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Started By
Message
re: Yes, another retirement thread - RE: How much you need to retire
Posted on 10/6/12 at 4:43 am to blueridgeTiger
Posted on 10/6/12 at 4:43 am to blueridgeTiger
quote:
I've heard that to maintain your lifestyle you need an income of about 80% of your pre-retirement income.
Not enough. I was forced into retirement and I know.
Health insurance is eatting my arse up. 
0
Posted on 10/6/12 at 11:51 am to UncleLogger
I think people are considering how much you would need if you strictly wanted to live off the interest and never touch the principal.
As for the 8x salary in the OP, I don't think that is too far fetched. By the time you take out taxes, investments, mortgage payment, term life insurance, etc; a person making 100K is only living on about 50K per year, or less. So to retire with 800K in the bank when you only need 50K to maintain your current lifestyle, that seems reasonable. Even if you didn't collect one dime of interest, that would last you 16 years. Ideally you would like more, but 8x seems like a good minimum goal.
As for the 8x salary in the OP, I don't think that is too far fetched. By the time you take out taxes, investments, mortgage payment, term life insurance, etc; a person making 100K is only living on about 50K per year, or less. So to retire with 800K in the bank when you only need 50K to maintain your current lifestyle, that seems reasonable. Even if you didn't collect one dime of interest, that would last you 16 years. Ideally you would like more, but 8x seems like a good minimum goal.
Posted on 10/7/12 at 1:20 pm to Lou
It gets down to whether someone has income streams in addition to retirement savings. Even with an unencumbered home and no car payments, and disregarding money put into investments/savings, travel, employer/employee insurance contributions, etc our two person household pushes close to $5k/month and we are not big spenders although my wife spends significantly more than I.
Having a pension, employer sponsored health insurance in retirment, and/or SS income greatly reduces the number for retirement savings. If someone was very healthy and expecting a lengthy retirement, was budget minded and had low cost investments, plus other income I would still estimate $2M+ in current dollars saved. you would then have to worry about sequence of returns at/post-retirement, how much is held in taxable accounts, Roth, and TIRA/401k and future tax burden as well. Spending still begins to tail off appreciatively in mid-to-late 70's as people travel less, deal with health declines, etc. You have to make it to 80 to worry about the rest, and a shite ton of people don't.
High quality retirement isn't only about having the capacity to have a large amount of disposable income, being healthy enough to do what people enjoy is #1.
Extracting the zeroes, ie the people with no retirement savings whatsoever, there are only ~ 50% of people in their early 50's in retirement plans that currently have $100k saved, it's pretty pathetic.
Having a pension, employer sponsored health insurance in retirment, and/or SS income greatly reduces the number for retirement savings. If someone was very healthy and expecting a lengthy retirement, was budget minded and had low cost investments, plus other income I would still estimate $2M+ in current dollars saved. you would then have to worry about sequence of returns at/post-retirement, how much is held in taxable accounts, Roth, and TIRA/401k and future tax burden as well. Spending still begins to tail off appreciatively in mid-to-late 70's as people travel less, deal with health declines, etc. You have to make it to 80 to worry about the rest, and a shite ton of people don't.
High quality retirement isn't only about having the capacity to have a large amount of disposable income, being healthy enough to do what people enjoy is #1.
Extracting the zeroes, ie the people with no retirement savings whatsoever, there are only ~ 50% of people in their early 50's in retirement plans that currently have $100k saved, it's pretty pathetic.
Posted on 10/8/12 at 1:54 pm to UncleLogger
quote:
What the hell are you people saying $3,000,000 going to do with all that money when you retire? That seems like overkill. Assuming you'll own your home and not have any kids leaching off of you, that's a hell of a lot of cash to spend.
I know people who came out of retirement because healthcare costs were murdering them a few thousand dollars a month at a time
Posted on 10/8/12 at 1:58 pm to Lou
quote:
As for the 8x salary in the OP, I don't think that is too far fetched. By the time you take out taxes, investments, mortgage payment, term life insurance, etc; a person making 100K is only living on about 50K per year, or less. So to retire with 800K in the bank when you only need 50K to maintain your current lifestyle, that seems reasonable.
Dude
Inflation
What is 50K going to be worth in 30 years?
It takes 119K of 2012 dollars to match 50K from 1982.
If inflation over the next 30 years is similar you're looking at having to live on 120K a year. Not 50.
Posted on 10/8/12 at 3:46 pm to Powerman
quote:
If inflation over the next 30 years is similar you're looking at having to live on 120K a year. Not 50.
Scary. As. Hell.
