multiply
How much should you spend in retirement?
I spend a lot of time talking with people who have retired early or are otherwise financially independent. From a purely anecdotal point of view, I’d say most of these folks are well-adjusted. They work to maintain balance in life, and especially with their personal finances.
That said, I’ve noticed that a lot of retirees — early retired or otherwise — struggle to know how much they should spend. I believe this dilemma exists for a couple of reasons:
- First is the life expectancy problem. You don’t know how long you’re going to live. If you did know the precise date of your death (or even the year of your death), retirement planning would be much easier. You’d be able to say, “Okay, I have ten years left and $300,000 in the bank. Based on that, I should be able to spend $30,000 per year.” But you don’t know when you’re going to die, so a lot of retirement planning becomes guesswork.
- Second is the question of what your money is for? Do you want to leave a legacy for your children (or somebody else)? Do you want to maintain a chunk of change for possible end-of-life medical issues? Or do you want to use your wealth to live life to the fullest while you can? In my case, my ideal would be to die broke. If I could spend my very last penny on the last day of my life, that’d be perfect.
The general response to these two problems is to follow what has been dubbed the four-percent rule. Generally speaking, itâs safe to withdraw 4% from your portfolio every year without risk of running out of money. (There are a lot of caveats to this guideline. To learn more, follow that link to my Money Boss article — or wait for that story to migrate to Get Rich Slowly in a few days!)
The AAII Journal — the monthly magazine from the American Association of Individual Investors — has published two articles in recent months about the problem of spending in retirement. Let’s look at what they have to say.
What States Have the Most and Least Expensive Property Taxes?
Many people do not realize how much property taxes vary in each state. Some states have property taxes that are ten times the taxes in other states. If you live in a state your entire life you may be used to it but if you move around a lot or invest in real estate in … Read more
You’re Probably Using the 4% Rule All Wrong
The 4% rule is the most popular shorthand in retirement planning. And you’re probably using it wrong.
How to Save for College: The Ultimate Guide for Parents and Students
For many, college is a door to a prosperous future, and it elevates feelings of excitement and brings a taste of freedom. Itâs a younger studentâs chance to become an adult, learning both life and book smarts. Itâs an older studentâs opportunity to broaden their horizons and grow their passion or career. For whoever is
The post How to Save for College: The Ultimate Guide for Parents and Students appeared first on MintLife Blog.
What is Compound Interest on a Loan?
In this article, you will learn what compound interest is, how compound interest works, and what the benefits and drawbacks of compound interest are. Â
The post What is Compound Interest on a Loan? first appeared on Total Mortgage.
How Much Does it Really Cost to Rent a RV?
As a child, my mom and step-dad would take me on RV trips all across northern California and Nevada during the summer. I remember it being some of the best memories of my childhood. I knew that when I got older that a RV trip was in store for the Rose family. I just didn’t realize […]
The post How Much Does it Really Cost to Rent a RV? appeared first on Good Financial Cents®.
What Is Debt-to-Income Ratio and How Is It Calculated?
Your debt-to-income ratio, or DTI, signals your ability to repay a loan to your lender. A higher DTI means you carry too much debt compared to your monthly income, which could pose a greater risk to your lender.Â
The post What Is Debt-to-Income Ratio and How Is It Calculated? first appeared on Total Mortgage.
Where to Find Free Financial Resources in College
Did you know, most universities are brimming with free financial resources for students – all you need to know is where to look. Here are a few options.
The post Where to Find Free Financial Resources in College appeared first on MintLife Blog.
15 Money Making Apps To Make Cash Fast
Here are some of the best money making apps as well as apps that can help you to save money with only minimal effort. Here’s an in depth look.
The post 15 Money Making Apps To Make Cash Fast appeared first on Bible Money Matters and was written by Marc. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.