![]() ![]() There's no hard and fast rule on how to retire. Tips on saving for a comfortable retirement This rate will affect your distribution's purchasing power. The Bureau of Labor Statistics reported the CPI as 1.2%. From 1925 to 2020, the long-term inflation rate averaged 2.9% annually. The Consumer Price Index (CPI) is a common measure of inflation. Since you don't have to sell stocks during markets, your savings can last for the long haul. The 4% rule can help your money last even longer than 30 years of retirement. He tested his theory across different recessions, even the Great Depression, and discovered 4% was a safe withdrawal rate. This strategy was based on research by William Bergen. The 4% rule remains a safe withdrawal rate even during the worst market downturns. With each successive year, take out that same dollar amount plus an inflation adjustment.During retirement, withdraw 4% out of your savings the first year.Make sure you can cover these expenses with guaranteed income, such as Social Security, bond ladders or an annuity.Figure out how much you need for basic expenses, like housing and food.Invest roughly 60% of your money in stocks and the rest in bonds.At this rate, your money should last roughly 30 years. The 4% rule says that, if you invest 60/40 in stocks and bonds, you can safely spend 4% of your nest egg each year. How long will my money last using the 4% rule? Nearly 40 million working-age households (45%) do not have any retirement savings.The average Social Security benefit for retired workers is $1,461/month.47% plan to rely on Social Security as their primary retirement income.The average household with retirement savings has $60,000 saved.Once you have that number, see if your retirement savings can afford that lifestyle. It's pretty quick and easy to figure out if you're saving up enough to cover the lifestyle you want. How do you calculate your retirement expenses? With this calculator, get an estimate of bills and expenses you'll have to pay in retirement. Are you sure you can afford the lifestyle you want? After many years of hard work, it's finally time to relax!īut before you kick back, you'll want to ensure your finances are in order. ![]()
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