How much $ do you need for retirement

If it is just you at this point, a million should be enough. From your post I can tell you don't have a financial planner. You "probably" have about a million dollars saved? You don't know? My financial planner used how much I had saved, future income, and projected expenses and input these numbers into an application which then told me how long my savings plus income could last. I retired at 62 and with conservative investments, I'll be solvent and still live comfortably for the next 62. Find a Financial Planner (do a little research first) that you like and understands your needs (rather than selling you investment opportunities).

I have just under $500,000 for my retirement, started collecting Social Security at age 62, and I'll be 64 soon. I retired at 56. I have a new 30 year mortgage (consolidating 3 debts to one mortgage payment, at a lower interest rate, that will save me about $180.00 monthly. I cover all my basic needs, just got rid of a huge credit card debt (paid off in 5 years with credit counseling). Other than my mortgage and monthly bills, my debt is in order. I'm basically a homebody, so going out has never been a big thing for me. I do go out, but watch my money.. but I still have fun and treat myself. I plan to travel more.. but will wait until next year. I did go to Paris back in 2012. I feel comfortable enough and not too strapped now. Of course, more money would be nice. I am not working to supplement my living expenses. I just have to be careful, hope my health stays good... be frugal for the most part. OP, it sounds like you're in a very good position for your retirement.. depending on your lifestyle, and what you plan to do.

I also live in NJ.. not a cheap state for retirement.

Depends on where you live, OP.

Seems like all the advisors say at least $1.5 million. And that’s for an “average” person. Not sure how anyone ever saves that. It’s also totally dependent on lifestyle and life expectancy. $1 million in Des Moines vs $1 million in NYC are totally different things.

I assume I will have to cut back my life dramatically in retirement. I’ve slowly stripped away all excess from my life - but still probably spend more than I can afford in retirement. I am sick of working at 52 and have $1.1 million. I would rather quit in next 2 years and kill myself at 75 then keep working another 13 years (during which I may die). My father died at 63 having worked his ass off all his life and looking forward to retirement. I refuse to die without ever having enjoyed life.

I'm anxious around this question as well. At 54, I have about $1.1 million in savings and 401ks, plus enough money in a joint account with my husband (and in equity in our current house) to buy a $600,000 retirement house without a mortgage. When my mom eventually passes (hopefully a long while from now), I should inherit a few hundred thousand more. I'd like to work until roughly 59, then take a step back and just tend bar or do some other stress free job. But I think it will be hard to quit no matter how much i have, as i'll worry that whatever I have isn't enough.

Agree R6. I’ve worried about “having enough” my whole life. The reality is something could happen to wipe me out at any time. As a worrier, retirement is the ultimate anxiety. Trying to learn to live with the unknown. With that said, you have plenty - $1.7 million is more than comfortable. Not sure why you feel a need to put $600,000 into a house when retiring though. My plan is to sell my house to free up $400,000 to fund my retirement. With that $, I can rent an apartment for under $2,000 month for 16 years.

I thought I had enough at 1.5 million at 58, and plan to work until 62 or 64. But reading this, not so sure. It will have to cover myself and my partner, who has no money. Plus no inheritance or anything. At least I like my work as a freelancer and can probably keep bringing in some money.

The issue for most of us is how long we are going to live. Certainly 1 million is plenty if you retire at 65 and die at 75, as the statisticians expect. However, it's quite possible that many of us will live into our 90s, and a surprising number into our 100s. Given advances in medical technology, some of us may make it to 110. So that million that would be plenty for ten years is not going to enough for 40.

Which is why I expect to make absolutely sure I don't live to be 100. Not even sure I will allow myself to get to 90.

My only chance is my parents will die in time for me to retire. They'll leave me about half a mill.

"Not sure why you feel a need to put $600,000 into a house when retiring though. "

My partner. He has a taste for the finer things, and i just know he's going to want to spend that much (if not more).

I'm worried, too, and have been playing catch up as much as I can. I changed jobs recently and have to wait for about 2 years before I can get the company match on my 401k, but I actually had a windfall and that covered what I'll be missing for those two years.

I should have enough when I retire, but I'm still worried. My house will be paid off. I plan to work until 70 since I like what I do, and I may even work longer if I can transition into another potential career for say another 5 years. Longevity runs in my family. Even the unhealthy ones are in their mid-70s and still going strong. I'll likely live until my 90s unless I have an unexpected health crisis.