Posted on 10/8/12 at 3:51 pm to Powerman
quote:
Dude
Inflation
What is 50K going to be worth in 30 years?
It takes 119K of 2012 dollars to match 50K from 1982.
If inflation over the next 30 years is similar you're looking at having to live on 120K a year. Not 50.
a lot of people on defined pension plans don't realize this, you get to retire at 100% of your salary at 30 years. Then 25 years later you're 70 and that 100% isn't looking so hot
Posted on 10/8/12 at 9:34 pm to yellowfin
re: inflation
rule of thumb: I always heard that prices double every 20 years. $50,000 in eggs/milk/bread today will cost $100,000 in 20 years.
rule of thumb: I always heard that prices double every 20 years. $50,000 in eggs/milk/bread today will cost $100,000 in 20 years.
Posted on 10/8/12 at 10:15 pm to Hand
quote:
eople with finance and accounting backgrounds that refused to participate in company sponsored or individual retirement programs.
Why not just do both??
I have a 401K, roth, and a fun money account.. I guess thats why I dont think i bring home much cause it all goes to those..
Posted on 10/9/12 at 8:01 am to Powerman
quick question:
I currently have $21,200 in my 401K and an contributing 10% with a company match of 5%. I make $85,000 a year. Will this be enough to retire on by 65? I plan on doing other retirement funds but am just curious. I am 28 BTW
I currently have $21,200 in my 401K and an contributing 10% with a company match of 5%. I make $85,000 a year. Will this be enough to retire on by 65? I plan on doing other retirement funds but am just curious. I am 28 BTW
Posted on 10/9/12 at 8:21 am to trident
quote:
I currently have $21,200 in my 401K and an contributing 10% with a company match of 5%. I make $85,000 a year. Will this be enough to retire on by 65? I plan on doing other retirement funds but am just curious. I am 28 BTW
My guess would be yes. It depends on several factors such as rate of return, inflation, amount of debt at retirement (home mortgage paid off?), and life style. I would bump my contribution up at least 1% every time you get a raise. You will never miss it.
Posted on 10/9/12 at 8:27 am to PlanoPrivateer
quote:
I would bump my contribution up at least 1% every time you get a raise
I can only max out at 15%, but I will get there before 30
Posted on 10/9/12 at 12:42 pm to trident
quote:
I can only max out at 15%, but I will get there before 30
If you increase the contribution by 1% every time you get a raise that will be 5 raises based on going from 10% contribution to a 15% contribution. Let’s assume each raise is 5%. That means your $85,000 salary has grown to $108,000. You are now contributing 15% of $108,000 or $16,200 and your company is contributing 5% of $108,000 or $5,400 for a total contribution of $21,600 for that last year. That’s vs. $12,750 that is being contributed this year. Of course, you can rework the numbers using a percentage raise different than 5%.
If you do max out, then start a Roth IRA. If you also max that out spend the rest on wine, women, and song.
Posted on 10/10/12 at 1:12 am to trident
quote:
I currently have $21,200 in my 401K and an contributing 10% with a company match of 5%. I make $85,000 a year. Will this be enough to retire on by 65? I plan on doing other retirement funds but am just curious. I am 28 BTW
Assuming a constant salary and consistent annualized 5% ROI through age 65 you'd have a little short of 1.5 million dollars.
Posted on 10/10/12 at 6:45 am to Dead Mike
quote:
Assuming a constant salary and consistent annualized 5% ROI through age 65 you'd have a little short of 1.5 million dollars
can the wife and i live off of that?
I really dont know
Posted on 10/10/12 at 9:56 am to trident
No one can tell you that, but I personally wouldn't feel comfortable with 1.5M when you retire.(35-40 years).
However, if properly invested, I think you'll do better than 5%.
However, if properly invested, I think you'll do better than 5%.
Posted on 10/10/12 at 10:32 am to trident
quote:
quick question: I currently have $21,200 in my 401K and an contributing 10% with a company match of 5%. I make $85,000 a year. Will this be enough to retire on by 65? I plan on doing other retirement funds but am just curious. I am 28 BTW
Do you have a Roth or anything that won't be taxable at retirement? Reason I ask, is that contributing that extra 5% to the 401(k) is just loading you up with taxable retirement dollars. Now, if the deduction is more important right now, forget I said anything
Posted on 10/10/12 at 10:37 am to GoCrazyAuburn
quote:
GoCrazyAuburn
You're needed in the life insurance thread.
Posted on 10/10/12 at 10:38 am to TheHiddenFlask
I saw. I'll be in there this afternoon, when I am not on my phone. 
Posted on 10/10/12 at 11:06 am to GoCrazyAuburn
You can probably just copy and paste your other posts.
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