Holy Shit it's April.
I use Yahoo!. A lot. Force of habit, really. But I'm thinking of going cold turkey. I made the mistake of clicking on "Two Changes That Will Improve Your Odds of Retiring" today. This is what I found...
No shit, really? If I work longer I'll end up with more money? So, I "will improve my odds of retiring" by...not retiring? Oh, and if I continue to sacrifice and lead a spartan existence, I will have enough money to not enjoy since I will be pissing and shitting myself by the time I do retire/am-deemed-unfit-for-work? Yaaaaaa HOOOOO-a-woooo! Assholes.
1. Working 5 More Years
Fie you could save $15,000 a year for each of those 5 years. The extra savings helps boost the plan barst, consider how much of an impact working five more years could have on your retirement. Let's assume you're 65 and have $1,000,000 in retirement assets. If you could earn 5% a year on those funds, your retirement plan would be worth about $1,275,000 at age 70, or about 28% more than at age 65. That means it could support almost 28% more in distributions.
Plus, let's assum
lance to $1,360,000, or about 36% more than at age 65.
By waiting five years, you've increased your retirement assets and potential retirement income by 36%.
2. Reducing Your Lifestyle
Now let's assume you also reduce your retirement lifestyle expectations by 15%. That means you'll need 15% less in savings to meet your goals.
• For a couple targeting $100,000 of retirement income, that means living on $15,000 less a year. A good rule of thumb for producing distributions in retirement is that every $5,000 worth of distributions will require about $100,000 of assets at age 70. If you reduce your lifestyle needs by $15,000 that means you need $300,000 less in assets to support your retirement.
You might not be happy about the prospects of a reduced lifestyle, but you may find it works just fine if you adjust your expectations. It really comes down to how important it is for you not to work. If that 15% reduction provides you with the freedom to retire, it may well be worth it.