How Much Do You Need To Retire?

If someone were to ask you how much money do you need in order to retire, what would be your number? Financial Freedom or Retirement has always been my goal ever since I started this blog. I wanted to be financially free by 40. I continue to read personal finance blogs and books to bring me closer to my GOAL.

Retirement

Although I already set a due date for my goal, I haven't established an exact amount for my goal. My initial RETIREMENT value was established out of thin air. The first amount I established was ridiculously high. It was almost impossible for me to formulate a plan to achieve this goal. In order to establish a realistic retirement amount I did some research and eventually found a way to make a realistic retirement amount.


In order for my goal to be as realistic as possible, I needed to take into account factors that will affect my Retirement Goal. The factors I used for establishing my Retirement Goal are as follows:
  • Duration of accumulating Wealth for retirement
  • Projected Monthly Expenses
  • Current Investments
  • Average Inflation Rate
  • Expected Average Annual Returns
After establishing these factors I was surprised by the huge difference between my Initial Unrealistic Value and The Calculated Realistic Values. My computed Retirement Value was less than half my initial guesstimate. I then used this Retirement Value in planning my investments to reach my retirement goal.

RETIREMENT CALCULATOR


*Normal inflation rate is between 3-4%. 
*Average Philippine Inflation Rate from 2003-2013 years is 4.94%. 
*Average Annual growth of Philippine Stock Exchange Index from 1986-2014 is 15%.