How Do I Know When I Have Enough Money to Retire?

today's question comes from dominic in new jersey and he asks how much or a rule of thumb should be my target for retirement my current goal is to achieve around 3 million before the age of 62 to 67 depending upon my retirement medical benefits i currently max out my 401k and have a roth ira but still feel like it won't be enough is there an ideal amount well here's the reality dominic is we've developed a free tool that is going to help you with this it's called the riq the retire inspire quotient a free tool once again at my website chrishogan360.com that will help you understand your ballpark number but it'll take it a step further my friend and show you how much you need to be investing to get there now you're maxing out 401k so you're putting 19.5 away in it and if you're over 50 you've got an extra 6000 you could do on a catch-up provision as well as your iras you don't tell me your age but i'm going to tell you this if your goal is to have around 3 million and you're following the baby steps you're going to have more than enough right because it's going to depend on your lifestyle how much you want to travel how many mission trips do you want to do and how much giving so the good thing is is you want to take control and you want to be the guide of that and what you're spending and how you're living yeah that the you need to know your retirement iq your iq that's a good thing and some good rough and dirty numbers are this okay if you do what we teach you say 15 of your household income now we don't know your age and we don't know um your income but the average household income in america is just under 60 000 59 and some change okay and so if you save 15 of that from age 30 to age 70 you would have about eight million dollars in a good mutual fund if i'm half wrong you still got double what you're projecting and the three million mark here's a good number okay let's say let's just make up numbers let's say you made ten percent on your money at three million dollars what is that that's three hundred thousand a year if you made ten percent you could pull three hundred thousand a year off and not touch the three million just the golden eggs but don't touch the goose if you pulled off eight percent that'd be 240 000. so as long as you think you can live on that then 3 million will be enough the trick is to try to have a nest egg that you can live off of the money that it creates the way you're willing to invest it without touching the egg that's right i keep mixing the metaphor up here but don't crack and scramble the nest egg or don't shoot the goose that's laying the golden eggs there's another way of saying it the principal amount your base amount is your goose and you know you leave that as an inheritance if you want to burn through it you can burn through it it's your money do whatever you want but you can you can create a perpetual motion machine that will sit there and spit off golden eggs as long as you don't shoot the goose that's right and here's the reality you get yourself out of debt you don't have the requirement for as much so that allows you to be more in control of your lifestyle and what it is you're doing you can always find something to do with it oh yeah give it i mean and there's other you know there's another place to travel you haven't been with the car to buy you and bought and there's other stuff you can do there's ways you can enjoy it with outrageous generosity and um i've never met someone that goes i have too much no me neither i have met people who are spiritually inept and they never get to enough because they don't they can't reach contentment as an independent discussion apart from the amount right but in terms of the math part i've never met somebody went yeah i just i screwed that up i got double what i should have had i never hear that no i've never either so if your three is six or your six is 12 million then that's okay that's all right i never dreamed i would end up where i am today when i was broke and starting to invest i just wanted to reach enough that i could live off the income of it and once i reached that then i just kept going uh but not because i'm greedy or piling up money or i'm building bigger barns or i'm you know it's i can increase my generosity and i can increase the fact that i change my family tree and you know if if i've got my way if i teach my kids and my grandkids and i leave them money this could be the dumbest ramsay in the stretch of family tree i could have changed the whole stinking thing yeah you really good get rid of the stupidity and the brokenness all in one generation just leave it all with this one with the old man that did it he's the one that changed it you know and that's that's cool that's a cool goal to have so i think he's in a great shape there i do too now once again if you're out there and you're thinking okay how much do i need well again the riq is the retirement tire inspired quotient free tool that allows you to plug in numbers plug in and how much you want to live on and how much and how long and it's a tool so you can change the rates of return and withdrawal rates the goal is is to make people more aware of why you're saving your 401k becomes your paycheck later right so we've got to put money in to be able to grow to outpace inflation so you have a paycheck later and that's what dave was just talking about so check it out chrishogan360.com

Channel: The Ramsey Show - Highlights

Views: 468,065

Rating: 4.8687773 out of 5

Keywords: the dave ramsey show, budget money debt cash, real estate, insurance, how to make money, dave ramsey, save, credit card, compound interest, buying house, buy, snowball, How Do I Know When I Have Enough Money to Retire?, retirement, retirement planning, money, savings, investing, saving for retirement, financial planning, early retirement, retirement savings, finance, personal finance

Id: uggSmPDo-Zw

Length: 5min 31sec (331 seconds)

Published: Mon Aug 31 2020