No easy formulas exist for determining the Number. While online calculators and magazine worksheets abound, most conventional aids are deaf and dumb to what it takes to lift your spirits and make your heart sing through old age. A financial plan without meaning leads straight to the thudding realization that -- duh -- all the money in the world doesn't buy happiness.
Still, everyone clamors for a Number, however quick and dirty. A friend of mine is relentless. He says he really wants to just walk into a bookstore, pick up a how-to guide and rifle straight to the single page, the chart, the graph, the formula, the elusive ark that will reveal precisely, and for him alone, how much money he needs to gain release from his temple of financial doom.
So I tried, really tried, to come up with a quick and dirty way to give him what he wants, a deus ex Number with which to end this saga. I called several financial advisers and asked if they could devise a simple worksheet, an easy-to-use formula. Not surprisingly, every one of them warned that the Number was not something a thoughtful person should try to conjure on the fly, certainly not while standing in a bookstore with a cappuccino in one hand.
They reaffirmed the need for diligence and access to at least one critical (if low-tech) tool: a shoebox. Into the shoebox should go a year's worth of bills and receipts that yield a precise tabulation of your annual expenses, includingproof of the pocket change you fritter away day to day. Also in the shoebox: all current brokerage and cash management statements; a comprehensive net-worth statement; documents relating to how you plan to dispose of your assets upon your death; all durable powers of attorney, health care proxies, et cetera; a complete file of insurance policies, including life, health, long-term care and liability. Thus stuffed, the shoebox is then emptied onto the desk of a qualified financial planner, who crunches the numbers until they reconstitute themselves into a responsible, conscientious Number. This is about as quick and dirty as planners can imagine, and who's to argue?
Undaunted, I then went to the man who, I assumed, would be the least likely of all to have any patience whatsoever for a quick and dirty solution to the Number. George Kinder, a life-planning shaman, believes that you need to probe deeply into the soul and/or retain an empathetic adviser to help you explore your psyche before you can aspire to a custom-made financial plan. This kind of spiritual mining can be dirty, and it's certainly not quick.
However, the generous-of-spirit Kinder nonetheless proffered some helpful thoughts if you're determined to bypass a lot of soul cleansing to reach a quick and dirty Number.
Kinder's suggestions begin with the magic 4 percent idea: It's safe to withdraw around 4 percent annually from a reasonably well diversified portfolio. If you think you need, say, $100,000 to live each year, simple multiplication tells you that your Number should be $2.5 million. If you need $1 million, then your Number is $25 million. Nothing could be quicker or dirtier. Kinder, however, advises that you take at least a few more steps to refine matters:
Print this page 
Send to a friend
