The Money with Katie Show How to Calculate if You've Already Saved Enough for Retirement—and If It's Time to Slow Down
Aug 12, 2024
Discover how the concept of Coast FI can change your approach to retirement planning. Learn to calculate if your savings are sufficient, with the power of compounding working in your favor. The discussion also emphasizes the emotional aspects of retirement, highlighting the importance of knowing your financial landscape. Couples face unique challenges in discussing finances, and they stress the value of redefining retirement for a fulfilling life. Plus, hear cautionary tales about estate planning and the significance of pursuing meaningful work in your golden years.
AI Snips
Chapters
Transcript
Episode notes
Calculating Coast FI
- Calculate Coast FI by plugging your current investments into a compounding returns calculator, assuming 6-7% annual returns.
- Determine if the resulting 4% withdrawal rate at your desired retirement age covers your expenses.
Lifestyle Inflation and Coast FI
- Coast FI calculations can change with lifestyle inflation; Katie's initial Coast FI number became insufficient as her spending increased.
- Using a post-inflation growth rate (6-7%) helps estimate future purchasing power when calculating the 4% withdrawal rate.
Katie's Coast FI Experience
- In her mid-20s, Katie calculated $350,000 as her Coast FI number, allowing her to take career risks.
- These risks unexpectedly led to higher-paying opportunities, highlighting the unanticipated benefits of Coast FI.