Between the constant barrage of media sensationalism decrying the collapse of the stock market to the relentless stream of magazine, newspaper, and television stories telling you that you probably don’t have enough money saved for retirement, even the best investor can start to get worried when it comes to thinking about his or her retirement fund.  The good news is, your situation might not be as dire as you think.

If you follow the famous 4% rule in finance, which states you shouldn’t draw more than 4% of your principal each year and, if history is any guide and you’ve chosen your investments wisely, your money should survive even a Great Depression scenario, there is an interesting quirk in the math.  Namely, for every $ 1 in extra income you can earn from side work or projects during retirement, you can avoid saving $ 25 in retirement funds.  That means expanding your income by $ 10,000 per year would reduce the total money needed in your retirement fund by $ 250,000.

This is what is known as the expanding-the-pie rather than cutting-your-costs school of personal finance.  For some people, it might make sense.  This is especially true for those who want to get out of the house and remain actively engaged in the community.  Whatever your situation is, it’s important to know there are alternatives to merely piling up millions of dollars in retirement fund treasure.  You don’t have to live in the poorhouse or have a private banker on your speed dial.  To learn more, read this week’s newest article You May Not Need As Much Money In Your Retirement Funds As You Think.

Don’t Have Millions of Dollars in Retirement Funds? You May Still Be Okay. Seriously. originally appeared on About.com Investing for Beginners on Saturday, September 24th, 2011 at 22:39:35.