Читать книгу More Straight Talk on Investing - John J. Brennan - Страница 41

Personal finance experts have a rough rule of thumb about how much money you'll need in retirement. It states that to live comfortably, you'll need annual income that's at least 70% to 80% of what you were earning before you retired. This money will have to come from a combination of Social Security, pension or other workplace retirement plan, and personal investments.

People often underestimate how much they'll need in retirement savings. The retirement phase of your life will hopefully last decades, and although your investments will continue to produce returns during that period, you are likely to be drawing down your portfolio at the same time. Suppose, for example, that you plan to draw on your retirement savings for 30 years and expect to take a little more out each year so that your spending can keep up with inflation. To be able to ride out periods when the financial markets turn sour or inflation runs high, you probably should not spend more than 4% of your retirement savings in the first year. A little math shows that you'll need an initial nest egg of $500,000 if you want to be able to spend $20,000 in the first year, and to increase that amount by the rate of inflation in the ensuing years.

The 4% withdrawal rate is another common financial rule of thumb. It is grounded in academic research, but it is not foolproof. For example, if you invest too conservatively and have a longer-than-average retirement, you could run out of money. I am admittedly conservative, so, when asked, I always suggest that people consider a more conservative 3% or 3.5% rate of withdrawal to ensure that they don't deplete their savings. (As an aside, any rule of thumb should be taken with a proverbial grain of salt. Your withdrawal rate, for example, should be personalized to your situation and reviewed periodically to account for environmental factors, such as market returns and inflation.)

Fortunately, there are many ways to accumulate a nest egg for retirement. And today's savers have some rewards that their great-grandparents would have envied. Employer-sponsored retirement plans and Individual Retirement Accounts (IRAs) shelter your investment earnings from current taxes, which makes it much easier to accumulate wealth. With a company retirement plan, your employer may even supplement your savings with matching contributions, in effect giving you a pay raise that will grow and compound over time. The most common workplace plans include 401(k) plans, 403(b)(7) plans, and 457 plans, which are named for sections of the tax code that established them. You can also invest for your retirement by setting up an IRA with an investment provider.

Your retirement savings bucket may be the biggest bucket you need to fill, but it also may be the easiest of the buckets to fill as long as you get an early start. If you start in your early 20s, building a retirement nest egg is more a matter of saving than investing. Time and the compounding of your investments will be bigger factors in your success.

Here's a piece of advice: If you have a 401(k) or other retirement plan at work that lets you have savings automatically withheld from your paycheck, go for it. Contribute as much as the plan permits. If you can't make the maximum contribution, at least contribute enough to receive the full matching amount that your employer contributes, assuming that your employer offers a matching contribution. Then make it your goal to make the maximum contribution as quickly as you can.