Start planning years before retiring
Start planning years before retiring

Richard Marto
Gray, Tenn.
Family: Married, two children
Age: 75
Job before retirement: Sales manager for a computer company

My wife and I stopped working in 1998, but we started planning years before that. We made sure we had paid off our house, car and life insurance premiums, and that eliminated three major expenses. We computed annual property taxes, car insurance, homeowners insurance, medical and hospitalization insurance and all utilities (phones, cable TV, Internet and other entertainment) and deducted these expenses from our total expected annual income.

I also used a website to help me determine our income and expenses. Now, I use and every six months or one year, just to check how long our dollars will last and to adjust expenditures.

Because we're both very conservative, our plan worked out better than we expected. We probably overestimated the expenses and underestimated the investments, which performed very well. I was a very astute investor over the 24 years that I worked.

Unless you have investments of seven figures or larger, you should look at 50% to 80% of your annual net income while working. By talking to others and calculating expenses, you can find a number that seems reasonable.

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