A Reddit user in his 40s is contemplating his retirement strategy as he aims to leave the workforce by age 60. He currently earns $500K but desires an annual retirement income of $200K. Experts suggest he should target generating 70-80% of his current income, amounting to around $350K annually. Calculating based on the 4% rule, he would require a nest egg of about $5 million to ensure financial security in retirement, especially considering costs such as healthcare before Medicare eligibility.
A Reddit user in his 40s earning $500K aims for $200K annual retirement income, but may need to save more based on realistic retirement spending needs.
To maintain a similar lifestyle, one should replace 70-80% of their pre-retirement income, suggesting a target income of $350K for this user.
Setting retirement savings goals involves considering future expenses, including medical insurance before Medicare eligibility, underlining the importance of planning.
Using the 4% rule, to achieve $200K annually, he would need approximately $5 million saved, reflecting the complexities of effective retirement planning.
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