About 1 out of every 7 people will live past 95.
And if they plan to retire in their 60s, that leaves a huge variable of how many years of retirement they will need to fund.
An “interest only” retirement plan removes one of the biggest fears about life after leaving your job: Will my money outlast me?
Because if you can save enough money now, you can fund your retirement by living off your returns without ever touching your nest egg.
NerdWallet crunched the numbers, and we can tell you how much you need to save now to get $60,000 every year in retirement, without taking a bite out of your principal.
First, some ground rules. The numbers assume you will retire at 65 and have no money in savings now.
For investing, we assume an annual 6% return when you are saving and a more conservative 3% rate for your interest only retirement. We do not factor in inflation, taxes or any additional income you may get from Social Security and your 401(k).