How Much Money Do I Need to Retire? Book Review and Giveaway
I am a big fan of Todd Tresidder at Financial Mentor, so I was excited to review one of his 60 Minute Financial Solutions books. How Much Money Do I Need to Retire? helps you accurately analyze all of the conventional assumptions in retirement planning in order to understand why they can be extremely misleading. This helped me a lot. I’ve always known that the whole “8% annual return” number couldn’t be entirely accurate, but Todd shows exactly why it’s such a dangerous assumption (the short answer is that it’s never a neat 8% return and the volatility of negative returns one year followed by positive returns the next can be devestating on your portfolio.) Next, even small changes in inflation can have dramatic eroding effects on your retirement portfolio. So when searching for that Magic Retirement Number, it helps to realize that actually, there is no magic number. You should calculate for a range that you feel comfortable with, based on different spending, saving, inflation and investment return scenarios. The book is worth your time and I just want to leave you with Todd’s two critical numbers that will help you best plan your retirement:
- #1: Percentage of income saved versus income spent
- #2: Return on investment minus inflation
There is a ton of helpful information and ideas in this book, even if you think you are many years away from retirement (I know I am). I like the Ultimate Retirement Calculator that lets you play with a bunch of variables. I also like that it delves into business and real estate assets as part of a retirement portfolio, since I really don’t think of myself ever retiring, I always want to be active in business, knee-deep in projects, and an owner of rental properties.
Giveaway: I have a copy to giveaway and entry is really, really easy! Either follow me on Twitter or show me some like on Facebook and enter using the Rafflecopter below. You’ll get this awesome book mailed to you!
I have enough t-shirts to supply a small army. Can’t seem to get rid of them…I love them all!
Looks like a great read!
My current retirement plan is “get as much money in as possible.” Maybe I should create an actual plan…
i could really use this because i need to figure it out.
Good post. I have been wondering what good kindle pf books are out there. After reading your review I will be sure to check it out.
I have a plan for early retirement which is right now, but all the money is pulled together into assets generating income. No plans to fund a retirement account on the side so far.
We wrote a couple of articles about this very issue on TheMoneyPrinciple together with a calculator. The big question is whether you want to leave a bunch of money or just go out the way you came into the world – broke! But it is a fallacy to consider retirement anything other than just another phase of life. Retirees are still human beings after all!
I missed it! Ack! I like the 8% discussion…sometimes stuff that seems pretty tidy really isn’t, and it’s good to look behind the curtain at reality….
Looks like a great read! Did you get a new site design? I like it!
I did! Thanks! I love this design, it makes me want to live in my blog header…
I like that idea. As long as you are doing reasonably well with those two metrics, your finances should be ok. Yea, I’ve never felt too comfortable with 8% returns. What number would you use. I use 4% or 5% for my future financial models.