Provided it pans out, and so far it's going great, the job I'm in will lead to a huge increase in salary in the next 2-3 years. I'm just going to keep living on my salary from about 5 years ago and stash away as much as I can. I'm hoping to have north of $4 million when I retire.

R12, you're doing amazing well. If you have $4 million at retirement, you could more than pay for a very nice assisted living facility (if you need that) plus health care for life and never even touch the principal.

Father - and 4 of his siblings - died before 65. Mother and 4 of her siblings have lived until 85 - so far. I’m betting on 75- and will have to OD if I go much longer. But ain’t no way I’m working this miserable job until I die at 63. I’d rather take the risk I’ll run out of money at 75 than die at 63 hating every day of my life that I have to work for the next 10 years.

I actually pity some of you guys. The amount of anxiety you live with about the future (while clearly having more than enough) can't make today much fun. Keep your millions.

Seriously, r15. They're millionnaires with houses paid off and they worry about... what ? Not having enough to eat ? I don't understand it.

R15 My father is one of these "I'm a millionaire" types -- earned it from nothing which is something he should absolutely be proud of given my grandparents were uneducated country hicks. BUT he obsesses over every penny. Always has. No way is he ever going to spend it all in his lifetime so most of it will go to my brother and I.

That being said, there is a sadness about him from saving so much for an entire lifetime that he forfeited for the sake of being a millionaire one day. He finally sees having a million at 70 is not all its cracked up to be and it certainly won't be nearly enough to turn back time.

In some ways, I think he resents me for living life more fully rather than to be a "millionaire". Don't get me wrong, I'm quite financially responsible and will likely be a millionaire myself. That being said, the humblebrag of that isn't enough to make up for all the lost experiences I never had growing up or that I can't have with my father because he's only known saving and never really living.

Point is: you can't take it with you.

Good points R15-17 . Having been in therapy about this topic, I know a lot of the worry is the result of general anxiety and a genetic predisposition towards worry. I try to be zen about it - but being constantly bombarded with messages about the “retirement crisis” in America, it can be hard to not fear being old and broke. It happened to my mother but fortunately she has kids. And it seems like everyone I know has an inheritance coming to them - I have only the debts of caring for my aging mother.

If you live in an area that has a lower cost of living you should be able to live like a king. If you live in a very expensive city/metro, you in trouble girl.

As I near retirement, I'm looking to downsize and simplify my life, not have a $600,000 house tied around my neck (as someone mentioned) taking up my time with upkeep. I want to travel, read, watch nature, do art, see art, movies, theater.....not doing chores or worrying about a new roof.

I plan to live in my <$1,000 rent stabilized studio apartment until I die. Plus $1,000 month for health care and $1,500 for food, utilities and entertainment. So $50,000 year for 20 years = $1 million. Crazy that living a very basic existence with little cushion for emergencies or long term care requires $1 million.

1500 a month on food?

I spend maybe 150 now.

As long as my house is paid off before I retire I’ll be good.

I think the $1500 was for food.. plus utilities and entertainment, from what I read.

Entertainment = Hustlers

$150 a month for food? Come on - no you don’t. Unless you eat ramen or spam for dinner every night. $500 if you eat at home every night and eat some kind of protein regularly.

Utilities could be $400 month - $150 for water, electric and gas, $125 for cable, internet, $125 for cell phone. Car insurance and gas $200, leaves $400 of mad money for drinks, movie, 1-2 dinners out, day trip to the casinos.

I average about $100.00 a week for food.

My utilities have never gotten to $400. The most in the summer running the AC is $120. No cable. My cell and internet are combined and is $70 a month. My car is paid for and insurance is $500 every six months. Gas maybe $ 80 a month . I have a short commute. Grocery bill is less than $150 a month.

You need minimum of three million in "potential" liquid cash. That would not include housing. That is if you have a solid social support, like children, spouse or reliable friends. Without "solid" support to back you, you need at least eight million, because you will have to purchase this support in forms of short term nursing home stays, taxi rides, and paid day to day help.

R27.. Wow, how do you do a grocery bill of $150.00 a month? You must use coupons?

Lol -ok R28. This is why people stress about never having enough. Less than 5% of America could ever or will ever have that much. So back to reality. $1 million is enough for most people - there will always be emergencies and everyone is at risk of being broke and homeless at some point. But the idea one shpuld work until they have $4 million is the kind of Wal St BS that makes people throw up their hands and give up rather than working towards a relaxation goal.

