently debating whether or not people are saving enough or saving too much. While the newer generations are currently on an overhaul when trying to save. The biggest issue facing much of the current working force is not the question of how much to save but rather how best to save and accumulate those funds. With the job market as volatile as it has been for the last few years many people are living pay check to pay check, making retirement seem further and further away, if possible at all.

It is possible to retire on $1 million dollars pending that fits your lifestyle budget. And for many people it does. The key to financial success and security in your golden years is through positive savings and smart financial investment. Understanding how to wisely invest a percentage of your retirement funds in more than just IRAs, 401k’s and pension funds will give you the ability to fund not only your later years, but the passions you intend to enjoy during them. If you can successfully plan for your future taking in consideration the constant rise of the cost of living, financial rainy days, and an ever changing stock market, then it is possible that you can continue to constantly save invest further into your long term retirement. $1 million dollars may have once been the number dreamed to reach, but it has become a revolving door in terms of funds. In essence, between checking and savings accounts, IRAs and stocks may all need to total up to $1 million dollars in order for you to retire on that number

 

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