WMG Wealth Series - Part 3 - Planning for Retirement

Real Estate Agent with Dream Key Team DRE# 621972

One thing that I have discovered and Ben, Chad, and Bob have made clear during the first 3 sessions of the Win Make Give series is, this is not just a class, it’s an experience! The last series was all about self-discovery and a serious reality check. The session prior to that was understanding exactly what the definition of wealth is. These are the foundations that are needed to accomplish your long term retirement goals. If you don’t know what the target looks like, where it is, and where you want the arrow to land, you will never hit the target.


Now that I have the foundation set, I can now set my focus on the end goal. I think about this all the time, my wife and I talked about, I have savings, I have retirement accounts, I have some investments, but never really looked at exactly how it is going to get us to the next level. As this episode is being consumed, more and more by the attendees, I am discovering that I am not alone.


Bens asks the simple question, “How much money do you need to live on annually so when you are not working, that money comes in automatically”? This of course would include those things that are required and those things that are and those things that are optional. How much do you need to retire? 


As always, Ben breaks this down into a simple formula. That formula is the 4% rule. The 4% rule is:


  1. First, decide how much money do I want to live on annually when I retire and that will last me for 30 years.
  2. Divide that number by .04 (4%)
  3. That number is the amount of money you will need to be in the bank by the time you retire.

It is amazing to me how much I will need to save to meet my required number. Example: You want to live on 100,000 a year for the next 30 years. You would need to have over 2.5 million dollars in the bank by the time you retire. The number can feel a bit overwhelming, or it might bring you so solace because now you know you have an achievable goal and you are on track.


Ben, Chad, and Bob provide some additional options to consider that can help bring you closer to the amount you will need in the bank. Some of those suggestions are reducing the amount of debt you currently have. The tracker from Episode 2 is essential in helping you get this done! Pay off your home, pay off your vehicles, invest in real estate that can bring you back cash flow, and even consider selling some things of value that you have collected over the years.


All of these strategies move us a little closer to our goal. For example, if you pay off your home and your mortgage is typically 2,500.00 per month then you can have that amount going toward your retirement. In 30 years, that is around 900,000.00 and that is a big contribution to your account! Pay off your $555.00 car payment and in 30 years that becomes another 200,000.00. Knowing these are options will help you to hit the retirement target.


So, now you have had a reality check, you know where the target is, you know where to aim and when to release. You will now most likely hit the target! What is your target?


Comments (1)

Roy Kelley
Retired - Gaithersburg, MD

This is good information to share. Many real estate agents are not prepared for a comfortable retirement.

May 31, 2020 04:36 AM