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How Much Do You Need to Retire?
If you've been contributing to your 401(k) you may think you have all that you need, but unfortunately, most people just aren't ready when retirement comes. We're not just talking about crunching the numbers for healthcare and travel here. How much do you think it will cost you to eat? You laugh, but let's take a look.
These numbers assume you're one half of a couple (if you're single, you can feast like a king on this budget!) Most people like three meals a day, but even if you don't, indulge us this average. We're guessing that you'd also like to eat every day, and let's assume that the average meal costs about $8. Some meals will cost less, some more so it's best to take a general average. This average is whether you eat out or cook at home - but if you eat out EVERY meal—especially in LA or Manhattan—we suggest you increase the average. Now let's say that you plan on being alive to enjoy retirement for at least 20 years and that gives us the rest of our equation.
2 people x 3 meals each x 7 days a week x 365 days a year x 20 years = $306,600
Remember, that's just to eat! You also have to consider medical costs, living expenses, and housing expenses—all of which increase every year with inflation. Take a look at your 401(k) balances and see how much you have. It may be time to consider other options!
Are you on track to retire fat and happy?