Many Americans are not doing the math in retirement.
More than 75% of people planning to retire have not calculated how much money they will need before making the leap, according to the investment firm Edward Jones’ Four Pillars of New Retirement 2020.
Fortunately, CNBC analyzed the numbers and we can tell you how much you need to save to get $ 50,000 in passive income every year in retirement.
First, some basic rules. The figures assume that you will retire at age 50, have no money in savings now, and plan to spend a substantial amount of your income to reach your goal.
To invest, we assume an annual return of 4% when you are saving. We do not consider inflation, taxes or any additional income you may obtain from Social Security and your 401 (k).
In retirement, we use the “4% rule”, which is a general principle that says you can comfortably withdraw 4% from your wallet every year.
It is important to note that, with the recent market volatility, there is a risk that you will have to reduce the percentage of spending in the future.
Check out this video for a complete analysis of the numbers.
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