This Retirement Number Matters as Much as Your 401(k) Balance
Written by Christy Bieber for The Motley Fool -> The balance in your 401(k) has a big impact on your finances in retirement. It's not the only key number that matters a lot. You also need to know another number to ensure your money lasts. When it comes to determining whether
The balance in your 401(k) has a big impact on your finances in retirement.
You also need to know another number to ensure your money lasts.
When it comes to determining whether you have enough money to retire, chances are you're focused on the balance in your 401(k) or other retirement plans. After all, the more money you have invested, the more financial security you should have.
However, the balance alone isn't the only number that matters. Here's another key factor to consider when determining whether you're prepared to retire without money worries.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The other key number that makes a huge impact in retirement is your withdrawal rate.
That's the rate at which you take money from your retirement plans . For example, if you have a nest egg of $1 million and withdraw $60,000 each year for income, you'd have a 6% withdrawal rate.
Your withdrawal rate matters because if you withdraw too much money too quickly, you will not have enough invested to earn the returns you need to maintain your account balance.
