Anyone read the Wall Street Journal paper today? There’s this whole section on retirement and whether you’ll have enough to retire on.
How the hell do I know? I find it pretty pathetic that I’m a business person and I technically don’t know how to manage my money. While we had flexibility in b-school, our curriculum required a few core classes in leadership, statistics, and accounting. There was a little known class called Portfolio Management that should have been mandatory! I remember someone commenting that it was the one class that taught him how to manage his money. I clearly missed out.
WSJ article on how much you need to retire: Take however much you will need annually during retirement and multiply by 25. I think $2K/month is sufficient since my home will be paid off by then. Actually, I think that’s more than sufficient. I ain’t going to be out partying into the wee hours when I’m 65 years old. Annually that works out to $24K x 25 = 650K. I need $650,000 the day that I retire. I took what’s in my 401K now, compounded it by 5% (I think that’s a conservative number) over the next 30 years (given a retirement age of 65), and surprisingly, I’m over the target.
That said, I’m a big proponent of maxing out your 401K and Roth IRAs. Since you never see that money because it goes directly into your retirement savings, you won’t really miss it.