That is a hard question to answer and the problem faced is that it is a different amount for everyone. I feel that I need close to what I earn now per year. My husband feels he needs less as we will live more simply, not need to travel for work and will relax more. What makes it more difficult, is that we don’t know what things will cost in 30 years.
I feel that most people underestimate their requirements. We live longer, the pensions are getting less and one day will be gone. Most of us make a poor job of planning for the future. I don’t want to return to work at 75 because I will have already spent my retirement funds.
People of my mother’s or grandmother’s generation had a pension and there was nothing to think about. While this has already been mentioned; it does mean that we perhaps should not be taking advise from someone who did no planning for their retirement and how to invest to get there.
I have been advised that I will need 70% – 100% of my current (pre-retirement) income to live how I currently do. That is a seemingly impossible number to me. We must also consider that our employee contribution will never be enough to live on.
We have a specialist who helps with investing but we do handle part of this on a daily basis for ourselves and my clients as I am involved in property management. I have many clients who intend to fund or part fund their retirement on property. One of my clients currently owns a number of properties and lives off of the income. She has a plan in place to sell them when the market is fabulous, however there is absolutely no rush. She has maintained the properties so most maintenance is minor and she is a seasoned investor, so she plans for ongoing costs.
Please don’t think that property investing is without risk. A lot of investors prefer property as there is something physical. I totally understand their point of view but what if the market goes down and you need to sell?
Like my client above, I believe that we need to be planning well ahead, ensure we know our properties and the market and that we know when to sell. Be involved in your property and think of it as a commercial enterprise, not something that is personal.
Always use the knowledge of specialists and cross-reference information, don’t trust one source. The planning can be fun so make the most of it!