I was speaking to a colleague of mine earlier today. We talked about the level of national savings of the country. He said he puts away roughly 20% of his take home salary (net of taxes and social security/pension charges) each month. I put away approximately 25% each month. He's much younger so he has more time to 'sock away' his savings. While I am unsure whether 25% savings each month is enough to provide a blanket of financial security in my twilight years, I hope I can maintain a modest lifestyle.
Speaking to financial advisors many claim that I should put away at least 20-25 times my annual salary for retirement. I wonder if I really need that amount of money 'socked away'. I mean when I am pushing 70 or 80, do I really need that much money to sustain life? Should I expect to consume that much? Surely, I expect I will not - but, I should plan for emergencies and special contingencies.
Now, let's put this into real perspective. Take someone like Jack Welch, former CEO of GE, as an example. In Jack's best years, he probably took home roughly $10M - $25M a year. So, if Jack wants to maintain the same lifestyle he is accustomed to, he needs to have over $500M put away to enjoy his remaining years on the planet. Does Jack really need so much money to enjoy his retirement? I mean, if he invited me for dinner, I would gladly pay just to hear him talk about life, business and politics. I imagine the same for many others. So, Jack's probably got all his dinners and lunches covered for the rest of his life. Where else would Jack need to spend money?
Recent Comments