Money needed to retire today

[krai999]

Okay with the implementation of the property tax. How much would you need to say firetruck it to your job and not need to work for the rest of your life.

[sMASH]

comfortable spending, is about 8k to 12k per month, go with the 12k. per annum that would be 144k. then for a decade, 1.44 mil.
so for 4 decades 5.74 mil. but how pnm are causing the economy to contract unnecessarily, the inflation will be a lot higher as time goes on. so 12k tt isnt going to cut it. if u work out the figures in USd, u would get a better idea, and just translate it to tt per year, according to the exchange rate, which is unpredictable at this time.

[neilsingh100]

This depends on your lifestyle and number of persons in your household. I think lifestyle is the biggest factor since once you get accustom to a certain standard of living it is hard to downgrade. Generally financial advisors use 67% of your current take home pay.

[10-01]

comfortable spending, is about 8k to 12k per month, go with the 12k. per annum that would be 144k. then for a decade, 1.44 mil.
so for 4 decades 5.74 mil. but how pnm are causing the economy to contract unnecessarily, the inflation will be a lot higher as time goes on. so 12k tt isnt going to cut it. if u work out the figures in USd, u would get a better idea, and just translate it to tt per year, according to the exchange rate, which is unpredictable at this time.

i pay $8 for a small coke today

inflation is not even d word to use ... with this government

[K74T]

You stupid to pay $8 in the first place

[10-01]

You stupid to pay $8 in the first place

yea i know but the glass coke taste better than the plastic ...

[Ted_v2]

Fork That. I paying 65$ for a case of 2L coke

[pugboy]

What's the saying about a fool and his money...

You stupid to pay $8 in the first place

[adnj]

comfortable spending, is about 8k to 12k per month, go with the 12k. per annum that would be 144k. then for a decade, 1.44 mil.
so for 4 decades 5.74 mil. but how pnm are causing the economy to contract unnecessarily, the inflation will be a lot higher as time goes on. so 12k tt isnt going to cut it. if u work out the figures in USd, u would get a better idea, and just translate it to tt per year, according to the exchange rate, which is unpredictable at this time.

You also have to take into account the rate of inflation and how much interest that you get on the money you have saved. Assuming an average inflation rate of 6% and an average rate of return on savings of 3%:

In 40 years you will be spending about $TT123, 440 per month because of inflation.

If you were to retire today and be able to spend the equivalent of TT$12,000 per month for 40 years, you need about TT$11,273,000 in the bank.

If you earn 10% interest (the average for stock market earnings) and inflation is 3.2% (the average for developed economies) you now only need to have TT$2,026,000 saved and you'll be spending $42,300 per month at 40 years.

[sMASH]

in other words, u need to have a business, where the selling prices can be adjusted to negate inflation.
bread goes up by 50% u raise ur prices by 50%... purchasing power maintained!

[redmanjp]

comfortable spending, is about 8k to 12k per month, go with the 12k. per annum that would be 144k. then for a decade, 1.44 mil.
so for 4 decades 5.74 mil. but how pnm are causing the economy to contract unnecessarily, the inflation will be a lot higher as time goes on. so 12k tt isnt going to cut it. if u work out the figures in USd, u would get a better idea, and just translate it to tt per year, according to the exchange rate, which is unpredictable at this time.

You also have to take into account the rate of inflation and how much interest that you get on the money you have saved. Assuming an average inflation rate of 6% and an average rate of return on savings of 3%:

In 40 years you will be spending about $TT123, 440 per month because of inflation.

If you were to retire today and be able to spend the equivalent of TT$12,000 per month for 40 years, you need about TT$11,273,000 in the bank.

If you earn 10% interest (the average for stock market earnings) and inflation is 3.2% (the average for developed economies) you now only need to have TT$2,026,000 saved and you'll be spending $42,300 per month at 40 years.

so which stocks earning a 10% interest now?

[10-01]

Fork That. I paying 65$ for a case of 2L coke

it taste different the bottle coke has a more crisp taste

[adnj]

so which stocks earning a 10% interest now?

Investopedia

New York, NY

http://www.investopedia.com

85% of people found this answer helpful

According to historical records, the average annual return for the S&P 500 since its inception in 1928 through 2014 is approximately 10%. However, that number can be very misleading. If an investor thinks that translates to just putting money in the S&P 500 Index and watching it double about every 10 years, he is likely in for a rather big disappointment. Accurate calculations of average returns, taking all significant factors into account, can be challenging.

