Build the big sum you'll need
CNN Money Magazine, March 13th, 2007
To step off the corporate treadmill in your fifties or early sixties
and maintain anything close to your standard of living, you must have a
seriously big retirement kitty.
How serious? You'll likely need
assets worth 10 to 16 times your salary by the time you leave your job.
A 45-year-old making $120,000 who hopes to retire at age 60, say,
should already have nearly $700,000 set aside.
You can get by with less if you'll have other sources of income. If
that same 45-year-old has a typical old-fashioned check-a-month
pension, for example, he might need only $432,000 in savings to be on
track. If you expect to hold down a scaled-back job for your first
decade of retirement, you can also get by with less.
Still,
your target is a big number, and to reach it you'll have to save
diligently, invest aggressively and keep taxes and expenses from
eroding your returns.
One way to get there is through the kind
of prodigious deferred consumption that Shawn Larsen, 47, practices.
After spending nearly 16 years as a seismologist at Lawrence Livermore
National Laboratory, Larsen, who is single, has decided he wants to
call it quits when he hits 50 and becomes eligible for retiree health
benefits. That will leave him free to focus on the outdoor activities
he loves: biking, backpacking and orienteering (a sort of combination
of running, rock climbing and map reading).
Read more of this article.