Saving for retirement is a personalized decision heavily influenced by your individual spending needs. While $4 million might seem sufficient, it can vary based on withdrawal rates and living costs. A safe withdrawal rate of around 3.7% implies that this amount could generate about $148,000 annually. However, understanding asset allocation, including maintaining liquid cash to avoid losses during downturns, is crucial for financial security in later years. Tools to assess retirement readiness can help clarify whether one is on track with their savings.
For many, $4 million will be enough, but you need to consider your spending needs.
Figuring out how much money you must have saved before you retire can be more difficult than you'd think.
If you follow a safe 3.7% withdrawal rate, a $4 million nest egg would give you $148,000 per year to spend.
You'll want to confirm that you are following a safe withdrawal rate so you don't drain your accounts and end up broke.
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