One thing I was never taught in school was how to save for retirement. We were taught the basics in my schools accounting class, how to balance a ledger, how to write a check, etc,. Kind of told my age here! After doing a search and reading an article on personal finance in high school, things are not much better today.
I, like so many others, have worked week to week, month to month, trying to make a living, never really thinking much about retirement. As you grow older and realize that there are fewer days ahead than behind, the thought of planning for retirement starts to take a forefront.
According to “gobankingrates“, 56% of americans have less than $10,000 saved for retirement, and 1 in 3 have $0. That is one scary statistic. And if you were thinking of relying on “Social Security”, think again! The estimated average “Social Security” retirement benefit for 2019 is $17,532 yearly. That is not much above the federal poverty level (FPL) for a household of one which stands at $12,490 for 2019. On top of that, according to their own estimates, Social Security will need to be cut by 23% in 2033 to remain solvent. (ssa.gov)
How Much Do I Need To Save For Retirement
This, of course, depends on the lifestyle you want to live during your so-called golden years. It’s okay to dream but, in reality it really depends on the income you’ve earned or expect to earn during your life, and most important, how much you will, or have invested and saved.
There are all kinds of “Retirement Calculators” on the web, and I’m not downgrading any of them. They give you great information. But it’s really simple. What does it cost you per year to live your lifestyle? How long do you expect to live? When do you want to retire? You do have to figure in inflation, which on average has been 2.2% per year for the past 20 years.
So, if you are comfortable on $60,000 a year, retire at 65, and expect to live another 20 years, you need roughly $1.3 million. Wow! When you look at it like this It seems impossible to retire. And sadly, for many, it is. One thing you have to consider is this, let your money work for you. Another way is to create passive income.
Make Your Money Retire You
I’ve never been a fan of 401K’s or Roth IRA’s mainly because your at the mercy of the stock market. A day trader I can understand, a knowledgeable gambler. But leaving your life savings in someone else’s’ hands, in one of the most volatile investment schemes, doesn’t seem like a good investment. On top of that you get penalized if you try and use YOUR money before retirement.
Real Estate is a more secure investment. Real Estate has made more people into millionaires than any other profession. At least up till now. I don’t know the numbers but, I’m sure someone has done the math. How many millionaires have been made through passive income? What exactly is passive income? In short, it is doing something once and earning a re-occurring or residual income. The internet is a 24/7/365 passive income earning platform. For anyone seeking a retirement plan, passive income is probably the most attainable form of retirement for many entrepreneurs.
Retire Before You Retire
Retirement never seemed appealing to me. I guess it’s just a mindset but, to stop working, sit around and drink mojitos, lounging by the pool, is not my vision of retirement. I like work! I will work till I die!
Retirement means I’ve retired from working for someone else and making them money. I’ve retired from the 9 to 5, from the stress and anguish of the corporate ladder. Through public schools we are taught how to think. How to be like minded and good little workers. Critical thinking is discouraged. To re-iterate the first paragraph in this post… personal finance needs to be taught to our children. We live in a world built around finance, why haven’t our youth been taught to use it properly. The powers that be want them ignorant and dependent on them.
Again, thanks for reading. Any comments or questions – good or bad – are welcomed below.