USA TODAY US Edition

HOW TO CLIMB OUT OF THE INCOME-DEPENDENCE TRAP

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If you want to break your dependency on your income, you must save a higher percentage of your income every year until the day you retire.

EXAMPLE:

At age 40, save 10% of your income.

Each year after, increase your retirement savings by 1%.

Using this strategy, at a bare minimum an investor would only be living on 65% of their income at age 65.

HIDDEN BENEFIT TO THIS PHILOSOPHY: You will accumulate a bunch of money. But this time, you’ll have a bunch of money and no income dependency issues. What I love the most about this idea is that it gives retirement hope to many people who never thought retirement was in the cards.

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