^realistic goal

R15 you are clearly too young to understand. One million dollars at age 65 may sound good but it's not enough to maintain the lifestyle most of us had while making money. This means having to cut back on nearly everything -- which can be done but it needs planning and foresight. Worrying about having enough to live on is not neurotic. Call us back when you reach this age.

I totally agree R30. People stress themselves out unnecessarily. The truth: living is expensive, but the reality is that, if you’te frugal, you will need a lot less than you may think. Yes $1.5m is a great goal to shoot for, but $1m is fine, and even 500k supplemented with social security is manageable. Mostly likely you will die and leave hundreds of thousands that you unnecessarily suffered to earn.

To the worried anxiety-ridden millionaires, I offer a tiny violin of sympathy.

When I first retired, and my debt was paid off (but not my home, still have mortgage payments).. I was surprised at how doable my new monthly payments were. My new payments were half of what I earned, when I worked. I didn't have to commute 1.5 hours daily, cutting gas expense and wear and tear of my car.. for example. My needs were less, and I was still comfortable, taking care of the usual monthly expenses.

I don't want to spend 30 years of retirement waiting to die in my home. I think you need at least $5 million if you plan on actually living: travel, going out to the theater, events, dinners, etc.

[quote]You need minimum of three million in "potential" liquid cash... Without "solid" support to back you, you need at least eight million

Thanks for the laugh, R28. Did you get a little stiffie typing that “I’m rich” bullshit? Bless.

Financial advice provided by queens teetering on the A List (oh the horror: more botox for that furrowed brow, lest we fall!) , is always a comedy.

R36 Fair enough, but I think as you get older your energy levels and desire to deal with other people decline drastically. Virtually every senior I know would just as much live a simple, low-key life that revolves around the home more often than not. With technology these days, you can basically get 90% of things done from the comfort of your living room.

Socking away $5 million today to think I could be living a 20s, 30s, or even 40s lifestyle in my 70s, 80s, and 90s is one surefire way to guarantee your lazy entitled nieces and nephews are the true beneficiaries of your hard work and sacrifice.

Just waying.

The reason these financial companies tell you that you should have $2+ million to retire is because they will get rich managing the money for you. It’s a total scam.

Most of the old fart gay richies I know spend most their lives going from couch to the local cafe for a slice of quiche, or motoring to a country house. That’s about it. Their useless nephews are going to be in for a bonanza. Yeah there’s one who hired a carriage on the Orient Express for a junket for his friends recently, but he’s an acception. Most people really slow down after 70: not necessarily because of physical issues, but simply due to personal desire. They can’t be fucked.

Think about it, if you live 30 years after retirement on 50K a year you will need 1.5M. If you are a couple $3M. It's unfortunate that all the good states are expensive, isn't it? And I'm not talking about Florida.

I'm always confused by this as well. I have $2 million in my head. And I'm about halfway there at 49 years old. But I'm not working at the same level as I was before, so it may be difficult to get that second million in da bank. Most retirement calculators base their numbers on you living the exact same lifestyle as you do now, and I know I won't live the same lifestyle when I retire. We have two homes and we'll sell one, for example, and simplify. So that should help. But the whole thing is just MURKY, bitches!

[quote] if you live 30 years after retirement on 50K a year you will need 1.5M.

Depends very much on the investment. eg A lot of people buy rental property, enjoying the income, and only selling it later so they benefit from the capital growth.

The highest level of Social Security is about $30,000/year. If you live to 85, you would get about $600,000 over that period simply from social security. (Most of us will get something closer to $20,000/year, which would still add up to $400,000 over a 20 year period). So that isn't chump change in the overall mix. If you think you need $50,000/year to live a decent lifestyle , yes, you'd need investments of some sort to add up to that missing portion - which might be anywhere from $20,000 to 30,000/year. That would be approximately $600,000 in savings. But if that money has been invested, of course over time $600,000 would earn a lot more. At least double. If you live in a house without a mortgage, you can live quite comfortably on $40,000/year without any concern about paying your bills for necessities and a few luxuries. If you want to add in travel, frequent remodels, rentboys, of course your total annual income will need to be at least $60,000.

People are right, if you want to make your money last longer, you have to move away from expensive coastal cities and high income and property tax states. However, you get what you don't pay for - worse roads, schools, police, fire protection, etc. So it's all a big equation.

