No, your 401(k) is not going to be “enough” to retire comfortably on.
Let’s just quit deluding ourselves about that before we go any further.
There’s good news, though, and it’s simple news: you have a lot of options to save and build wealth for retirement IF you’ll do the one thing far too many folks won’t do…
THAT’S the part that’s so often missing when I share the options to my clients and friends, and that’s what I want to discuss with you now.
In order to have the retirement you want, you have to generate the savings you need. How much do you need? Well, a good way to envision it might simply be to look at how much you spend annually, and then, do the math to determine how much principal (savings) you’d need to generate that money through pure interest payments.
So, if you spend $60,000 a year, at 4% interest, you’d need roughly 1.5 million dollars in savings to create that income.
Of course, such a statement is LOADED with variables. There’s no cost of living adjustment in that math, it assumes things like your housing (or your home) costs are flat (or perhaps lower), and a host of other things.
But in reality, it actually is an achievable number IF you start sooner rather than later.
I know, I know, “It’s one and half MILLION dollars!”
Well, I didn’t say it was going to be easy. I said it was going to be achievable, especially when you begin to have the benefits of compounding interest creating more principal while you’re still in the working world and not touching your retirement savings.
This is also the domain of having multiple resources working for you, not just a taxable 401(k). Things like Roth IRAs, Coverdells, and even income producing assets like real estate.
And this is not the domain of “rich people,” it’s the domain of anyone. Sure, you’ll likely not by a high-rise office building, but there are opportunities to purchase small pieces of real estate – a mobile home that can be rented, a small convenience store, or an older self-storage facility.
The same is true for a Roth IRA, even if you can only put $700 in this year.
The key is you have to want to create this money, and then? With that in mind, you’ll surely find the way to do it. A penny here and a penny there.
They’ll add up, and as they do, you’ll be able to find ways to make that money make more money. It’s simply a matter of mindset.
If this is making you nod your head in agreement, then maybe we should talk further about the options you have. Give me a call and let’s begin building.
All the best,