The S&P 500 is a collection of 500 stocks intended to reflect the overall return characteristics of the stock market as a whole. The stocks that make up the S&P 500 are selected by market capitalization, liquidity and industry. Companies to be included in the S&P are selected by the S&P 500 Index Committee, which consists of a group of analysts employed by Standard & Poor's.

The index primarily mirrors the overall performance of large-cap stocks. The S&P 500 is considered by analysts to be a leading economic indicator for both the stock market and the U.S. economy. The 30 stocks that make up the Dow Jones Industrial Average were previously considered the primary benchmark indicator for U.S. equities, but the S&P 500, a much larger and more diverse group of stocks, has supplanted it in that role over time.

It's difficult for most individual investors to actually be invested in the S&P 500 since that would involve buying 500 stocks. However, investors can easily mirror the index's performance by investing in an S&P 500 Index mutual fund or exchange-traded fund.

One of the major problems for an investor looking at that 10% average return figure and mistakenly expecting to realize a nice yearly profit from investing in the S&P 500 is inflation. Adjusted for inflation, the historical average annual return is only around 7%. There is an additional problem posed by the question of whether that inflation-adjusted average is accurate since the adjustment is done using the inflation figures from the Consumer Price Index (CPI), whose numbers many analysts believe vastly understate the true inflation rate.

For an individual's investment success, when he chooses to enter the market makes a significant difference. The stock market performed very well for an investor who bought stocks between 1950 and 1965, but the market was nothing but a continuous 15-year disappointment for an investor who entered in 1965. The market's best sustained performance was from 1983 to 2000.

A significant detail about the historical S&P returns is that nearly half, over 40%, of the gains made over the years come from dividends. Calculating in the effect of an investor reinvesting all dividends received would render the historical performance figure substantially higher.

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[Redman]

You need productive assets that generate growth and income in order to fund your chosen lifestyle.

I would use between 5+7% as a real return on the stock markets...prudence would be closer to 5

The road forward might be tough.

[assassin]

10% Return is real ambitious

[The_Honourable]

Anybody knows what percentage the dollar devalues every year? Or show a comparison of $100 today purchases X amount of items compared to a decade or two ago?

[Redman]

use the average inflation rate. for the past 20 years...then project it forward..

i would increase it by 20% to be safe.

[RedVEVO]

You need 8 times your yearly salary.

[Mark!]

Fork That. I paying 65$ for a case of 2L coke

why ollur even drinking coke to begin with

[adnj]

Anybody knows what percentage the dollar devalues every year? Or show a comparison of $100 today purchases X amount of items compared to a decade or two ago?

tradingeconomics.com:

The inflation rate in Trinidad and Tobago was recorded at 3.60 percent in January of 2017. Inflation Rate in Trinidad and Tobago averaged 7.37 percent from 1957 until 2017, reaching an all time high of 24.52 percent in May of 1974 and a record low of -2.61 percent in July of 1961.

The current inflation rate is trending at 4%.

$100 with average inflation rate of 7.37% has the same purchasing power as $203.62 10 years later.
$100 with average inflation rate of 7.37% has the same purchasing power as $414.63 20 years later.

[toyolink]

Retirement is a capitalistic myth.
The perception that retirement is an era in one's life when no work necessary and is only easy street is definitely not a norm.
The cost of medical, food, utilities, clothes and all other expenses just keep rolling in and moving up-ward.
The trick really is having a means to generate cash flow on an going basis possibly via some commercial venture where your acquired knowledge, experience and skills may be applied (with an investment from savings).
What could make matters real difficult are outstanding loans which mature well into your retirement period and or bright children who came late in life and need to be supported.
........Really your retirement plan needs to be forged in your 30's.

