How much do you need for retirement

[bigbravehog]

the post from @watchman about calling it quits got me thinking about a retirement question for the NES brain trust.

How much do you think is needed for retirement. Assuming debt free, own your home, and contemplating somewhat minimal retirement plans in reasonably decent health.
I don't have a financial advisor yet, but looking into online retirement plans from Fidelity that seem to imply anything less than $1m in funds/assets are needed for a comfortable retirement.
I'm nowhere close to that, but do have a 403b and employer cash balance fund of about half that amount.
I plan to stay in MA unfortunately, for the foreseeable future, but winning the lottery would change those plans.

 

[paul73]

declare yourself bankrupt, get rid of all assets, get a public housing sponsored apartment - and then you may need nothing at all.
there are only 2 modes left to prosper in this country - you can either be broke with nothing at all, or be a multi-millionaire.

all in between will be screwed no matter what.

 

[Kevin_NH]

The stock answer is the 4% rule.

Inflation over the last couple of years has really FUBAR'd the 4% rule, though if you don't plan to be alive for another +35 years nor care to leave anything to your heirs, you can play fast-and-loose with that rule.

How much do you think is needed for retirement. Assuming debt free, own your home, and contemplating somewhat minimal retirement plans in reasonably decent health. I don't have a financial advisor yet, but looking into online retirement plans from Fidelity that seem to imply anything less than $1m in funds/assets are needed for a comfortable retirement. I'm nowhere close to that, but do have a 403b and employer cash balance fund of about half that amount.

The majority of the people I went to school with have well north of $1MM in funds/assets, the ones I actually still talk to all feel like they're nowhere near secure in their ability to retire anytime soon -- those with kids at or below college age being the least confident.

Personally, given at least two million (over and above the value of my home), I might consider retirement a possibility.

 

[PaulR]

I'd like to have a couple million, liquid cash.
I doubt that would be enough though, I like to ski and go out to dinner.

edit: so ya based on the 4% rule above, I could live on 80K a year, that's not too bad.

 

[mr bill]

I'm wondering how medicare compares to private health insurance. Anyone on Medicare have wisdom to share ?

 

[SKumar]

The stock answer is the 4% rule.

If you don't actually care to leave anything to your heirs, you can play fast-and-loose with that rule.

I’ve heard the same. 4% is conservative, but that’s better than overestimating. Plus, companies don’t pay dividends every time, but having a strong track records helps.

 

[allen-1]

Unless you intend to invade principal, you need the income from your holdings. That plus social security would "replace" your paycheck. Figure out what your expenses are and compare the two.

I know, personally speaking only, that my holdings have taken a beating in the last year, and we're being very cautious in our forward planning.

 

[paul73]

Unless you intend to invade principal, you need the income from your holdings. That plus social security would "replace" your paycheck. Figure out what your expenses are and compare the two.

I know, personally speaking only, that my holdings have taken a beating in the last year, and we're being very cautious in our forward planning.

all i know about my future retirement - i am trying to do my best to pay off my mortgage. which may be severely jeopardized by both kids going to college.
and samples of many people i know having to feed and support their kids coming back from college with no work prospects and no desire to work or live on their own.

but, at least, i`ve listened to larry and did not invest into the ftx.

 

[bigbravehog]

The stock answer is the 4% rule.

Inflation over the last couple of years has really FUBAR'd the 4% rule, though if you don't plan to be alive for another +35 years nor care to leave anything to your heirs, you can play fast-and-loose with that rule.

The majority of the people I went to school with have well north of $1MM in funds/assets, the ones I actually still talk to all feel like they're nowhere near secure in their ability to retire anytime soon -- those with kids at or below college age being the least confident.

Personally, given at least two million (over and above the value of my home), I might consider retirement a possibility.

Even in this economy, it appears the 4% rule is still valid....

Is the 4% Rule Still Valid?​

In recent years, some have questioned whether the 4% rule remains valid. They point to low expected returns from stocks given high valuations. They also point to low yields on fixed income securities. While both concerns are real, the 4% rule has been proven reliable through a wide range of difficult markets.

As noted above, Bengen’s analysis of the 4% rule has stood up to the stock market crash of 1929, the Great Depression, World War II and the stagflation of the 1970s. While none of us knows the future, history strongly suggests that the 4% rule is a reliable approach to determining how much one can spend in retirement.

