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Money: 3 Simple Ways to Boost Your Retirement Budget
How you can safely spend more in retirement with the same nest egg
Saving for retirement is hard.
Just ask people who are approaching retirement age.
According to DQYDJ.com, the median net worth of Americans ages 60 to 64 is under $164k, enough to supplement your Social Security benefits with an underwhelming $480 a month.
That figure is per William Bengen’s “4 percent rule,” which is based on research he published in 1994 using market data from 1926 and beyond.
He found that you won’t run out of money for at least 30 years if you only withdraw 4 percent of your portfolio’s value in your first year of retirement and then adjust that amount for inflation annually.
How much do you need to save for retirement?
Suppose you want to retire with the median US income of $50k and receive the average Social Security benefits for couples of about $35k. In that case, you’d need another $15k from other sources.
If that other source is your portfolio, the 4 percent rule says you’d need to have saved over $375k, which fewer than four in 10 Americans in their early 60s achieve.
