What financial resources are required to plan for retirement?
Although it differs from person to person, if you want to live a respectable retirement life, you may calculate the approximate range you need as long as you know what your largest post-retirement expenses will be.
The three largest retirement expenses are:
- Living costs
- Medical treatment
- Amusement, and leisure
Each person’s monthly consumption might be thought of as a “minimum benchmark” for an ideal retirement lifestyle.
Assume that the pair spends around 10,000 per month on bare necessities.
However, if you want to improve your life,
The couple’s income can be regarded as being greater than 20,000 yuan per month, and if it reaches 40,000 yuan, it is considered to be very comfortable.
Older people’s leisure and entertainment options include playing sports in the park or fulfilling a lifelong ambition of traveling freely for business.
Traveling abroad is the most expensive of these because low-cost airlines are unlikely to exist. You don’t need to cut prices drastically.
Older friends and relatives who are in town and intend to travel abroad claim that setting aside an average annual budget of 10,000 is not excessive.
Although you might not notice it when you are young, as you get older, your medical expenses will rise dramatically. Just ask the senior citizens at home if you don’t believe it.
The price of medical treatment will quickly double after age 51, and it will double once more after age 65! There must be more than 2 million people if you want to be extremely safe and comfortable. Although it is difficult for regular people to accomplish, is 500,000 sufficient? What happens if you live past 20 years?
The solution: “Cash flow, not how much money you save, is the key to retirement.”
If 500,000 is divided out over 20 years, for instance,
Only 25,000 yuan or so in annual cash flow is required to cover the couple’s retirement’s essential costs. Cash flow is the money that will continue to come into your bank account each month. If you save a lot of money and spend it slowly when you retire, you will doubt your ability to spend it while perched on a mountain and will be left with no choice but to live. Living a “wealthy but no quality” retirement lifestyle.
The amount of “cash flow” you have, such as stock dividends, rental income from real estate, or more than 25,000 yuan annually, should be taken into account rather than how much money you need to save. You can keep up a constant standard of living after retirement, no matter how long you live.