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Oops.. I'm broke by 75?

by on June 1, 2010

I ran across a cool personal finance site the other day – learnvest.com. It’s a site focusing on the personal needs of women, which I strongly relate to – not only because I am a woman but because of the following facts: as a woman I’m going to live longer than my spouse, I’m going to take more time off (maternity leave, etc) and I will probably make less than my male counterpart – which makes retirement a much more pressing issue for all women in general. Being broke while being old is quite a bleak thought, at best.

The site is rather crowded and there’s a whole barrage of information provided from the sun tanning to the cheapest savings account. But the one thing that’s definitely worth checking out are their calculators – they’re free and very easy to use. Most importantly, they show you your “broke”-factor, as I like to call it. Their Retirement Shortfall calculator is a great way for you to see how much income you’ll need for after retirement and how long you’ll be able to sustain the kind of lifestyle you had prior to retiring.

As a 22 year old – retiring seems EONS away but I also know that each day brings me closer to it (sadly..). And apparently, given the kind of life-style I want to have as a 65 year-old, my nest-egg will be long gone by the time I’m 75 – so, I have 10 years of somewhat okay retirement and then the rest of my years would be spent shuttling from one kid’s place to another’s – doesn’t sound too promising in my mind. The fact that I am a potential future liability not only for myself but for my future family is a daunting enough prospect for me to get my act together now. LearnVest recommends saving putting away 15% of your income today in an IRA or ROTH IRA (they have a great page on the differences between the two as well that’s worth checking out).

I’d always thought that it was enough to save ~10% of my pre-tax income but I clearly forgot to take into account inflation (can go up to 3% in the future) and any fluctuation in the returns on my assets. So, my short-term goal is to see how I can change my life-style today to increase that 10% to 15%…

I’m not a big believer in penny pinching or long checklists of things I should be doing to save (they’re boring and honestly, useless). I’m looking for an effective way for me to be leveraging my current assets in order to be generating returns that can sustain my current lifestyle as well as add to my retirement goal. Sounds lofty – but I’m sure it’s doable, just like everything else 🙂

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From → Personal Finance

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