Freedom is something that most of us strive for in many areas of our life.
the quality or state of being free: as a: the absence of necessity, coercion, or constraint in choice or action b: liberation from slavery or restraint or from the power of another : independence c: the quality or state of being exempt or released usually from something onerous <freedom from care> d: ease, facility <spoke the language with freedom> e: the quality of being frank, open, or outspoken <answered with freedom> f: improper familiarity g: boldness of conception or execution h: unrestricted use <gave him the freedom of their home>
As the definition states freedom is the ability to do what you want, when you want to.
Now of course there are wise limits on the nature of freedom. I am not “free” to take another person’s property or life. That would be a violation of their freedom to use their own property.
The American Dream entails the dream of “Retirement”. That time in your life when the necessity of a 9-5 job is gone. You are free of the tyranny of a boss, commute, and cubicle.
A good definition of Retirement Freedom is having the ability to invest your time, efforts, finances, and energy into the activities you choose.
This freedom varies from one person to the next. It could be vacations with your grandkids, that cruise to Europe, a home in the mountains, time to serve at your church, or the time to work in your garden.
This freedom is made possible due to the accumulation of wealth you have made during your working years. Your wealth is now working for YOU!
The years of saving and investing have finally paid off, allowing you to live off of the income your investments provide.
The Math of Retirement Freedom
How much do you need to live the retirement you have hoped for?
If you don’t have the luxury of a corporate pension plan, you will need to live off of your investment income alone.
Assume that your investments provide a conservative 5% return per year (for every $100 invested you get $5 of income per year), you will need about 20 times your expected income to live without putting your retirement at risk.
In order to maintain the same lifestyle you currently have, you will need almost 20 times your current income. Multiply your current income by 20.
Here’s some numbers:
- If you make $50,000/year you will need approximately $1,000,000 of savings at retirement.
- If you make $75,000/year you will need approximately $1,500,000 of savings at retirement.
- If you make $100,000/year you will need approximately $2,000,000 of savings at retirement.
- If you make $200,000/year you will need approximately $4,000,000 of savings at retirement.
This is just to maintain your current lifestyle. That does not include your trip to the Bahamas, the tour of the Holy Land, or the lake house you wanted.
What did you come up with? How many dollars will it take for you to retire?
The Path to Retirement Freedom
But how will you get that place of wealth?
There’s always the stock market. How is your 401k doing these days? Seems like this route is entirely outside of your control. You have no way to control whether the market goes up one day or down another.
You could rely on the government. How well will Social Security benefits allow you to live out your final days with family and friends? Does that allow you to live out your dreams?
The lottery is a possibility, but not very likely.
You have heard about real estate investing, but don’t know where to begin. Your friend owns some rental homes. The ability to control your own investments is appealing.
If this is the case, give Maclennan Investment Group a call at (925) 324-8626. Let us show you another path to retirement freedom.