Jun 30, 2007

How much does it take to retire rich? $5 million according to Fortune Magazine

Fortune Magazine's recent retirement issue writes that you will need $5 million to retire comfortably. Here's what they wrote in their introduction to the issue:

"... Back in the day, $1 million was the symbol of wealth - and the amount financial-planning types said we all needed to live large in retirement. But $1 million just isn't what it used to be. (Forget for instance the beachfront home on Hilton Head Island.) What does it take now?

As we explain later in this issue, figuring out what you'll need is educated guesswork. So let's start with the pile of money pictured at left. That's $5 million, your new magic number. Using a 4% withdrawal rate, that kitty would get you a hefty $200,000 a year, which should be plenty to live richly.

Think $5 million and a life of ease are beyond your reach? (Hint: read the Fortune Magazine issue duh.) Read on for great advice on choosing stocks and funds, finding bargain condos - and making the tricky transition from working stiff to lucky stiff..."

Eric Gelman from Fortune wrote this intro. My favorite part was the last line: "making the tricky transition from working stiff to lucky stiff". If only I get so lucky!

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