R33 R38 I’m with you. I have no desire to leave $1,000,000 to nephews/nieces who will not be in my life or taking care of me in old age. I want to die as close to zero as possible

R44 You're way off -- the highest SS is, at the moment, $3500 a month or about 42K a year.

$500 / month for hustlers! I want to live, I want to LIVE!

You have to think about inflation, too. 1K won't be worth the same in twenty years.

I've been planning for my retirement for several years. I sold my condo in downtown San Francisco and bought a small two bedroom cottage by the beach in southeastern Massachusetts. (not the cheapest place to live, but we've had Romneycare for a dozen years, so I'm hoping my healthcare expenses won't become prohibitively expensive.)

I've also saved $700,000 in retirement accounts and stocks & bonds and I have four rentals, netting ~$3,000 a month.

I'm 49 now and hope to retire within the next two years. A 4% safe withdrawal rate plus my rental income and a $2,000 social security benefit at 62 should last through the end of my life and allow me to pay my expenses and allow me to enjoy my early retirement.

Finally, I'm trying to live frugally. I'm done with traveling, stopped going out to bars or drinking or eating out much and have no debts other than the mortgage on my main home. I just bought solar panels and a battery for my home which means I don't pay for electricity almost 8 months out of the year.

I'd be interested in others' opinions of my plan

I only have about 14 million saved...I plan to retire in 10 years, I hope I have enough!

I’m 59. I have just shy of $4,000,000. House paid 4. Should be ok.

r8, you do have enough, unless you live in NYC or SFO or LA. And even then, you have enough if you own your home(s) outright.

R49 that sounds pretty dismal to me. I think you will have enough to go out to dinner and have a few drinks. Jeez, who says they are done with travel? Have you been everywhere?

I have 90 million saved and I'm 22 and too hawt 2b believed. Can I sit on your lap, gramps?

R53 I stopped drinking 5 years ago, but I do go out to restaurants a few times a month. I used to go out to eat several times a week, that adds up quickly.

I haven't been everywhere, but I've been everywhere I want to visit, several major European cities and a couple of dozen cities in the US; I worked for an airline for a few years and got my fill of traveling.

But my interests and pursuits are different than yours, understandable.

I'm 54 with $2.2 million in my retirement account with TIAA. I have paid into Social Security since 1988. I plan to work another 13 years. I put the maximum I can into a Roth IRA every year, but it is less than $6500 limit due to other contributions to retirement. It is worth around $80K right now. I have had $500 each month deducted from my paycheck and deposited in a plain old savings account, which earns paltry interest these days, but right now is almost $200K. It should have about $300K by the time I retire. That's going to be the fun money.

Our house will be paid off in 2029. Its "Zestimate" right now is $1.3 million, but I have no idea what real estate values will be in 2031. My daughter's college is paid for, due to my benefits from work. She just needs to be accepted -- not guaranteed at all. If not, we will use Tuition Exchange and send her elsewhere.

I never expected to live past 40, let alone 50 or retirement age. In fact, I prepaid my funeral when I was 33. So I did not have much anxiety about affording retirement. Thanks to growing up poor, I have always been thrifty. I learned early in life to buy high quality stuff, which means that I have had to save up to get some nice things. But then I use things until they break. I keep my cars 10+ years. Suits, ties, dress shirts never go out of fashion, and if you buy high quality, they can last 10-20 years with proper care.

My husband is 11 years younger than I. He has a messy past with money, which is why I manage all our funds. Now he earns 225% of my salary, and socks away maximum retirement. Barring an unexpected calamity, I think we'll be in good shape financially. Physically? That's a whole other matter.

Its enuf depending where you live.....NYC, no, Peoria, yes. You will be eligible for medicare when you retire and so you dont have to worry about huge medical bills. THe other factor is what is the money parked in?...............if its heavily skewed to stocks I wouldnt sleep so well at night. maybe

I'm 55 and have 3.5 million invested and 500K in cash, plus my apartment, a rental, and my ski condo. I think my art is worth 1 million. When my mom dies, I'll get about 10 million, but I'm giving 5 million to my brother because he put up with her all these years. I'm worried its not going to be enough.

You bitches didn't inherit anything from your parents ?

My financial advisor say I need a million and SS to last until 89. That assumes spending at the same rate I do now. The house will be paid for so that should get me into the 90s. Men in my family tend to last until mid-nineties. Not worried about how I have planned just about how the stock market will react. Of course, no SS changes the projection.

None of you have a pension?

"You need minimum of three million in "potential" liquid cash."

