How can we create a complete picture when the puzzle pieces are unknown and constantly changing? The retirement of your dreams can’t be guaranteed, but we can increase our chances by setting achievable milestones throughout our working career and allowing for a large margin of error.
Keep in mind that those salaries correspond with the salary at that specific age. So, if your salary is $100,000, you want $600,000 set aside at age fifty. If at 60, your salary is $250,000, your savings should add up to $2,000,000.
By following these basic steps, you should reach the amount of money needed for retirement. If you are starting late, there are other ways to catch up, such as catch-up contributions or even delaying retirement!
Fortunately, you’ll probably have fewer expenses in retirement. You’ll no longer have to sock away 20% of your income, which is already a massive burden off your shoulders. You’ll feel even greater financial relief if you can reduce your annual expenses by 20%. You can do this by going into retirement with no significant debts such as a mortgage, car payment, or college tuition payments for the kids.