How much do I need to support myself for a long retirement

After all, if you underestimate how much savings you need or overestimate how much you can withdraw, you may run out of money while you’ve still got a lot of living to do.Unfortunately, many people are getting this key question wrong and, in so doing, potentially putting canada goose shop uk their retirement security at risk.For example, when Fidelity Investments recently asked more than 1,000 55 to canada goose outlet germany 65 year olds as part of its Retirement IQ canada goose premium outlet survey what percentage of salary financial pros recommend retirees withdraw annually in retirement, nearly 20% said the suggested figure was 10% to 15% canada goose outlet store montreal a year.Applying that answer to your question, that suggests that many pre retirees would believe you can count on getting $60,000 a year of income from a nest egg as small as $400,000 ($60,000 divided by $400,000 equals 15%).In fact, if canada goose outlet 2015 you withdrew $60,000 from a nest egg canada goose outlet london uk of $400,000 and adjusted that initial withdrawal for inflation canada goose outlet near me each year to maintain its purchasing power, you would have very little chance that your savings would last anywhere close to canada goose outlet locations in toronto 30 years. Indeed, Fidelity estimates that a withdrawal rate of 10% or more could deplete your savings in less than a decade.Calculator: Are you behind on retirement saving?So how much can you reasonably withdraw from a nest egg without putting yourself at a high risk of outliving your savings or, to put it another way, how large a canada goose uk site nest egg should you have to support a specific level of inflation adjusted annual income?I’d love to give you a single figure that everyone agrees is ideal. But I can’t because there isn’t one. For years, “The 4% Rule,” which is based on research now retired financial planner William Bengen did in the first half of the 1990s, was canada goose jacket uk the standard for setting your withdrawal rate if you wanted a high level of assurance that your nest egg would sustain you for 30 or more years. Under this rule, you would start with an initial withdrawal of canada goose outlet uk sale 4% and then increase the dollar amount of that first withdrawal each year for inflation.In your case, that would mean you would need a nest egg of about $1.5 million to support real, or inflation adjusted, withdrawals of $60,000 a year.Some experts believe you can push the envelope a bit. Fidelity, for example, suggests an initial withdrawal of no higher than 4% to 5%. Assuming a 5% withdrawal rate, you would need a nest egg of about $1.2 million to get a real income of $60,000 a year for 30 years.But others are more cautious, in large part canada goose jacket outlet uk because they believe today’s low interest rates and lower than average projected stock returns call for lower withdrawal rates. For example, Wade Pfau, professor of retirement income at The American College who calculates a variety of sustainable spending rates for his Retirement Income Dashboard, thinks an initial withdrawal canada goose outlet in vancouver rate of roughly 3% is more appropriate given today’s investment landscape. At a 3% withdrawal rate, you would need a nest egg of $2 million to support an inflation adjusted annual income of $60,000 for 30 years.Given such a wide range in your case, from a low of a $1.2 million nest egg assuming a 5% withdrawal rate to a high of $2 million if you figure on a 3% rate how can you set a reasonable target for the size nest egg you should build and then canada goose parka outlet decide how much you should withdraw from it after calling it a career?To some extent the financial reality of how much you earn, canada goose outlet online reviews what you’re realistically capable of saving and how canada goose outlet new york city much income canada goose victoria parka outlet you need in retirement will govern how large a nest egg you can expect to build during your career and how much you draw from it.Based on canada goose outlet england the figures in the Employee Benefit Research Institute’s most recent report on 401(k) balances, I doubt that many people will be able to accumulate enough savings during their canada goose factory outlet career to live comfortably on a 3% withdrawal rate. In your case, that would mean saving enough to build a $2 million nest egg.Calculator: How much will I canada goose outlet los angeles need canada goose uk for retirement?But even canada goose outlet if someone needed retirement income of $60,000 a year and could count on Social Security for, say, $20,000 of that income in canada goose outlet store toronto other words, $40,000 a year would come from savings that would still require a nest egg of about $1.3 million at a 3% withdrawal rate ($40,000 divided by 3% equals $1.3 million). That requires a lot of saving during a career. Even with a 4% withdrawal rate, such a person would need to accumulate $1 million. That’s no easy feat either.Conversely, if someone has managed canada goose outlet black friday to accumulate a sizable http://www.mycanadagoosejacket.org nest egg, the question then becomes whether a given withdrawal rate will provide enough income in conjunction with Social Security to help that person maintain his or her pre retirement standard of living.For example, $1 million in savings may seem like an impressive sum, and it is. But at a 3% withdrawal rate, canada goose outlet london that seven figure nest egg would generate just $30,000 of inflation adjusted income a year. My guess is that many people who’ve managed to set aside enough to accumulate a million bucks in savings would have a hard time living the lifestyle they envision while limiting themselves to a $30,000 a year savings withdrawal plus Social Security.All canada goose clothing uk of which is to say that while estimates of what size nest egg one should try canada goose outlet belgium to accumulate and how much one should withdraw each year from that nest egg in retirement can be helpful as a rough guide for one’s retirement planning, at the end of the day we all have to do the best we can canada goose outlet jackets given the resources we have.If you’re saving for retirement, that means trying to canada goose outlet ontario stash away about 15% a year or so throughout your career. If you can do more, great. You’ll end up with a larger nest egg and stand a greater canada goose vest outlet chance of living the lifestyle you envision in retirement.If you can’t do 15%, start with a smaller figure, say, 10%, and try canada goose outlet parka to save more as your earnings increase. (To the extent your employer kicks matching funds into your retirement savings plan, that can reduce the burden to reach those savings targets on your own.).

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