Retire In Ten Years

AARP Finance
What will it cost to retire in ten years for someone who is now 30?

Lets play around with some figures for someone in California

Part 1.If you own a house you might have a problem so I will assume you rent a house

Part #2: Estimate remaining expenses Things now simplify greatly. What else do you need to pay for in retirement? This is for two people, children will increase some items. I will ignore scary things like college tuition. All costs are monthly with some padding.

Food, both groceries and dining out: $600
Communications + Utilities: $350
Gas, not much need if retired: $200
Transportation, amortized cost of one car: $150
Housing rental: $2,200
Clothing, Entertainment, Travel: $250
Healthcare: ???

Total without healthcare: $45,000 per year.

So how much will health insurance cost? This is a huge unknown. if you are relatively healthy now, but who knows. Let’s say you get an individual high-deductible health plan for $100/month per person and get cancer (knock on wood). Can the insurer drop you or raise rates? I don’t know the answer, but I’m guessing they can at least raise rates at some point.

It’s possible that within the next decade we will have some form of universal healthcare system. If not, you may need to investigate ways to get on a group plan somehow. I will put in a wild guess of $8,000 per year.

Total with healthcare: $53,000 per year (after-taxes)

Part #3: Set up portfolio to retire in ten years produce this income Using current tax brackets, you will have to pay very little income tax to achieve an after-tax income of $53,000 per year. For federal taxes, the first ~$18,000 is not taxed at all, and the rest would be taxed at 10% (married filing jointly). That’s an overall tax rate of less than 5%. assume no other pensions or other annuities, just maybe Social Security down the road.

(Side note: If you have no other income from sources like pensions or annuities, this means you should lean towards contributing to Traditional IRAs and 401(k)s exclusively right now instead of Roth’s since your tax rate in retirement should be very low - much lower than you might have guessed before.)

Anyhow, if we use a 4% withdrawal rate, you would need $1,400,000 in today’s dollars. Estimating returns at 4% annually, with inflation at 2%. Saving goal would be $1,400,000 in 10 years, you would have to save $10,000 per month for 10 years,

Bottom Line
You need to find a better paying job and or move somewhere cheaper to live. But there is another alternative a home based business opportunity here you could retire in ten years as it could produce an annual income of around $55,000 per month and the monthly outlay is around $1,250 per month

I can show you a business model prepared by economist Dr Raymond Jewel which can be customised to meet with your own circumstances and required retirement income. A live opportunity will be presented every Thursday at 6PM EST in our conference room at http://tomorrowshomebusiness.butchhamilton.com select room log-in from top menu and enter first and last names and the password success.

David Ogden
TriVita Independent Business Affiliate 13142173
Phone 1-386-308-1956
Skype Seadogs11
How to Retire In 10 Years
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