How good is this formula -> Age x Networth / Yearly Expenses. >1000 you can retire?
I've seen this formula discussed a couple of times,which is age and expenses dependent.
The formula is based on the assumption that you want to leave nothing to anyone when you croak, not to kids or relatives - so this formula is not for everyone. It is meant only for those retirees who plan to leave no inheritance to anyone.
Multiply Age x Networth, then divide by Yearly Expenses
If it is greater than 1,000, you can retire.
Age is the average between husband and wife.
Say, your age is 55 and Networth is 1.2 million. Multiply those and you get 66,000,000. Divide 66,000,000 by say $60,000 (your yearly expenses), and you get = 1,100. Since 1,100 > 1,000, formula says you can retire.
What do you guys think.
I've seen this formula discussed a couple of times,which is age and expenses dependent.
The formula is based on the assumption that you want to leave nothing to anyone when you croak, not to kids or relatives - so this formula is not for everyone. It is meant only for those retirees who plan to leave no inheritance to anyone.
Multiply Age x Networth, then divide by Yearly Expenses
If it is greater than 1,000, you can retire.
Age is the average between husband and wife.
Say, your age is 55 and Networth is 1.2 million. Multiply those and you get 66,000,000. Divide 66,000,000 by say $60,000 (your yearly expenses), and you get = 1,100. Since 1,100 > 1,000, formula says you can retire.
What do you guys think.