How Much Do You Need Per Year to Live in Retirement?

If you have a comprehensive retirement plan, you might feel secure with Social Security and your Health Savings Account (HSA), especially if you have a paid-for home. However, this security is only a small part of the bigger picture. You need to account for your share of the national debt and the underfunded promises made during your lifetime.

To build a robust retirement plan, consider making the maximum contributions to a ROTH tax-sheltered investment account for 25 years. An index fund mirroring the SP 500 has proven to be an effective strategy. Similarly, an HSA can be quite similar to a small traditional IRA, with the added benefit of tax-free out-of-pocket medical expenses after the age of 65.

Why Build a Legacy Plan?

The construction of a legacy plan is not just about securing your personal financial health. It is about ensuring that future generations have a fair chance, even when they did not have a voice in the decisions that impact their lives.

Future generations often face a burden of outrageous taxation and expansive government spending, without any say in the matter. This was a significant reason for the American Revolution 250 years ago. While the task of curbing government overreach might seem insurmountable, every individual can play their part in making a fairer playing field for future generations.

What Do You Need Per Year to Comfortably Retire?

Retirement costs vary greatly depending on your cost of living and lifestyle. Therefore, it's crucial to have a robust financial plan and understand the necessary savings to maintain a comfortable lifestyle post-retirement.

Managing your money wisely is key. If you haven't already learned this, start now by having a job and saving your first paycheck. Resist the allure of spending money on luxuries like rock concerts or expensive date nights. Instead, prioritize saving. It's a prudent habit that will serve you well in the years ahead.

Financial Planning and Automation

Let technological advancements do the heavy lifting for you. There are numerous financial apps available that can help you calculate your monetary needs after retirement. Use these tools to create a rigorous plan and stick to it.

Start by compiling a list of your current expenses. This will serve as a baseline for your post-retirement spending. Add an additional 3% per year for inflation. Remember, the key to a comfortable retirement is developing good financial habits and sticking to your plan.

Conclusion

Building a retirement plan is not just about securing your financial future; it's about ensuring a fairer future for generations to come. By making wise financial decisions and planning ahead, you can secure a comfortable retirement and contribute to a more equitable society.