 

[PaulR]

I'm wondering how medicare compares to private health insurance. Anyone on Medicare have wisdom to share ?

From what I gather, medicare covers everything and is dirt cheap. Most everyone when they are first eligible jump right on it.

 

[IPSC_DRL]

I am distressed to see so many people in these threads talking about paying for their children's college. As I stated in the other thread, i did financial work for about 5 years and have read/learned quite a bit on my time on this earth. Granted, not as much as Mr. Boudrie but that guy is a savant.

One thing that I have always stressed to people (clients or just friends) is YOU DO NOT PAY FOR CHILDREN'S COLLEGE UNTIL YOUR RETIREMENT IS 100% FUNDED!
Once that is taken care of, fine.

I am the last of 9 children from a working class family. My dad was a boilermaker and my mom was a nurse. She worked 3rd shift to be home with the kids during the day and he was gone most weeks building power plants all over the northeast. I'd see him mostly on weekends. They could/did mot pay for college yet all of my siblings are well off and productive members of society. not one of them has a mortgage and a couple own 2 homes.

When I was a kid we had a YUGE garden and my mom canned everything from pickles to yellow beans. We had a root cellar and dad would get 100 lb bags of potatoes and 50 lb bags of onions for cold storage each fall.

I have always said that the greatest gifts my parents bestowed upon me was a solid work ethic and knowing the value of a dollar. I went to tech school and payed my loans for that education myself.

Read "The millionaire next door" to learn how to achieve financial freedom.

 

[CoastieRon]

I found this pretty awesome calculator

Retirement Pension Planner Calculator

Retirement Pension Planner Calculator

www.moaa.org

 

[IPSC_DRL]

From what I gather, medicare covers everything and is dirt cheap. Most everyone when they are first eligible jump right on it.

You need to gather more. I assume you are too young to be partaking in MC

 

[ddeck22]

the post from @watchman about calling it quits got me thinking about a retirement question for the NES brain trust.

How much do you think is needed for retirement. Assuming debt free, own your home, and contemplating somewhat minimal retirement plans in reasonably decent health.
I don't have a financial advisor yet, but looking into online retirement plans from Fidelity that seem to imply anything less than $1m in funds/assets are needed for a comfortable retirement.
I'm nowhere close to that, but do have a 403b and employer cash balance fund of about half that amount.
I plan to stay in MA unfortunately, for the foreseeable future, but winning the lottery would change those plans.

The only way to answer this question is to know your expenses. If you know your expenses you can work backwards from there. If you spend $25,000 per year, you will only need $625,000 at 4%.

If you spend $50,000, then you'll need $1.25 million.

The old adage of "80% of your working salary" assumes you were spending most of your salary pre-retirement. That's not the case for everyone.

I've tracked my spending for 15 years and can tell you exactly how much I spend. Then add some on top for increased expenses or medical. It gives you a really good place to start to figure out the answer. Of course, investment returns and inflation will play a big part in your post retirement scenario and there are ways to deal with that, but if you are looking for a number to hit, I'd go with your predicted yearly spending times 25 (which is 4% withdrawal).

 

[bigbravehog]

I found this pretty awesome calculator

Retirement Pension Planner Calculator

Retirement Pension Planner Calculator

www.moaa.org

awesome - thanks

 

[CoastieRon]

Using the above calculator, I'm going to be able to retire the year I turn 60 due to a couple of key factors:

1. My Coast Guard pension kicks in that year
2. I am compensated by the VA for disabilities
3. My RTX pension kicks in that year
4. I can switch to Tricare for life, which supplements Medicare
5. Kid's college fully cared for
6. Zero mortgages/car notes/loans

My retirement "savings" were not well funded while I was still active duty, and I should have done a better job at that, but I have been stuffing it away since I left active duty

 

[troutbum_6]

I retired at 59 with 4mil and m still doing well at 82.

 

[Inside Out]

The only way to answer this question is to know your expenses. If you know your expenses you can work backwards from there. If you spend $25,000 per year, you will only need $625,000 at 4%.

If you spend $50,000, then you'll need $1.25 million.

The old adage of "80% of your working salary" assumes you were spending most of your salary pre-retirement. That's not the case for everyone.

I've tracked my spending for 15 years and can tell you exactly how much I spend. Then add some on top for increased expenses or medical. It gives you a really good place to start to figure out the answer. Of course, investment returns and inflation will play a big part in your post retirement scenario and there are ways to deal with that, but if you are looking for a number to hit, I'd go with your predicted yearly spending times 25 (which is 4% withdrawal).

