How much do you need for retirement

[richc]

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.

I know cases where that has happened. I know cases where the kids just started their new lives.

My son entered the Army after college and got some world class training and skills. He got a masters last year from Johns Hopkins and is now working on his MBA, both while working full time. My middle child got her masters while working full time. My oldest was a marketing manager at a high tech company until motherhood. None of the lasted more than a few months at home after college.

There's a lot of kids who are willing to take names and kick ass. My son's BFF's all have advanced degrees. I met a group of them at Foxwoods to play some blackjack last year. Two of them had MBA's from Kellog and Booth. One had his CPA. My son had his masters. I was by far the least education of the bunch. And these are sharp young men who are all about 30 years old. I loved chatting with them.

The MBA's were knuckleheads in college with my son. In the frat. And now they're making bank, one at a defense contractor and the other at a high end management consulting company. The CPA got his foot in the door of an accounting firm that is a watchdog for the government on classified projects. He loves his work. They all do.

There are kids who have their eye on the prize. And, yes, I agree there are those that want everything handed to them.

It's just what the young folks want to do with their lives. The opportunities are out there.

 

[ddeck]

This is the correct approach.

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

Which is a 3.3% rule. That's definitely more conservative.

 

[ddeck]

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.

There's been some discussion on this since the most vulnerable time for losses is at the very beginning of retirement. If you have to withdraw when prices are low to pay current bills, you will be forever damaged and it greatly reduces the likelihood of you making it through retirement.

I've advocated for 5 years worth of cash with the rest in equities if you can afford it. The 5 years ensures that you never have to take money out in the beginning even if the prices drop dramatically in those first 5 years. It essentially gives you a cushion to absorb any shocks in that most vulnerable period. If in year 2 prices crater, you simply pull out the money from cash and don't replace it...having 4 years of cash now. If the market recovers 2 years from that, then you can start withdrawing to get back to the 5 year cushion. The key is to never have to sell when prices are really low.

 

[ReggieB9mm]

If you like to read:
Amazon product ASIN B08N6XLDR9View: https://www.amazon.com/Were-Talking-Millions-Supercharge-Retirement-ebook/dp/B08N6XLDR9


Keep in mind, that where you live will have a significant impact on how much money you get to keep. Different states tax different types of income, distributions and Social Security differently.

 

[SFC13557]

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

Yes, after I retired and just when Covid hit I met with them and "adjusted" my investments, but I've taken a HUGE hit.
I was 64 1/2 when I retired and waited until 66 and 2 months to claim SS so I was taking a small monthly stipend until then.
I have a Pension from MIT (1/2 what it would have been without divorce) and small Army pension so I'm not taping the 401K now.
As of Friday, I've "lost" about 75K which infuriates me and which I blame on our leftist enemies.
I'm a motivated MFer in the War against the Left, they cost me lots of money.

 

[peterk123]

If you like to read:
Amazon product ASIN B08N6XLDR9View: https://www.amazon.com/Were-Talking-Millions-Supercharge-Retirement-ebook/dp/B08N6XLDR9


Keep in mind, that where you live will have a significant impact on how much money you get to keep. Different states tax different types of income, distributions and Social Security differently.

Taxes can play a huge role. And expect the percentage of your income that gets taxed 30 years from now will be much higher.

Taxes are driving my personal strategy. I'm actually planning to reduce my income within the next two years so I'm in the lowest tax bracket possible, while still enjoying a comfortable life. Plus lower income gets you under the radar of the man.

 

[1776]

You will need a lot !!!

 

[KMM696]

Will will need a lot !!!
View attachment 686288

Using the usual shortcut math, you're going to need 4 retirements, plus one extra to actually live on, you know, after.

Call us when the party starts!!

 

[67ray]

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

Don't you have to enroll in Medicare when you are 65? No choice.

 

[67ray]

Three things I know:

1. The Fidelitys and the Vanguards will always provide calculators saying you need $10-11,000 per month in retirement. I'm like I don't spend that now why would I need it in retirement? Then I realized they make money by having my accounts under their management - that is not aligned with my interests.

2. Your spend will be higher in the first years of retirement than later years. 60s, 70s you are traveling and doing things and 80s not as much. So you need less the older you get.

3. Similar advice already given, the thinking to switch over all money to cash at retirement is really stupid because you lose out out the market gains throughout your retirement which could be 20 years or more. Keep a few years worth in cash, and then let the rest grow. If the market is down you still only need your monthly nut so large percentage of your retirement is still in the market and ready to grow and grow. Most downturns only last a few years and we can wait it out.

