That was the number I had initially come up with for myself last fall when my husband decided to retire at the end of 2014. The initial plan was for me to join him in retirement when our total liquid assets reached 1 million. I added the $200,000 to cover taxes on our 401(k) distributions after hearing horror stories from a couple that didn’t plan for taxes on their 401(k) money.
The 60-year old has been asking this question to everyone he knows. Most answers fall between $1 and $2 million. For himself, he thinks he and his wife need between $3 and $4 million. His plan is to retire at 63. He recently bought a condo in Florida on a golf course where he will spend the winters. He will sell his home in Wisconsin and buy a condo here where he will live in the summers. His only hobby is golf. He can play for free at his Florida condo. His company offers retiree health care and he will receive a pension.
$3 to $4 million! If that is what a couple needs to retire comfortably I will never be able to retire.
Which is why I am changing my goal from retiring early to financial independence. In addition to saving for retirement, I am going to spend the next 5-6 years building an alternative income stream to supplement our retirement funds.
In other news, I had to let my temp go last week for underperformance and am starting over on Monday with a new employee. My boss told me not to count on having much of a summer…
Financial independence is looking very attractive right now. What steps are you doing to create financial independence?
Also, how much money do you think the average couple needs to retire?