This is the correct approach.

The general conservative (but not too conservative) rule of thumb is 30 times annual expenses.

 

[Rockrivr1]

Whatever you do, don't bring up Social Security as part of your retirement. Opps! My bad......

 

[AJK129]

Whatever you do, don't bring up Social Security as part of your retirement. Opps! My bad......

What are the odds I can rely on social security for retirement when im under 30

 

[peterk123]

The stock answer is the 4% rule.

Inflation over the last couple of years has really FUBAR'd the 4% rule, though if you don't plan to be alive for another +35 years nor care to leave anything to your heirs, you can play fast-and-loose with that rule.

The majority of the people I went to school with have well north of $1MM in funds/assets, the ones I actually still talk to all feel like they're nowhere near secure in their ability to retire anytime soon -- those with kids at or below college age being the least confident.

Personally, given at least two million (over and above the value of my home), I might consider retirement a possibility.

This right here. We went with the 4% rule times two. Times two because the world is changing and I think investment returns will be much less for the rest of our lives. Times two because you need to plan for recessions and other surpises. I'm still not confident it will work because of our government. They suck.

The people who will say they make 20% a year returns are full of crap. Yup, you can make 20% but the same portfolio will lose 40% based on its risk profile.

Also look at your current spending habits. 98% of retirees are hard pressed to get below 80% of their current expenditures. That's a fact. The people who tell you they can live on $20k are also full of crap. I think the base minimum is around $60k pretax. Not sure that is doable though in New England.

I also believe with the post above that you need $2mill in income earning assets. Much less if you have a pension. A pension's value is about 2 to 2.5mil in assets.

Again, you're government is the problem. My numbers would be half what I quoted if I could trust those ass%$%% to do the right thing.

 

[peterk123]

What are the odds I can rely on social security for retirement when im under 30

That's funny . It may provide you gas money..I mean EV money.

 

[SFC13557]

I'm wondering how medicare compares to private health insurance. Anyone on Medicare have wisdom to share ?

You will need to purchase a Medicare advantage plan for your C and D and they are expensive if you don't have access to a company sponsored subsidized plan.

 

[Asaltweapon]

What are the odds I can rely on social security for retirement when im under 30

ZERO.
But if you add it into the pensions it makes the math work.

 

[paul73]

What are the odds I can rely on social security for retirement when im under 30

if you will put into your 401k at least the enough amount to get all the match your employer provides you - you will not need it.

 

[AJK129]

if you will put into your 401k at least the enough amount to get all the match your employer provides you - you will not need it.

Its still money I lose in every pay check that I know I'll most likely never see. Its a bit angering

 

[SFC13557]

if you will put into your 401k at least the enough amount to get all the match your employer provides you - you will not need it.

Yup if you have one. Most companies will match up to 5%, I was putting in almost 20% my last 5 yrs.
Don't get divorced thou because she gets 1/2.
Thanks to Dementia Joe I have lost about 30% since he's been in office and I retired at the end of 2019.
Trump was Great for my Fidelity 401K.

 

[Rockrivr1]

Yup if you have one. Most companies will match up to 5%, I was putting in almost 20% my last 5 yrs.
Don't get divorced thou because she gets 1/2.
Thanks to Dementia Joe I have lost about 30% since he's been in office and I retired at the end of 2019.
Trump was Great for my Fidelity 401K.

Ugh! I hope Fidelity at least moved you to significantly less risky plans so your hit isn't so bad.

 

[paul73]

Yup if you have one. Most companies will match up to 5%, I was putting in almost 20% my last 5 yrs.
Don't get divorced thou because she gets 1/2.
Thanks to Dementia Joe I have lost about 30% since he's been in office and I retired at the end of 2019.
Trump was Great for my Fidelity 401K.

for me it is still 20yrs+ at least before i will have to start pulling it out of there - only 50 now. so, i still have time for it to try to climb up.
529 plans for kids, yep, those are in the deepest of shits, probably will not recover - so i moved all money from the plan for oldest into the other one, for my other kid.
as i still pump annual allowed max into it - with market to recover it will gain it back, unless plan managers will proactively swap existing funds into some other ones to erase this possible recovery gain. but it is unlikely to be done now, it is not a full blown crisis yet.

 

[240Geezer]

Whatever it is it is. You'll make adjustments accordingly.