FIREHacker
Dryer sheet wannabe
- Joined
- Jan 25, 2018
- Messages
- 15
The general method I've seen for determining how much you'll need in early retirement is based on the 4% Rule. That is--take your current expenses, multiply that by 25, and that's how much you need.
Example: say my expenses in 2018 is $25k. Therefore, I'd need $625k in today's dollars.
...but for people currently working, and their employers are paying most of the health insurance, their current expenses DON'T seem to factor in the health insurance costs they would be paying if they were retired.
So wouldn't the expenses need to be treated as though I were retired in 2018? If I add the amount I would be paying for health insurance in retirement, then my expenses are now, say, $35k. Thus, I'd need $875k in today's dollars, not $625k.
Do people just ignore factoring in estimated health insurance costs since it's hard to say how much it will be in the future? I'd think having some estimate for this built in is better than none at all.
Am I missing something here?
How did you calculate your target number?
Example: say my expenses in 2018 is $25k. Therefore, I'd need $625k in today's dollars.
...but for people currently working, and their employers are paying most of the health insurance, their current expenses DON'T seem to factor in the health insurance costs they would be paying if they were retired.
So wouldn't the expenses need to be treated as though I were retired in 2018? If I add the amount I would be paying for health insurance in retirement, then my expenses are now, say, $35k. Thus, I'd need $875k in today's dollars, not $625k.
Do people just ignore factoring in estimated health insurance costs since it's hard to say how much it will be in the future? I'd think having some estimate for this built in is better than none at all.
Am I missing something here?
How did you calculate your target number?