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Investing & Finances

The "Magic Number"

There are a number of calculators on the internet that will allow a future retiree to punch in the numbers to see if they have enough money to retire. You can find some of them at this link: http://moneyover55.about.com/od/preretirementplanning/a/retirementcalcul... The problem with most of them is that it is difficult if not impossible to make an accurate projection of how well your investments will do for even a short period of time, much less for decades.

How much does it take?

When my wife and I starting thinking seriously about retiring early, we gave a lot of thought to "The Magic Number." That number consisted of the amount of money that we needed to have in order to leave our jobs and feel confident that we wouldn't have to return to them down the road. It quickly became apparent that "the number" was a moving target and depended on a number of variables that were impossible to predict.

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