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How to have a happy retirement?

Updated: Feb 4, 2023

Young woman works from home

In order to have a happy retirement, you need to save as much money as possible. There is a rough way to estimate how much you should save at least.

First, you deduct your age from 100, which is how long you would usually expect to live. Most people are retiring at least at 60 years old, so the max number would be 40. Then you times 80% of your current annual income (assume your current annual income is $50,000, so the number would be $40,000) with 40, and the result is $1,600,000.

That looks like a lot of money. However, there is the company pension, government pension, and other income support programs, that can help your retirement. Assume you can get $20,000 from those pensions and programs each year, then you only need $800,000 to have a happy retirement, which is not too difficult for most people.

If you have a house, you can even downsize your home and need less money for your retirement; or you can just move to other places with lower costs of living.

In order to have a happy retirement, you would best to pay off all your debts before you retire; you need to have the right insurances (medical, dental, etc.) in place in case of accident; you need to have a relatively safe and stable investment portfolio that have a return higher than inflation; you also need to have a budget during your retirement to control your expenses.

If you are expected to have much more money than the minimum requirements, you may hire a professional to have estate planning and take into account of other tax considerations. If you can do all the things right, congratulations that you will have a very happy retirement.

Check ChatGPT's answer for more information.

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