4 Simple Steps to Calculate Your Retirement Portfolio

A Look at the Markets: Bitcoin & Tesla

Last week, I said that thought a close above 72,000$ would be a bullish signal. We are not at the end of the week yet but Bitcoin has at least broken this level before dropping back below it as I write this newsletter (Thursday 31st). We will see what happens over the coming days.

On the 11th of October, we saw the market’s negative reaction to the Tesla Robotaxi event. Last week, Tesla had an earnings announcement which beat estimates by 22%. This immediately pushed the price above the area of support and resistance we have been monitoring.

4 Simple Steps to Calculate Your Retirement Portfolio

Last week, we explored the 4% guideline for managing withdrawals from your retirement portfolio. Now, let's answer the question - how much money do you need for retirement?

Step 1: Calculate Your Annual Retirement Income Needs

When planning for retirement, start by estimating your annual income requirements. Many people find they need less income during retirement than while working. Consider these factors:

• Reduced work-related expenses

  • No daily commuting costs

  • Less spending on professional clothing

  • Lower food costs (fewer expensive lunch breaks)

• Housing costs

  • Will your mortgage be paid off?

  • Do you plan to rent?

  • Will you downsize your home?

• Lifestyle choices

  • Travel plans

  • Hobbies and leisure activities

  • Healthcare considerations

Step 2: Account for Other Income Sources

Once you have your target annual income, subtract guaranteed income sources:

• State pension

• Company pension schemes

• Other personal or private pensions

Step 3: Calculate your Target Income from your Retirement Portfolio

Let's work through a practical example, assuming you would like a retirement income of €50,000.

Target annual income: €50,000
Minus state pension (for example): -€10,000
Minus company pension (for example): -€15,000
Required income from portfolio: €25,000

Please do the above calculations with your own figures and goals.

Step 4: Using the 4% Guideline

If 4% of the portfolio is 25,000 Euros what is the value of the portfolio?

25,000 / 0.04 = €625,000 (required portfolio value at retirement)

More Conservative Approach (2.5%)

You may want to consider a more conservative withdrawal rate of 2.5% withdrawal:

25,000 / 0.025 = €1,000,000 (required portfolio value at retirement)

Important Considerations

1. Inflation Impact
   Remember that these calculations reflect today's money. Your actual target will need to account for inflation between now and your retirement date.

2. Salary Growth
   The good news? Your earning potential typically increases over your career, making higher savings targets more achievable.

3. Personal Circumstances
   These calculations provide a framework, but your specific needs may differ based on risk tolerance and personal circumstances.

Next Steps

Next week, we'll explore practical strategies for building your retirement portfolio using ETFs (Exchange-Traded Funds) and the power of dollar-cost averaging.

We will also answer a newsletter reader’s question about how to find and analyse an ETF.

Important Note: This newsletter provides general guidance only. Always consult a qualified financial advisor for personalised retirement planning advice.

Unlocking Apple Intelligence on a Mac in Italy

Apple Intelligence, with its powerful image recognition, smart search, on-device processing, and writing tools, may not be officially available in Italy—but there’s a workaround if you have a MacBook with an M1 chip or later (i.e. not Intel). You also need to download macOS Sequoia.

Start by setting your keyboard language to US English, then switch Siri to US English in settings. Next, open the Apple menu, select System Settings, and find Apple Intelligence & Siri. Once there, make sure to turn on Apple Intelligence—this enables features that would otherwise be restricted based on your location.

Give it a try and let me know if it works!

Word of the Day: Workaround

Workaround - noun - countable - a way of dealing with a problem or making something work despite the problem, without completely solving it.