Question

Assume you plan on retiring in 30 years (i.e., in the year 2049). Share your estimate of your future financial need, in terms of annual earnings. Share your desired quality of life and living standards. Finally, define both your role and the government’s role, in meeting your future financial requirements.

Answer 1

My future financial need, in terms of annual earnings, is around $30,000 per annum. I am a single male person and as I have no dependents the amount of $30,000 on an annual basis will be sufficient for me to maintain a proper life. Most of my income will be spent on food and medical expenses and after retirement I will not have much of an expense apart from spending on food items and my medical expenses. I have determined the amount of $30,000 after taking into account inflation.

My desired quality of life and living standard will be fairly modest after retirement. I am not anticipating big bills in terms of lot more travel, new car etc. I just want to live in a relaxed manner, eat well and ensure that I am fit and healthy. I would also like to go on a vacation once every two years.

My role in meeting my future financial requirements is that I will have to start saving for retirement on an immediate basis. I have been putting money into different avenues like 401(k), IRA, health saving account. All these have been earmarked for retirement. The government’s role in this regard will be to provide me with no-cost individual retirement savings accounts to providing tax breaks for contributions. All these, when combined, will help me to meet my future financial requirements in an optimal manner.