What Do You Need To Retire? The Surprising Math For A Better Life

One of the questions that I hear more frequently is, “how can I possibly know how much money I can have to save in order to retire?” The fact is no one really ever gives the same answer, you could talk to 10 people and they would all tell you something different.

On top of that, you have to deal with poorly designed internet retirement calculators, media companies with ulterior motives, then market factors, such as what might be going on in China, inflation and then on top of that, everyone has different spending habits.

The above is not really what matters, the only thing that matters is how much money you make per year and how much of that money you spend versus save.


If you are spending 100% of your income every year, what some call living paycheck to paycheck, unfortunately you will never retire. You will have to work until the day you die.

If you are spending 0% of your income and you expect this to be a sustainable model then you are ready to retire right now.

I have never met anyone that have spent zero money, that is really quite ridicules, but unfortunately I do know people who live paycheck to paycheck. However, most people fall in the middle somewhere.

What most people fail to understand is the time value of money. Once you start saving your money and invest it intelligently that money can grow. Sure when you just compare month to month results it doesn’t seem like much, but over the course of a career these numbers can be shocking.

If you were to just put away a $100,000 today at an annual 10% return it would only take just over 23 years for you to have a million dollars. Okay, so you don’t have a $100,000 to put away today. Well if you start today at zero and just saved $800 a month with a annual 10% return it would only take just over 24 years to be a millionaire.

Now of course no one really needs to be a millionaire to retire, but I just wanted to give you an idea of what savings can actually do for you. Starting right now with zero, if you were to save $2000 a month with an annual 10% return it would take just you over 11 years to have half a million dollars saved and you might just be ready for retirement.

Investing happens to be my expertise.  If I only made 10% a year on my money I would classify that as a bad year. However, most people don’t want to take on that type of risk profile or are equipped with the same investment education that I have in order to manage that risk. But if you can get a 6% return on your investment a year, I think that is very doable.


  • Assuming you earn a 6% return on your investments
  • You live off of 5% after retirement to give yourself a cushion


Believe it or not most people do not save more than 10% of their income, they would rather buy that new, showy car, or that expensive watch, without even realizing it they are adding years of work to the end of their career.

If most were given the choice right now to drive a new car, but they would have to work 10 more years or drive a mediocre car and retire 10 years earlier I think the majority would pick to retire 10 years earlier. The problem is that most people do not think about the financial differences and the long term effect of their decisions. They simply calculate the cost of the car and how long it will take them to pay it off.

Small changes can make big differences too. Making sure you have the most affordable cable package for your needs, or just cut off cable completely and sign up for Netflix. Make sure you have the best cell phone plan possible.  Also, take the time to look through other expenses as well and see where you can save. In my area there are two competing trash companies, I simply found out which one was cheaper and chose that one.

It’s not difficult and the time to invest is minimal, but still most people don’t take the time to help themselves.

The first step is understanding what you get paid monthly. Then, think how much of that you intend on spending and how much you intend on saving. Then, for the money you save, how are you going to invest it. Please do not just store it in the bank, that is not going to increase the value of your money.

Most of my spending tracking is done by credit cards or with my online bill pay account.  This way I can simply know exactly what I am spending and on what. If you need more help, there are online tools and apps to track exactly what your spending as well. My favorite websites is Personal Capital, which emphasizes investing and saving for retirement. You can track expenses and create an investment plan for the future.

Now it is up to you to make it happen, remember, no one is going to care more about your money than you.

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