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Married - retirement
Posted on 10/26/19 at 3:53 pm
Posted on 10/26/19 at 3:53 pm
This is not for an evaluation of our standing. We are both mid 30s, each have 401k's and an ira, totaling 490k. Also outright own 180k in property. Have 100k equity in our house. These are unrelated properties (not owned land with a constructed home).
I feel we are on the right course for 35 year olds... my question is what should we have, combine, in retirement accounts for retirement. Everything I see is single source income, meaning drawing from 1-401k and is not really clear if they are for married, dual income couples. Since we would not have duplicated common expenses (ex, mortgage, if we have one in retirement... we should not), I feel, maybe incorrectly, that we do not 2x what the "calculators" are saying.
Any input?
I feel we are on the right course for 35 year olds... my question is what should we have, combine, in retirement accounts for retirement. Everything I see is single source income, meaning drawing from 1-401k and is not really clear if they are for married, dual income couples. Since we would not have duplicated common expenses (ex, mortgage, if we have one in retirement... we should not), I feel, maybe incorrectly, that we do not 2x what the "calculators" are saying.
Any input?
6
Posted on 10/26/19 at 4:39 pm to littlePNdaB
At 35 you should have 1.8x income saved for retirement.
At 45, 3-4x.
At 45, 3-4x.
Posted on 10/26/19 at 5:29 pm to littlePNdaB
quote:
my question is what should we have, combine, in retirement accounts for retirement.
For a Boglehead retirement you need 28x expenses at 65 to retire with a horizon of 30 years.
Posted on 10/26/19 at 6:00 pm to littlePNdaB
My input: you and your spouse are not both guaranteed a long life. So you can’t assume that you’ll have the other person’s contributions for the next 30 years to bolster your own. If you both save as individuals would, you’ll be in great shape even with the loss of the other income.
Or consider divorce: if you’re not saving fully, your retirement may be cut in half should the marriage dissolve.
Or consider divorce: if you’re not saving fully, your retirement may be cut in half should the marriage dissolve.
Posted on 10/27/19 at 2:46 pm to littlePNdaB
American Funds has a pretty comprehensive tool to use for dual earners. It's been helpful for me trying to quantify my wife's pension and two pre-tax accounts. It even allows me to speculate on taxable investing increasing for say when nanny's time is done with us.
LINK
LINK
Posted on 10/28/19 at 8:17 am to littlePNdaB
You first need to decide at what age you want to retire. Then, you need to decide what lifestyle and budget you want to have in retirement.
Everything after that is fairly easy to calculate/determine.
Everything after that is fairly easy to calculate/determine.
Posted on 10/28/19 at 8:55 am to littlePNdaB
quote:
We are both mid 30s, each have 401k's and an ira, totaling 490k.
For our purposes here, I'm ignoring any asset or equity that is not going to generate income. Using an expense based model or an earnings based model is merely picking your poison. If you focus on replacing 100% of your pre-retirement income, most folks are going to work until they die. Focusing on projected lower expenses in retirement (house paid off, slower lifestyle) often ignores either increased healthcare expenses, increased spending commensurate to available leisure time (either hobbies, travel, etc., all of that gets expensive quickly), inflation or all of them.
As a matter of caution, I would not do a married analysis. There are two of you - that's two vehicles, two healthcare expenses, a whole range of things. The one thing that you really combine on is the home, utilities, etc., which I'm not dismissing. So, if it makes you feel better, do the analysis separately, but halve (or pro-rate) the housing expenses in each analysis.
I still like a target of % of pre-retirement income versus expenses because the former is aspirational and the latter feels more subsistence level to me.
Ideally, I will make more from 70 to 90 than I do between now and 70. Might not get there, but that's a better target for me than trying to predict how little I can get by with in a, perhaps, earlier retirement and then be stuck with that forever.
Back to your original question - if it was me and you are targeting, say, 60 in retirement (you're in better shape than I was at 35, that's for damned sure), I would get as close to 100% of pre-retirement income, adjusted for inflation, as I could. If that is 25x your income, so be it.
This post was edited on 10/28/19 at 8:56 am
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