How much money to retire can be quite easily calculated after you have worked through your retirement and financial plans.
After completing these you will have a clear picture of what retirement means for you and what it might cost.
However getting a meaningful answer is not that easy.
Money is something you got to make in case you don’t die ~ Max Asnas
In your plan you will have defined your retirement goals and set out your financial objectives?
You will have also carefully worked through your planned retirement lifestyle and considered any health contingencies.
So after deciding these, calculating how much money to retire is simply adding together:
When you have this amount your answer to the "when can I retire" question will be ... "right now".
However many Baby Boomers will never have enough money to retire and will probably have to rely on some kind of external financial support to exist.
For older Americans surveyed by Allianz Life Insurance Co., death is not such a big deal. That is, not when compared with the threat of a dwindling bank account. In a poll of people between the ages of 44 and 75, 61% said that running out money was their biggest fear. The remaining 39% thought death was scarier. The context of the survey is important. In the poll of 3,257 people a whopping 92% of respondents agreed that "the United States is facing a crisis in its retirement system”.
Recently I heard a sad story about an old woman in her 90's who was considering trying to get a job as she had run out of money.
Many of the how much money to retire calculators lead you to believe that the future will look like the past. It won't, so you must be as pragmatic (pessimistic) as possible when making your assumptions.
If you think back, the world, and your life, has not been shaped by predictable, expected changes but by so called "black swans" or highly unpredictable happenings.
However, as they are unpredictable, we must just ensure that we continue to regularly re-evaluate our plan based on changing circumstances.
The rule of thumb estimate assuming the same standard of living, is that your retirement income should be about 70-80% of your pre-retirement income. However this can vary significantly with different personal circumstances.
Your increased leisure time may allow you to take up an expensive sport or hobby. International travel may also become an attraction. Both will result a large increase in calculating your how much money to retire and quickly gobble up any potential savings.
Also you may have to consider providing financial support to aging parents who may live on for another 10 to 15 years.
Although social security is available in many First World countries it is either totally inadequate or non-existent in many Third World countries. This will result in growing demands for the elderly competing head on with resources required for the children.
Remember that, for almost everyone, retirement will be the biggest event you've ever planned in your life. There are many unknowns ... so be aware.
Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money
~ Jonathan Clements