Posted by Tim Stobbs on October 5, 2007
I’m starting to develop a pet peeve. It started out small, about the size of a flea, but now it’s morphed into a rather large beast about the size of a lion. It has to do with everyone constantly stating things along the line of ‘how can you live on $30,000 per year when your income was $70,000 before retirement?’
Let’s get this completely straight. Would you ask a fish about living in a tree? No, good. Because a fish living in a tree has about the same relationship as your pre retirement income does to your retirement income. There really isn’t one. You see retirement has not much to do with your current income, but rather everything to do with your current spending.
I don’t care what you make, but if your living off $2000/month you need about $2000/month in retirement. If you make $100,000 or $50,000 a year, that only determines how much you have left over to save for an early retirement.
So if you sit down with an adviser some day and they ask you about your income to help you plan your retirement. You have my permission to give them a blank stare and then use a snide remark of your choice.