A recent poll by Northwestern Mutual found that most Americans believe they will need about $1.46 million to retire comfortably, but those looking to retire early in expensive areas like coastal California may require much more. One 44-year-old seeking advice on the Bogleheads forum asked if $5 million would be enough for a modest life in such a costly location. Responses varied, with some suggesting that this amount would provide a comfortable but not luxurious lifestyle, while others pointed out that housing and other expenses could quickly eat up that budget.
Financial experts like Suze Orman advise against early retirement unless you have saved $5 million or more, as unexpected expenses can arise as you age. The definition of “frugal” living also came up in the discussion, with some noting that what one person considers frugal might not be the same for someone else. Strategies for managing retirement expenses include researching the cost of living in your desired location, being realistic about your lifestyle goals, and considering potential health care costs.
In conclusion, determining the right retirement nest egg requires a personalized approach that takes into account various factors like location, lifestyle goals, and potential expenses. Researching costs, being realistic about expenses, and planning for unexpected costs like health care can help ensure a comfortable retirement, even in expensive areas like Coastal California.
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