#Shockingly simple math for how to
#Shockingly simple math for free

Less stuff means less hassle and less expense, which gives you more free time to enjoy your retirement. This can save considerable money every month when compared to maintenance, repairs, and insurance resulting from ownership.

Less is more: less stuff means less hassle and less expense. You can use public transportation or rent a car for occasional trips out of town. In addition, if you decide to relocate from the suburbs into the city (for improved cultural and lifestyle activities), you may be able to eliminate the cost of owning one or both of your cars. There are many advantages to a smaller home including lower property tax bills, lower maintenance costs, reduced insurance premiums, and fewer headaches to deal with.īy downsizing your home, you can give your retirement savings shortfall a one-two punch by converting home equity into investment savings, while simultaneously reducing expenses. It’s easy to save $1,000 per month when you tackle the biggest expense items first.įor example, now that your kids are grown and out of the house, you may find yourself with more square footage than you need. To help get you started, I’ve provided 5 simple strategies to help you find the quickest and easiest path to a financially secure retirement, without sacrificing happiness. The only limit here is your own creativity. The key to retiring successfully on less is to find an appropriate level of spending that suits your needs without sacrificing happiness. Want to bridge your retirement savings gap so you can retire earlier? Here are 5 methods to use: Click To Tweetīy learning to live simply, you can enjoy financial freedom sooner.

#Shockingly simple math for how to

The reason is because it points to a clear and simple path for closing the gap in retirement savings.įor example, if you can figure out how to reduce your retirement budget by just $1,000 per month ($12,000 per year), the rule of 25 says you just reduced how much money you need to retire by a whopping $300,000 ($12,000 * 25 = $300,000).įor most people, spending a little less is a lot easier than figuring out how to save another $300,000, especially if retirement is right around the corner and it means having to work longer than you wanted. What that means is you need roughly 25 times your annual spending in savings – otherwise known as the “Rule of 25” – to support this 4% spending habit.Įven if you're math-phobic, the implications behind these numbers are very important to your retirement strategy.ĥ Financial Planning Mistakes That Cost You Big-Time (and what to do instead!) Explained in 5 Free Video Lessons ( For a thorough analysis of safe withdrawal rates, click here.) We’ll assume a very middle-of-the-road 4% for this example to keep things simple. Visit any financial planner and you’ll likely learn about the 4% rule.Īccording to extensive research, most experts agree you can spend somewhere between 3% and 5% (depending on assumptions) of your savings each year during retirement and remain financially secure. Get This Article Sent to Your Inbox as a PDF… Send Me This Article!