Only in the home of the brave and the free.

You old bitches are all 1% ers.

1/3rd of Americans have less than $5,000.

The average for all Americans just $84,821.

Add it all up and 75% of all Americans have less than 200,000.

Its unrealistic to expect the Wall street model of 1.5 million saved by retirement for every American. Most people even with college degrees don't make the kind of income to save that over a life time. And that's assumes nothing bad ever happens like a major illness, car accident, or house lost in fire or flood.

One respected fonancial adviser has stated that $350,000 in investments can see you through safely with Social Security. A tight fit but hopefully reassuring to those worrying after some ov the nonsense posts here. “ I have $10 million and cm worried it’s not going to be enough.” Yes, the thought of scratches from diving into a low Money Bin No5 must be terrifying.

You know whats going to happen to most of you bitches, you are going to die long before you planned on, scrimping, saving, living cheap in your golden years only to leave it all to some estranged relative. A friend of mine manages other peoples finance and he has story after story about this very thing. Usually living in a run down neighborhood, 20 year old car, never leaving the home, crapping in their pants then when they drop dead it turns out they had 3 million in the bank.

Thank you, R64 and R65. Looks like a few braggarts are on here.. flaunting their wealth, that most people will never have. Thanks for bringing it back to realism.. and planet Earth.

The braggarts, in reality, have only SS benefits and about $30,000 in retirement funds.

[R65] Unless you plan well, yeah. But our money's to go to a bunch of nonprofits.

Yes, I have living relatives. They're all stated to get $100 out of my will. That way they can't contest it; as I've been told if you leave an immediate relative out of your will, they can contest it. So better to leave them $1 or $100 rather than have them sue and possibly win after you're gone.

Weird that so many posters think that others here are bragging -- do not you realize this is an anonymous board? Why would someone brag anonymously -- it makes no sense. Yes, some people on this board actually do have a million dollars, but so does 90 percent of the American population, and 80 percent of those who use the Internet regularly. So if you get maybe 50 people on DL who have that much, well, that's actually below normal.

I'd settle for a crumpled twenty and a bottle of Tums.

90% of people do NOT have a million dollars. It’s only 4%. So the proportion of millionaires here is either higher than average or people are lying.

Wrong, R71

We estimate that there are 14,814,453 millionaires in the United States. Our estimate puts the millionaire net worth goal at the 88.24% wealth bracket in the US in 2016, or 11.76% of all households.

This is dedicated to people who ask why people lie on anonymous Internet forums:

Ok it’s 11% - so 1 in 10 posters should be millionaires. Not 1 in 4.

This should make people feel better. Out of all the people in the US - including dual income couples who share a household, the average person in NY or SF or LA who own houses with net value > $1 million and retirees over 65 (11% of population) less than 10% have enough for retirement. According to Wall St, we’re all screwed.

Because, R74, Datalounge is an exact replica of America?

Think again, honey.

I work in finance too and have seen where people think they have it all figured out concerning the inheritances they want to leave. I was surprised how many times a lawyer will fuck that up after they die. Never underestimate your shady relations. I always want to tell the ones fretting over their wills. You’ll be dead and never know what will happen with your money. I don’t though.

I’m with you R77 - die broke is my motto. I worked too hard for this not to enjoy every penny.

"One million dollars at age 65 may sound good but it's not enough to maintain the lifestyle most of us had while making money."

Who the hell wants the same lifestyle? I am 54 and unemployed and my life is already drastically reduced - however I am happy I have become "poor" now, because I do not want any of those old expenses anymore.

This is getting ridiculous. “You'll need at least eight million”? For fucks sake. If you plan to live til 106 I suppose.

Adding to some comments above, for most people the main financial asset they have is their home. People in the expensive coastal cities who were lucky enough to buy their homes when home prices were much lower have been boosted into the millionaire class simply by holding on to their homes and paying off their mortgages. That doesn't mean that they are going to have better retirements. Only if they sell their homes and move someplace less expensive can they capitalize on the value of their homes. That's why Oregon, Washington, Idaho, Nevada, Montana, and Arizona are filled with retirees from California. Those retirees are people who sold the 3 bedroom/2 bath houses in LA or San Diego that they bought for $30,000 in 1970, for $1.5 million dollars or higher in 2015 - they took that profit and ran, buying luxurious homes in those inland states for $250,000 and living well on the remainder.

This is a decent way to finance a retirement if you have been lucky in your choice and area of home, AND if you're not forced to sell during a real estate bust, when home prices plummet.

