Think you need a million dollars to retire? Think again

money-us-dollarsMore than 70% of retirees have less than a million dollars in net worth. This will come as comforting news to many people who fear they are behind in their retirement savings. Furthermore, two-thirds have less than $100,000 in annual income, and four-fifths have Social Security retirement benefits, averaging $1,294 per month, as their main source of income.

These are some of the findings reported in an e-book by MoneyTips.com. Dealing with rising living costs, raising children, caring for aging parents, and a still-weak economy has sacked many people’s retirement plans.

The key to making retirement work is managing your lifestyle and expenses. We can look at the example of Mike McDonald, who retired at age 67 after raising six children. He and his wife had invested in a half-dozen rental properties. When he retired he sold them, along with his house and many of his belongings, leaving him with about $250,000 in savings.

He spends much of his time sailing along the coast of Florida, docking at various marinas. His Social Security is about $2,000 per month, and his marina fees are about $500. Without a car or house payments he has maintained his lifestyle without having to touch his nest egg, which he figures will last well into his late 80s.

People who started preparing for retirement later in life can take heart from Toni Eugenia. According to MoneyTips.com, about 25% of people did not save at all for retirement in their 40s and 50s. About one-third of Baby Boomers have no retirement savings. At 57, Eugenia was nearly $200,000 in debt and earned a slightly over $50,000 a year. After taking a personal finance course, she and her fiancé paid down all their debt within three years. They later married and moved to Seattle, and were able to retire early, a full decade earlier than most people.

The e-book is free for download with a membership to MoneyTips.com, which is also free.

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