Retire Early – Tips on Budgeting Part Two
Retire Early - Tips on Budgeting
In my last post I discussed how much money you will need to save in order to have a great retirement. By the chart below, you will see that you will need around $40,000 per year or about $800,000 to live very comfortably for twenty years. It allows space for entertainment, travel, and all of the normal things you expect in your life right now. Read on to learn more tips on budgeting and ways of how to manage money so you can expedite your retirement date. Keep in mind these numbers factor in the average couple.
Monthly Break Down:
Utilities/Home Taxes………….. $800
Groceries……………………….. $500
Car Insurance………………….. $125
Home Insurance……………….. $ 75
T.V/Phone/Internet……………. $150
MISC…………………………… $750
Travel………………………….. $400
Car…………………………….. $200
MONTHLY TOTAL…………. $3000
YEARLY TOTAL…………. $36,000***
***I rounded everything to $40,000 per year
How Is It Possible To Save $800,000?
Let’s assume that the average rate of return is around 10% on your retirement contributions. Here is a quick chart of how much you would need to save each month so you and your spouse can retire with $800,000 by the age of 60.
If you start to contribute at age:
20 you need to contribute $125 per month
30 you need to contribute $350 per month
40 you need to contribute $1044 per month
45 you need to contribute $1915 per month
What if you want to retire earlier? Say age 55!
If you start to contribute at age:
20 you need to contribute $209 per month
30 you need to contribute $598 per month
40 you need to contribute $1915 per month
These numbers really aren’t that difficult to attain. If you have two steady incomes, the contributions you have to make would hardly put a dent into your current lifestyle. If you are married at age 30 tucking away $10 a day is easily worth it for your future.
I’ll say it again! You and your spouse only need to contribute $10 a day each to have the $800,000 necessary to retire comfortably! Isn’t that one of the easiest tips on budgeting you could follow?
There are many ways to make your retirement dreams possible! Obviously the earlier you start the more likely you are to achieve those goals. In fact the longer you wait the more difficult it will be to be totally comfortable after age 60. Start now and be free later. Please check out more of my blog for more how to manage money tips. If you sign up you will also receive the free E-Book, free budget spreadsheet, free calculators, various tips on budgeting and links to all sorts of tools. We also have a few leaked videos that help with your finances.
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Filed under: Budgeting Tips
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Very Good Post! Tks!!!
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Great post, very informative. I think a lot of people will find this very useful.Keep post in coming future as well!!!
Is there other agency offer the same benefits? That is a good point that we really need to start early, this will be another way on reminding people to think about their future especially after 60 and up.
Your info is realistic, and valid – especially for women. I have been able to retire very young in order to pursue much loved interests and open the business I have always wanted to have. Many women I help are unfortunately depending on a husband or a mysterious future event to carry them through the 2nd half of life. I often refer people to the story of Rachel Veitch, who at 89 is doing exactly what she loves – driving her 1964 car all over the US. This type of freedom comes with wise focus, speaking and acting in the direction of one’s desires and decisions, and yes – a realistic positive attitude.
You are so right, there is no reason why people can’t save up money. I am only 22 right now and I have been putting away over $400 every month. I don’t just want 800,000 when I retire, I want more.
Wow. It seems that you have it all figured out huh? Saving is never easy. People have different tendencies but all in all, you give sound advice.
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It is so important for people to be ready for their retirement. As I said, I find it so sad that seniors HAVE to work during their retirement to get by as opposed to working to stay busy.
Thanks for the insightful comment. It’s amazing how just one person is able to inspire so many people. It’s too bad that more people don’t make a better effort towards making their retirement happen ahead of schedule.
It’s amazing how much compound interest can make a difference!
It’s wild that if you start at 20 you only need to save $125 a month, but if you start at 30 you need $350 a month.
Hopefully some people in their 20s understand this and start saving early.
Ahhh, the miracle of compound interest! If only more people had a basic understanding of this then they’d be sorted for retirement!
It’s even easier in the UK too – savers can put away £5,100 in cash, and £5,100 in stocks & shares without paying any tax. So if you’re saving your £7 a day ($10) then use your yearly ISA allowance to maximise your returns!