I Want to Retire at 50 How Much Money Do I Need - I used to think I’d like to retire at the age of 50 and was curious as to how much money I’d need, but the more I learn about how much I need to save and how retiring early can be bad for your health, I’m less inclined.
Being able to retire at 50 is not necessarily easily, especially considering how the economy looks these days. But if you start saving money early and plan carefully– it can be done. Granted, retirement at 50 is something only a small percentage of the population gets to enjoy. Statistics show that on average 92-120,000 people between the ages 55-65 retire each year.
I Want to Retire at 50 How Much Money Do I Need?
Before I go into the details, I thought I’d also mention that while retiring at 50 may sound incredibly tempting it also can be detrimental to your health. The British Medical Journal has published studies that have shown that people who retire at 55 are 89% more likely to die in the next 10 years. That’s pretty scary. So I would recommend being financially able to retire at 50 but to plan for a hobby or to finally pursue your dream for your life’s longevity sake.
We’ve published before a piece from a guest writer about Retiring By 40, which I found to be very educational. Rather than writing about retiring that early, I thought I’d share some advice on retiring more towards your 50s.
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I Want to Retire at 50 How Much Money Do I Need?
Retiring early is no easy task, but it is possible. I’d say if you have a partner who also works and no children, this feat is much more attainable. For the rest of us, it might be somewhat of a day dream. Regardless, let’s take a look at what needs to happen.
Determine How Much Money You Will Need
Being aware of how much you need to save for retirement is extremely important information to have for your well being. Even if you’re a young professional, just starting your career– the earlier you begin planning and saving for your retirement the better off you will be. It may sound crazy to begin saving now when retiring seems so far away but once you understand how much you need to save for retirement, it will sound like a much better idea.
Ultimately we all need to ask ourselves,”How much do I need to save for retirement?”
The amount may shock you.
On average, you need to plan on spending 60-100% of your pre-retirement income each year of your retirement. That’s a lot!
For example: A retiree made $50,000 a year before retiring at the EARLY age of 50. Anticipating that they will live another 25 years, they decide to put aside enough so there’s about 80% of their pre-retirement income to spend annually.
80% of $50,000 = $40,000 x 25 years = $1,000,000 needed for retirement! Honestly, this seems like not even enough. If you have kids, you’ll probably need more money or just be willing to change your lifestyle. $1 million for retirement is fine as long as you have no mortgage or are living somewhere cheap or are prepared to spend no more than 40k a year.
So you have a vague idea of how much you’re going to need for retirement. You’ve anticipated illnesses, tragedies, etc. Now it’s time to decide what you’re going to do once you retire so young.
I wrote above that you would think about retiring at the age of 50. These days that’s nothing– so it’s important that you remain productive in your retirement years. Of course I can’t tell you what to do with your retirement– you’ve earned it after all. But studies have shown that people that work longer also live longer.
Pursue something you’ve always loved that won’t drain your bank account.
Live abroad. I think that especially with your savings, living in another country can be the best way for you to enjoy your retirement and live like a king. Retiring Abroad is much easier and much cheaper than staying on your block for the rest of time.
Sell your house and live in smaller digs. Financially it’s the best thing you can do when retiring young.
Start Saving Now
Open up a savings account and start putting away significant chunks of your paycheck now. Any extra money you may come across (bonuses, tax refunds, etc) should go right into your retirement fund.
Invest wisely. Talk to a professional about investing some of your retirement money in something that will accrue over the years.
Take on a part time job to put into your retirement fund. The more you work now, the less you’ll have to down the road.
These are just a few tips on how much money you’ll need to retire by the age of 50. Does anyone else have any to share?
I Want to Retire at 50 How Much Money Do I Need?
