Retirement is a Number💰, not an Age!👴👵

Peace and Love family.

I’m going to briefly cover the concept of retirement; a word I don’t hear discussed in depth or often enough within young working people (18-35) these days.

One of my favorite online financial resources defines retirement as such:

“Retirement is when a person chooses to leave the workforce. The concept of full retirement – being able to permanently leave the workforce later in life – is relatively new, and for the most part only culturally widespread in first-world countries. Many developed countries have some type of national pension or benefits system (i.e. the United States' Social Security system) to help supplement retirees' incomes.

I don’t know about you, but they had me at the first line of that definition!


I mean, leaving the workforce? Tell me how, when and where!

As the definition also goes on to state, retirement traditionally would consist of a workplace pension or the equivalent of social security.

Unfortunately, both of these are becoming less and less reliable if not completely extinct.

So this leaves us (Gen X, Millenials and Gen Z) with a critical question: How do we exit the workforce?

The answer of course, is in the numbers. I’m not referring to age, though - I’m referring to your net worth and/or the surplus you have sitting in a money market or brokerage account.

I have a simple formula and technique (outside of just using a retirement calculator) that allows most of us to figure out how and when we can flee the ever-changing workforce. This means when you’ll be living job and debt free while maintaining your current lifestyle.

The truth is that most of us will never become multi-millionaires or billionaires, so if your happiness and comfort depends on this status, then you’ve come to the wrong place.

For those of us rooted in reality and pragmatism, here is how you map out your retirement:

Step 1: Calculate your current net worth, paying close attention to current assets. I don’t think you need me to tell you that eliminating existing debt is critical to wealth building.


Step 2: Use your values, personal/family health history, to determine your desired retirement age. Subtract this age from the average life expectancy for your gender, race, etc. 

Step 3: calculate the amount of time you intend spend as a retiree. Multiply your current expenses by that number (in years).

**Keep in mind that my formula does not account for benefits like social security or pension; that’s because I’m extremely cynical when it comes to relying on governments or corporations for things like healthcare, education, government... you know, anything important!**

Step 4: This is for my investors. Assuming you are currently investing or have plans to start ASAP, use a compound interest calculator to figure out exactly how much you’d need to put aside each month (based on a conservative yield) in order to accumulate your individual retirement amount.

Now you are armed with a target retirement age, a target amount, and the amount you’d need to save or invest monthly to achieve your objective, all you need now is a plan!

Financial plans contain budgets and other cash flow allocations that make sure that you have all life events covered. I’ll cover financial plans another day, but the most critical element of financial plans for you now is a cash flow analysis or budget.

I enjoy doing those. A lot. I can do yours and you households’ budget if you sign up for my financial literacy coaching. A financial plan (including cash flow analysis) is included in individual or bundled service sessions!

Forward this to someone care about dearly (and wish to see wealthy). Thank me later.

https://us12.forward-to-friend.com/forward?u=1414893be5155f40abf79404d&id=535944075a&e=[UNIQID]

-Kwesi