How much money you need to retire depends upon several factors. Your spending requirement in retirement. Age at retirement. Pension/social security income. Asset allocation and how well those assets are expected to perform during retirement.My question is how do I know how much I need to retire?
Also what is a safe withdrawal rate?
You haven't provided enough information in this post for folks to provide a suggestion on how much you need.
I suggest you read about and put your current financial picture into the TPAWplanner to see where you are. https://tpawplanner.com/ and viewtopic.php?t=331368 If you do this, the planner will show you how much money will be available for spending/month during retirement if the markets perform much better than expected, as expected, or much poorer than expected. (Using a Monte carlo analysis)
As for what is a safe withdrawal rate, this depends on all those factors I mentioned above. Rather than think about a fixed number (like 4% or 6%) that get thrown around and discussed, view your retirement income as variable. Spending will vary depending upon how well your portfolio performs during retirement. Use variable withdrawal calculators like tpawplanner to determine how much money you have available for spending in retirement.
Since you've been investing in an SP500 fund already, I suggest keeping your money in equities until about 5-10 years prior to retirement. At that point, invest more money in fixed income (like a total bond fund) to reduce volatility of your portfolio balance.Any advice on what I should be investing in? Keep with s and p index funds or change as I get older.
An SP500 fund is fine. You should consider investing in a total stock market index fund to capture a bit more diversification in your holdings.
Statistics: Posted by dogagility — Sun Nov 17, 2024 3:28 am — Replies 2 — Views 151