 

[Hailstorm]

If the government keep sit up. I won't be around. I am sure I will die of lead poisoning. Thankfully, I should fall in a pile of hot brass

 

[jkelly1229]

I know cases where that has happened. I know cases where the kids just started their new lives.

My son entered the Army after college and got some world class training and skills. He got a masters last year from Johns Hopkins and is now working on his MBA, both while working full time. My middle child got her masters while working full time. My oldest was a marketing manager at a high tech company until motherhood. None of the lasted more than a few months at home after college.

There's a lot of kids who are willing to take names and kick ass. My son's BFF's all have advanced degrees. I met a group of them at Foxwoods to play some blackjack last year. Two of them had MBA's from Kellog and Booth. One had his CPA. My son had his masters. I was by far the least education of the bunch. And these are sharp young men who are all about 30 years old. I loved chatting with them.

The MBA's were knuckleheads in college with my son. In the frat. And now they're making bank, one at a defense contractor and the other at a high end management consulting company. The CPA got his foot in the door of an accounting firm that is a watchdog for the government on classified projects. He loves his work. They all do.

There are kids who have their eye on the prize. And, yes, I agree there are those that want everything handed to them.

It's just what the young folks want to do with their lives. The opportunities are out there.

This is true.. I'm not nearly that educated but 34 team leader for it at a major corporation and my boss says 2-3 years regional role if i don't screw up

You got to want it

 

[PeterC]

Don't you have to enroll in Medicare when you are 65? No choice.

Not if you're currently covered by a employer (companies with greater than 20 or 50 ? employees) sponsored medical plan.

 

[ReggieB9mm]

Not if you're currently covered by a employer (companies with greater than 20 or 50 ? employees) sponsored medical plan.

And the way Medicare works, it’s worth creating a company just so you do not have to enroll in medicare. That company can exist for 7 years without making a profit, then you make another one. IANAL or a CPA
edit: left out a word

 

[moojpg2]

I'm 34, my house is long since been paid for, I haven't had a single penny of debt since I was about 25 or 26. I plan on retiring early, maybe around 50-52yrs old. I will teach my kids to stand on their own feet and make them understand that they need to make it their life's single goal to gtfo of my house and survive on their own once they are 18, I will not pay for their college or worry about what they'll inherit if I die. I also will not work myself into a hole in the ground at 65+ yrs old like my mom and dad did saving up for a retirement I'll never get to see, god bless them.

Most men make all these big retirement plans and are dead within 1-3 yrs of retiring. So many of them diagnosed with cancer or heart disease or early dimentia in the middle of the "oh I just need to work another 1 or 2yrs" stage. I've seen it happen to so many guys, including my father, my retirement plan is to remain debt free, stack as much money as possible to be able to stop chasing the $$ as young as possible and actually retire and my goal is to enjoy every minute of it while I'm healthy enough to do it. When I get old and become terminally ill or die I want to do it with nothing but my last penny in my pocket, debt up to my neck, and not a dollar of equity left in my house and the roof and walls about to collapse from neglect. f*** the 4% rule.

 

[JRLB]

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.

Two doll hairs.

 

[smokey-seven]

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

Medicare is 3 parts. Med A, Med B and Med C-D or a private Medicare supplement plan.

From what I gather, medicare covers everything and is dirt cheap.

Untrue. Medicare part A only, leaves 20% of you med bills to you to pay. Part B helps but still leaves you to pay for meds and deductibles.

Zero mortgages/car notes/loans

If you have a relatively new vehicle, you better start budgeting for a replacement inside of 10 years. The lack of mortgage payment is still needed to repair/replace home pieces and parts. A new refrigerator is not cheap these days and they are short lived. Washer/drier, dishwasher, normal plumbing repairs and don't forget a new roof now and then. Got it ll under control? Get ready for the surprise heating system failure and the next big ticket item you are not ready for.

 

[rosco61]

Get a financial advisor and a good one.

 

[BTSDOG]

Enough to keep the Mrs. happy........

 

[1776]

I'm looking into increasing my retirement Omega-9 diet with these products

Photos | Everol

teameverol.com

I might be partial to sizable green dolphin

 

[Mark from MA]

How much you need for retirement depends on how long you live, and how much you spend.

They always say....do you want to keep your style of living......and my answer is......yes....but I don't spend a lot now....so what's the big deal?