[Monkey Man]

once i have enough money to bring in and mind a orangutan into the country

[zoom rader]

once i have enough money to bring in and mind a orangutan into the country

Yuh cah say dat bro
I once got band for quoting "monkeys want to rule my country "

[Miktay]

Retirement is a capitalistic myth.
The perception that retirement is an era in one's life when no work necessary and is only easy street is definitely not a norm.
The cost of medical, food, utilities, clothes and all other expenses just keep rolling in and moving up-ward.
The trick really is having a means to generate cash flow on an going basis possibly via some commercial venture where your acquired knowledge, experience and skills may be applied (with an investment from savings).
What could make matters real difficult are outstanding loans which mature well into your retirement period and or bright children who came late in life and need to be supported.
........Really your retirement plan needs to be forged in your 30's.

Retirement iz also a socialist myth.

All the actuarial projections are based on hypothetical portfolio returns that may or may not materialize.

[adnj]

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What Retirement Will Look Like Without Savings

By Donna Fuscaldo | Updated January 4, 2017 — 6:00 AM EST

 
By many estimates you are going to need at least 70% of your income in retirement. But in this instant gratification society where keeping up with the Jones’s is more important than saving money for the golden years, having a nest egg at all is considered a big achievement. According to a recent Wells Fargo (WFC) survey people aged 60 and older have a median savings of only $50,000. Furthermore, Bankrate found a couple years ago that more than one-third of working-age adults don’t have any money saved for retirement at all. In this debt driven society the thought of retiring penniless may not keep you up at night, but not having any money to support you when you stop working should. (For related reading, see: What’s The Minimum I Need To Retire?)

Social Security Will Be Your Main Income

Retirement means the end of a steady income which is why having a nest egg is so important. Let’s say you’re annual income was $100,000 when you were working. That means you’ll need around $70,000 a year when you are out of the workforce in order to maintain your lifestyle. Without savings you are going to either have to earn that money or rely on Social Security.

For many people who enter retirement without any saved cash their only source of income ends up being Social Security. And with the average Social Security check standing at $1,335, it can be a big shock for seniors who were used to bringing in much more. Getting by is going to be a stretch when Social Security is your only source of income. Throw any healthcare costs, a mortgage, debt and other expenses in the mix and Social Security isn’t going to be enough. (For more, see also: Top Tips For Maximizing Social Security.)

You’ll Have to Downsize Your Lifestyle

Even if you were doing well in your working years, if you didn’t stow away any money you are going to have to downsize your lifestyle in order to get by in retirement. That will mean possibly moving into a smaller home or apartment, forgoing extras like cable, the iPhone and the gym membership, and even swapping the pricey car for a less costly one. It could even mean moving in with your adult children which is the case for many seniors. After all, even if you make a nice profit on the sale of your house, your retirement can easily last more than 20 years and there is a distinct possibility you will outlive the proceeds of the sale of your house and other assets you sell off. (For more, see: Avoid the Downsides of Downsizing in Retirement.)

Working Part-Time Won’t Be a Choice

In order to maintain your lifestyle in retirement you may need an extra income stream. This often means you’ll either have to go back to work or get a part-time job. That isn’t bad in and of itself, but when you need money you can’t be choosy about what job you accept which can get old very quick. The surge in the global workforce thanks to the Internet makes it easier for seniors to work remotely. Retailers are also more than willing to hire retirees because they tend to be reliable and loyal. But if your health fails and a part-time job isn’t doable, without a savings you are going to face real financial hardship. (For more, see: The Best Jobs for Retirees.)

Taking on a Roommate Will Be a Must

With the likelihood of Social Security not being enough, seniors who don’t save for retirement are going to have to generate income and often turn to their house as a result. For some that means taking on a roommate, which can be fraught with risks. Being a landlord is fine if you don’t mind sharing space, but if you are the type of retiree who values peace and quiet and doesn’t like to share, renting a room may be a bitter pill to swallow. For others it means a reverse mortgage. That too can be a costly and risky choice.

Retirement Won’t Even Be on the Table

If you don’t put any money away for retirement and you aren’t willing to sacrifice and overhaul your lifestyle, then retirement won’t be an option at all. Particularly if Social Security isn’t enough to live off of. Many people forego retirement and work for as long as possible, largely because they don’t have enough saved. But working longer will take a toll on your health and psyche and really isn’t the ideal option.

The Bottom Line

Workers of all ages have long heard about the need to save for retirement and the importance of saving enough. Yet far too often people shrug off the advice and don’t put even a penny into a retirement savings account. They do that at their own peril. Without money saved for a retirement that could easily last 20 or more years, retirees are going to be forced to downsize their home and lifestyle, take on a roommate, get a part-time job or even forgo retirement altogether.



