You are trying to decide if you have enough money to retire. You are expecting $2,500 a month from Social Security. You have $1.2 million in your retirement savings, and you only want to use the earnings to live on, which is at 3.5% annual rate. You are currently making $64,000 a year and plan to live on 80% of that amount. Do you have enough to retire based on these numbers?

Question

You are trying to decide if you have enough money to retire. You are expecting $2,500 a month from Social Security. You have $1.2 million in your retirement savings, and you only want to use the earnings to live on, which is at 3.5% annual rate. You are currently making $64,000 a year and plan to live on 80% of that amount. Do you have enough to retire based on these numbers?

Answer 1

64,000 * 0.8 = $51,200

1,200,000 * 0.035 = $42,000
2,500 * 12 = $30,000
42,000 + 30,000 = $30,042 yearly to live on, thus stopping short of your goal of $51,200.

Answer 2

Neil, when I went to school, 42,000 + 30,000 used to come out as 72,000

So yes, he can live comfortably without even touching his 1.2 million retirement fund.

Answer 3

My mistake. I didn't have access to a computer at the time, was doing all this from my phone.

Answer 4

To determine if you have enough money to retire based on the given numbers, we need to calculate your expected retirement income.

First, let's calculate your expected income from Social Security. Given that you expect to receive $2,500 per month, we can multiply that by 12 to get the yearly amount:

$2,500/month * 12 months = $30,000/year from Social Security.

Next, let's determine your expected income from your retirement savings. Since you have $1.2 million in savings, you need to calculate the annual earnings from this amount, assuming a 3.5% annual rate. To do this, we multiply the savings by the interest rate:

$1.2 million * 0.035 = $42,000/year from retirement savings.

Now, let's calculate your intended retirement income based on your current salary. Since you plan to live on 80% of your current salary, we can calculate that amount:

$64,000 * 0.8 = $51,200/year intended retirement income.

Finally, let's add up your expected income from Social Security and retirement savings:

$30,000/year from Social Security + $42,000/year from retirement savings = $72,000/year total expected retirement income.

Comparing this to your intended retirement income of $51,200/year, we can see that you have more than enough to retire comfortably based on these numbers. You have a total expected retirement income of $72,000 per year, which is higher than your intended retirement income of $51,200 per year.