Some time ago, I wrote about how the 4% rule applied to a dividend portfolio and that generated quite a few reactions. Many of them regarded how much was truly needed to retire, especially since I had used a $1 million retirement starting plan. I personally hope and expect to retire with more but never did I even consider that you’d need $1 million to retire. That would be wrong on so many levels.

Your Own Number

ING made a splash when it started advertising that we all should know and work towards saving “our number”. As I discussed, I do understand that there are several unknowns, especially considering numbers like inflation. Even a rather small change in that number can have massive consequences, especially on those who have retired. That being said, I believe in planning, with the best available estimates. Then, over time we can adjust that number. It’s still better to have a number and adjust it over time than not having anything.

Where To Start

Before even starting, one thing I’d say is that there are a million different ways to do this. I will not give my exact numbers but will give some estimate here:) It’s important to remember that a few changes can make a massive difference, those can include moving to a new location which I discussed earlier this month.

Salary for my wife and I: $120,000
After taxes salary: $80,000

I think the main number to look at here when trying to determine at how much I will need. The first number I’m looking for is how much I currently have every year to spend. That number is my before tax numbers. I will then take out the following expenses:

-annual savings $15,000
-mortgage (should be paid by then): $30,000
-work related expenses (work clothes, transport, etc): $5,000

So that gives me a total of $30,000 that I need to generate before taxes assuming that everything else remains the same.

It’s important to consider that my tax rate will be significantly lower considering the lower income and some of it coming from capital gains. So I could likely be ok with $50,000 or so?

There will likely be more changes:

-govt or other pension: I prefer not to count on this at all as I think that most governments will have to break many promises if they want to avoid going completely broke
-travel: I am likely to travel more once I retire, so ideally I’d have something extra saved for such expenses
-sure I might have to move to a place with a rent at some point but the extra income from selling the house should be enough to compensate

So what would be my number?

I’m sure a lot of other changes that I cannot even consider now will occur. That is why my number will change every time I recalculate but that is more than fine.

What about you? What is your number?

Man oh man, no matter how involved or not involved the White House is in all of this… it really looks bad. After Bengazi, the IRS and the spying on AP, now we seem to learn that the NSA is working with tech companies and phone carriers to spy on all citizens? Is the government out of control? Here are some readings that you will hopefully find interesting:)

General Readings

-Should we trust economists? @ TheAtlantic
-Is the NSA spying on all of us? @ WashingtonPost

Passive Income/Dividend Readings

-Top Canadian dividend stocks @ TheDividendGuyBlog
-Coca-Cola (KO) dividend stock analysis @ Dividend-Growth-Stocks
-Pepsi (PEP) to buy Sodastream? @ Reuters

Tech Stock Readings

-The power of Amazon (AMZN).. fascinating @ TechCrunch
-Zynga (ZNGA) announces major layoffs @ TechCrunch
-Wall Street Hates Facebook (FB) @ Wired
-Apple (AAPL) getting ready for iRadio? @ Bloomberg