Retirement Plan
To determine the amount of money I will need for retirement, I used the CNN money calculator with references from Dave Ramsey to calculate savings for each month. If I am working as a TESL (Teaching English as Second Language) teacher at the age of 25, my annual income can range from $21,600 to $32,400. For this project, I used an annual income of $30,000 and based off of saving 15% of my income, I will need $467,351 with an income growing 3.8% each year due to inflation and salary growth (Retirement). After the age of 65, I will have $532,635 based off of saving 85% of my income in total (Retirement). However, this estimate is dependent on whether I will retire in the United States or out-of-country; it could be more or less. How and When To Invest Since I am still in college and do not have a job, I hope to start investing when I turn 23 ( I am 21 now) and possibly retire at 65 or 67. This will leave me with about 42-44 years before retirement which will allow me more time to save for the lifestyle that I want. Since I see myself traveling a couple of times a year with a small home and a little hobby, I feel that saving 15% of my income will provide me more than enough for retiring. I prefer to have land than a home with plenty of square footage. Land is more valuable and I can avoid paying a mortgage and high utility bills, which will leave me more money for travels. Additionally, I might not need car if I retire out of the country. Now, I know I will not start off saving 15% of my estimated $30,000 income, which will be $4,500, due to me paying back my student loans before and at the age of 23. Initially, I will probably start at $1,000 then after paying off my loans and other debts, I will transition into saving $4,500 annually. In addition to …show more content…
Creating detailed monthly budgets plans and lowering the amounts of spending on unnecessary items than needs will help my investment grow before the age of 65. My current savings plan did not account for retirement but since I made a simplified retirement plan, I know I can make adjustments by paying off debts first and using the Step Down Principle when spending. During this time, I will lower the amount I travel and shop, especially since I want to buy at least five acres of land to build a little home before retiring. Afterwards, I will take the time out to look through all of my estate and plan out who will I give my items to, especially if I have a family. I will probably hire a financial planner to help with the process, but until then. I will plan out the rest of my retirement until