Retirement Saving – How Much Is Enough?

Ewpple Income For Life | http://www.ewpple.com
Objective | To ensure that your savings can last till the end of your retirement period.
In our previous post, we discussed the topic of making your money work harder.
The next step is to determine how much is sufficient. That is, how much for,
A) Monthly amount to save up from the current month to retirement.
Or B) Lump sum to have at the start of retirement.

Objective | To ensure that your savings can last till the end of your retirement period.
In our previous post, we discussed the topic of making your money work harder.
The next step is to determine how much is sufficient. That is, how much for,
A) Monthly amount to save up from the current month to retirement.
Or B) Lump sum to have at the start of retirement.
To calculate the above, we need to gather the below information from personal or official public data.
Starting Age | The age you start your saving plan.
Retirement Age | Your target retirement age. We set default as 65 years old.
Expectancy Age + 5 | Life expectancy age based on your gender, country, etc + 5 years. Default is age 85 + 5.
Investment Return | The investment return of your retirement fund. Default is Ewpple sample portfolio return of 7 – 9% minus 1% for charges etc.
Inflation Rate | Projected inflation for the entire period. The default is 2.5%.
Saving /Month | This is the amount you should save monthly to achieve the objective.
Total Saving (From Age 30 - 64) | The total amount you should save.
Total Period (Months) | The total number of months you should save.
Withdrawal /Month (Current $) | The amount for your retirement monthly expenses. Default is US$1,000 at current dollar value.
Withdrawal /Month (Age 65 1st month) | The withdrawal amount adjusted by inflation to the start of the retirement period.
Withdrawal /Month (Age 90 12th month) | The withdrawal amount adjusted by inflation to the end of the retirement period.
Total Withdrawal (From Age 65 - 90) | The total amount you can withdraw.
Total Withdrawal Period (Months) | The total number of months you can withdraw. The default is 312 months (26 years).
Final Balance @ Age 90 12th month | The amount left after the end of the withdrawal period.
Analysis
Let's compare the 30, 50 & 65 age group data. Please note that all age groups have the same US$1,000 inflation-adjusted purchasing power during the withdrawal period of 26 years.
The earlier you start the easier.
A 30 years old (yo) saves $345 monthly is more affordable vs 50 yo $1,025 vs 65 yo $205,258.
The earlier you start the cheaper.
The total amount saved for 30 yo is $144,900 vs 50 yo $185,500 vs 65 yo $205,258.
The earlier you start the more you gain.
The total amount a 30 yo can withdraw is $1,053,951 (727% gain) vs 50 yo $639,586 (347%) vs 65 yo $440,669 (215%).
The above is possible because the longer the saving period the more time your money can grow.
Better late than never
For those just retired (65 yo), even depositing a lump sum at the beginning of the retirement period, can still stand to gain 215% ($205,258 deposit vs $440,669 withdrawal).
For those 65 yo & beyond, this plan can still maximize your retirement dollar to last much longer. In fact, you can start at any age.
You will NOT make any money by merely reading this post. You need to take action.
Assignment
Question | Do you have enough to last till the end?
If you have no satisfactory answer to the above question, please feel free to contact me at ewppleblog@outlook.com.