in Florida, Can You Retire at 55 Years Old With Just $2 Million?

As people grow older, they often want to know exactly how much money they need to retire and when they can stop working. However, it’s very hard to put an exact number on this — or an exact age — because no two people are in exactly the same situation.

What matters is the manner in which you want to live, the lifestyle you choose to lead and how long you expect it to last.

For example, some studies have shown that you can make your retirement fund last for 30 years if you are disciplined enough to never take out more than 4 percent of it every year. Obviously, it also depends on what type of fund you have, how your investments are doing and how the economy does. However, this is a good baseline to use.

So, would you be able to retire if you were 55 years old and you had $2 million saved up? The first thing to look at is age. Over a 30-year period, starting at 55, you would be assuming that you would live until 85.

The next thing to consider is the money. If you took 4 percent out of your $2 million fund, you’d have $80,000. That’s the full value of what you’d get each year, without any other income. If your lifestyle means that you need far more than that, $2 million is not enough. If you can live in a way in which an annual salary of $80,000 is plenty, though, you’d have enough to retire.

When it comes to retirement, don’t forget to factor in long term care planning, as those costs may have to come out of your total withdrawals.

Source: today.com, “Is $2 million enough to retire at 55?” Dec. 30, 2014