Retiring at 50 is a great goal, but it’s important to have a plan in place to make sure that you have enough money to last until you can access your retirement account. One way to do this is by calculating your “bridge account” number, which is the amount of money you need to have saved in order to cover your expenses until you can access your retirement account.
To calculate your bridge account number, you need to consider a number of factors, including your cost of living at age 50, your expenses, and other sources of income like pensions and Social Security. Inflation and rates of return are also important variables to consider when calculating your bridge account number.
The good news is that there are tools available to help you isolate all of these variables and run multiple scenarios. Our “Know Your Number” course, available at learn.moneyguy.com, can help you figure out what your bridge account number should be and how much you need to be saving in order to reach that number. The course allows you to adjust the retirement age, inflation rate, and rate of return, so you can see how each variable affects your bridge account number.
It’s important to remember that a bridge account number is just one part of a financial plan for retirement. It’s also important to focus on increasing your income or decreasing your expenses in order to save more money for the future. Our “Know Your Number” course can give you a horizon line to shoot for, but it’s not meant to replace a comprehensive financial plan.
When you’re young and early in your career, it’s important to focus on your savings rate and the decisions you make about your financial life. If you want to retire at 50, it’s important to have the skills and resources to make that happen. Remember, you might change your mind about your retirement age, but the skills and resources you acquire while saving for retirement will still serve you well in the future.
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