JACQUES GAUVIN, RELIGION

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Retirement

By Jacques Gauvin, June 7, 2007

Do you have an idea of how much you will need for retirement? Here is an example.

$2000 per month living expenses (rent, food, clothing, car, insurance, etc.)
x 12 months
= $24,000 per year
$30,000 per year before taxes (approx.)
x 30 years of retirement
= $900,000 needed to retire today.

If you have
$10,000 in savings
and invest at
+ 20% per year compounded
it will grow to
$954,000 in about 25 years

If you have saved up $10,000 by the time you are 35 years old and you can find investments that will pay 20% or more per year, you stand a chance. Bear in mind that this does not take into consideration inflation. My rent more than doubled in the last thirty years. So it is not unrealistic to think that you will need $2,000,000 in twenty five years to retire at this very modest standard of living.

The odds of you having enough to retire if you are older is even worse. But if you are fifty five and have
$100,000 saved
+ 20% per year compounded
it will take about 13 years to reach
$1,000,000
and about 17 years to reach
$2,000,000.
You might be able to retire at the age of 72 and pay your way to 102.

That doesn t sound too bad except that I don t know of a place to invest that will give you returns of 20% per year for 13 consecutive years or 25 consecutive years as in the previous example. Couples would have an easier time.

Of course with superior money management your funds can continue to grow once you retire but GICs or straight savings rarely beat inflation.

I believe that mutual funds and mutual fund promoters are very deceptive and give false hope. I think that the present bull market in precious and base metals is an opportunity to make a significant financial gain that might allow you to reach your goal with well chosen stocks and timely buying and selling and of course with God s blessings.

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