Making everyday easier


Retirement amount: How much money do I need to retire?

Experts say the retirement amount is around 25 times your yearly net expenses. Let’s get more into it.

  1. Calculate your monthly expenses. 

Make a list of every single expense that comes out of your checking and credit card accounts in any given month. Remember that there are payments that are quarterly or once a year, like city taxes or car maintenance. You need to estimate a monthly amount to add it to the monthly list. I like to divide my monthly expenses into 2 categories:

  1. Basic Expenses: These are the ones that need to be covered no matter what, like mortgage payments, car payments, insurance, food, bill payments, taxes. Take a look at my November 2020 expense list!
  2. Extra Expenses: These are the ones that I would be able to cut if let’s say I lose my job. Example: Recreational spend, personal spend, gym membership, savings.
  3. Once you have the monthly amount then multiply it by 12 to have a yearly amount.
  4. If let’s say, your yearly expenses are $40,000; then your retirement amount is 1 million dollars (40,000 x 25). 

This 1 million dollars means that you need to have a net worth of that amount or investments equivalent to it.

On the next post, we will be covering net worth.

Have a great day!



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