Financial companies and even financial advisors will always say you need an assload more than you really do...why...because they make money off of your money. And, you can't be unhappy with their performance having more than enough money if the market takes a shit. So by throwing tons of money in there, you not only make their life easier, your making them money. And that money could be used in your lifetime to fund your happiness.

That said, if your a spender, don't have your mortgage and cars paid, or live in a high cost area.......you'll need money.

A lot of people forget that if they are funding retirement to the tune of 15-20% like I am....they are living on 15-20% less. After you retire, you no longer really should fund retirement. So take a look at what you really live on. I also save a buttload of money working. If you have savings built up....there's no need to save anymore either.

So again.....take a look at what you really live on and be conservative to figure in for any needed projects on your house, or large expenses. The large expenses are the killers that are tough to recover from depending on what income stream you have.

Take a look at your bucket list and travel plans.......

Do you support your kids still?

Can you move to a cheaper, lower tax area?

Lot of ways to make your cost of living cheaper........and most people can adapt if they've saved a good amount.

 

[Rockrivr1]

Been contemplating this for a bit now but reading this post I decided to up my 401k another percentage points. Every bit helps.

 

[Mark from MA]

Medicare is 3 parts. Med A, Med B and Med C-D or a private Medicare supplement plan.

Untrue. Medicare part A only, leaves 20% of you med bills to you to pay. Part B helps but still leaves you to pay for meds and deductibles.

If you have a relatively new vehicle, you better start budgeting for a replacement inside of 10 years. The lack of mortgage payment is still needed to repair/replace home pieces and parts. A new refrigerator is not cheap these days and they are short lived. Washer/drier, dishwasher, normal plumbing repairs and don't forget a new roof now and then. Got it ll under control? Get ready for the surprise heating system failure and the next big ticket item you are not ready for.

Having like 100K or more stashed aside in something like a Roth is good to have for vehicle and house projects. I think that is a minimum need when retiring. Leave it there don't touch it. When you need bigger amounts of cash.....then you can take it out tax free.

Its one of the goals Im working on now. We've not funded our Roth as much because of kids college and a wedding. Now its time to catch up. In fact, I almost think I should be putting in less for 401k and funding my Roth to my tax detriment. Because at least if I pay the taxes now...they are paid.

 

[1776]

How many wealthy wife options are there to choose from

 

[Junior314]

Having like 100K or more stashed aside in something like a Roth is good to have for vehicle and house projects. I think that is a minimum need when retiring. Leave it there don't touch it. When you need bigger amounts of cash.....then you can take it out tax free.

Its one of the goals Im working on now. We've not funded our Roth as much because of kids college and a wedding. Now its time to catch up. In fact, I almost think I should be putting in less for 401k and funding my Roth to my tax detriment. Because at least if I pay the taxes now...they are paid.

Your 401k doesn’t have a Roth option?

 

[TLB]

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

You'll see it. DC pols are corrupt weasels, but they ain't that stupid. It's no substitute for retirement plans or savings though.

 

[CoastieRon]

Medicare is 3 parts. Med A, Med B and Med C-D or a private Medicare supplement plan.

Untrue. Medicare part A only, leaves 20% of you med bills to you to pay. Part B helps but still leaves you to pay for meds and deductibles.

If you have a relatively new vehicle, you better start budgeting for a replacement inside of 10 years. The lack of mortgage payment is still needed to repair/replace home pieces and parts. A new refrigerator is not cheap these days and they are short lived. Washer/drier, dishwasher, normal plumbing repairs and don't forget a new roof now and then. Got it ll under control? Get ready for the surprise heating system failure and the next big ticket item you are not ready for.

We have over a year's worth of my salary saved for emergencies.....

 

[bejay]

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).

 

[TLB]

Taxes can play a huge role. And expect the percentage of your income that gets taxed 30 years from now will be much higher.

Taxes are driving my personal strategy. I'm actually planning to reduce my income within the next two years so I'm in the lowest tax bracket possible, while still enjoying a comfortable life. Plus lower income gets you under the radar of the man.

Good point. It is nice to have some significant portion of your worth in post tax assets, so huge RMDs don't sacrifice you to the tax man.

 

[bejay]

Fidelity handled my company’s retirement plan and handles the pensions.
They have a good retirement planning tool. It allows you to enter SS, pensions and other income. Asks monthly expenses (you can add great detail), insurance (medical, home, auto, etc), pharmacy costs, home expenses, “fun” expenses (dining, vacations, etc.), child care, etc…
For incomes, you can pick the type of market (average, above/below average), input length of payout (estimated end of life).

Not pushing Fidelity, but just letting you know of another tool.