Read more: What Retirement Will Look Like Without Savings | Investopedia http://www.investopedia.com/articles/personal-finance/111815/what-retirement-will-look-without-savings.asp#ixzz4fSo8uLSp 
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[Redman]

Retirement is a capitalistic myth.
The perception that retirement is an era in one's life when no work necessary and is only easy street is definitely not a norm.
The cost of medical, food, utilities, clothes and all other expenses just keep rolling in and moving up-ward.
The trick really is having a means to generate cash flow on an going basis possibly via some commercial venture where your acquired knowledge, experience and skills may be applied (with an investment from savings).
What could make matters real difficult are outstanding loans which mature well into your retirement period and or bright children who came late in life and need to be supported.
........Really your retirement plan needs to be forged in your 30's.

Retirement iz also a socialist myth.

All the actuarial projections are based on hypothetical portfolio returns that may or may not materialize.

Finish yuh statement there boss.

Social Security NIB and MANY MEDICAL plans are under funded.
Whats the experience with retirees and their plans-My old man is ex Trinmar...and the pension and medical plans have been cut consistently and now they are finding leakages in the Med Plan-

We Know Social Security is busted and is the Medicare plans.

Dont depend on these long term pension/annuity plans-they tend to be wrong.

[adnj]

So the question comes back to how much you need to save. In fact, are you saving anything at all?

[The_Honourable]

Anybody knows what percentage the dollar devalues every year? Or show a comparison of $100 today purchases X amount of items compared to a decade or two ago?

tradingeconomics.com:

The inflation rate in Trinidad and Tobago was recorded at 3.60 percent in January of 2017. Inflation Rate in Trinidad and Tobago averaged 7.37 percent from 1957 until 2017, reaching an all time high of 24.52 percent in May of 1974 and a record low of -2.61 percent in July of 1961.

The current inflation rate is trending at 4%.

$100 with average inflation rate of 7.37% has the same purchasing power as $203.62 10 years later.
$100 with average inflation rate of 7.37% has the same purchasing power as $414.63 20 years later.

Thank you adnj!

[Miktay]

Retirement is a capitalistic myth.
The perception that retirement is an era in one's life when no work necessary and is only easy street is definitely not a norm.
The cost of medical, food, utilities, clothes and all other expenses just keep rolling in and moving up-ward.
The trick really is having a means to generate cash flow on an going basis possibly via some commercial venture where your acquired knowledge, experience and skills may be applied (with an investment from savings).
What could make matters real difficult are outstanding loans which mature well into your retirement period and or bright children who came late in life and need to be supported.
........Really your retirement plan needs to be forged in your 30's.

Retirement iz also a socialist myth.

All the actuarial projections are based on hypothetical portfolio returns that may or may not materialize.

Finish yuh statement there boss.

Social Security NIB and MANY MEDICAL plans are under funded.
Whats the experience with retirees and their plans-My old man is ex Trinmar...and the pension and medical plans have been cut consistently and now they are finding leakages in the Med Plan-

We Know Social Security is busted and is the Medicare plans.

Dont depend on these long term pension/annuity plans-they tend to be wrong.

I didnt want to go down that path just yet cuz it iz depressing for many ole timers who are going to be depending on this source of income in their twilight years.

But you are 100% correct. As the population ages the demographics will become onerous. There will be less producers and more consumers. There will be more retired older people to be supported by a smaller cohort of younger people. Do you think that these young people will willingly pay higher taxes to support an aging population?

Private pensions and national insurance schemes were always a series of Ponzi schemes. It part and parcel of the Welfare State that started with Bismark in Germany in the late 1800s. People are going to find out that implicit Big Gubbament guarantees are not worth anything more than ole talk.

The trouble with Socialism...and Crony Capitalism....iz that you eventually run out of other people's money.

[Redman]

Honourable,

Just be aware that the professional prognosticators are off half the time.
As you go beyond a year it becomes more of a guess.

Any long term plan needs to be constantly updated since as we see now-the ACTUARIAL predictions of the institutional money managers-IE the pension funds etc have been pretty far off base.

Whether as advisor or client you should review these plans at least every year.
And justify the continuation.