Home mortgages were (and are) a kind of forced savings plan - in that, every month you have to set aside that money and pay it out to the bank who holds your mortgage. You are forced to be disciplined that way.

For those who always rented because they didn't need a home or homes were too expensive in their area, self-discipline about saving and investing is the only way to accumulate retirement funds.

But luck plays a part in all of these things. A prolonged illness during one's working life is guaranteed to set one back financially.

Don’t complain about people talking about having low millions. First, consider the thread that you’re in. Of course it draws in people who are financially successful.

$1 - $3 million is not excessive these days for even average people, especially eldergays. We’re at record highs for real estate prices in many places, and in the stock market. I’m sorry if this isn’t you, but it’s not oddly excessive.

People with $5 million and more are possibly trolls, but it depends on their posts. If they are fussing about pennies, then they’re a troll.

I am 60, retired, and have about $2.4 million; split evenly between stocks and real estate. It’s not that strange.

As for “how much do you need to retire”, it really depends on a lot of factors, especially your expectations and circumstances. I kept good records and found that I averaged about $50,000 in spending per year, and I live well enough. One million dollars could easily earn $50,000 in stock market gains per year. That’s a 5% gain per year. So, OP, if you can live on that, $1 million would be your target number. Recessions with bear markets will hurt, though.

Note that in retirement, you will no longer pay FICA tax. That’s 7.25% saved on income. You also no longer need to save money. If you plan well, most of your taxes will be at 15% capital gains rate, not the 25% income tax rate. You’ll collect Social Security. But you will need to pay towards Medicare. There are other perks you’ll no longer get. So, there are a lot of factors.

I created a spreadsheet and it tells me that I can spend $100,000 per year and live perfectly well, to age 100, provided that I don’t lose much of my savings to some crazy scam or financial panic, or similar.

Does that help?

It’s perfectly normal for a middle class person who is well off to die with a lot of money socked away.

Firstly, someone learns to live a certain way. At age 50, for example, if you’ve saved money, you don’t just decide to become a spendthrift all of a sudden. You have wealth because you have good habits. You don’t just abandon those habits. It’s not like you buy a sports car and start cruising the strip, looking to pick up guys. You’d be a fool. Besides, you still have to guard against a sudden loss of much of your wealth through a fluke event.

I, for one, have to plan to live to 90-100, as my family is longed lived. I expect to die with cash in the bank, as a trade-off. It’s like buying insurance against having to live in a cardboard box at age 90 and being reduced to eating cat food. So, if I die at 80, yes, there will be cash in the bank.

I have a will, and am excited about being able to give a boost to my heirs. It’ll be like Christmas. I only wish I could be there to see it. My guess is that the people upthread who don’t understand this are either under 40, or have less than $50,000 saved, or both.

My relative is 70 and has $300,000 total savings. Rents an apartment for $700 in low-income housing on in Hawaii. Has a small pension. His health is horrible so he stays home all day. His only expenses are food, alcohol, rent and tv. He isn’t touching the $300,000. It can be done.

OP, my hunch is that your situation is such that you’ll probably be fine, but you won’t have a big cushion in case you have a setback, like an uninsured loss, losing a lawsuit, a prolonged bear market, etc. A lot of people got out of the market at exactly the wrong time in the Great Recession, and failed to get back in at the right time. That must have hurt.

Recently, I’ve been getting out of aggressive mutual funds (holding Apple, Amazon, Google, etc.) and buying more moderate mutual funds. We’re at record highs, and I anticipate a rough patch ahead when Trump is under threat of inditement or impeachment, and a bear market is overdue. I have no idea what might happen, so I’m moderating.

[quote]He isn’t touching the $300,000. It can be done.

Thank you! I'm 66, retired two years from a clerical position, and have $250K in the market (50/50 stocks and bonds) which I saved up over 15 years. I also get $2K/mo. in SS. I draw $1,500/mo from the portfolio which gives me about $3,500/mo. with SS. Not much I know, but I live in a cheap rental (everything included including cable tv) and have little debt. I've managed to travel, eat out and not alter my lifestyle too much. If you're reading this thread and thinking no way I can save up a million bucks, I'm here to tell you retirement living on a shoestring can be done.

Jesus I'm glad I don't live in the states.

R82 -- I didn't know that about FICA taxes. But am confused -- when do you stop paying them? When you turn a certain age, or when you start collecting SS? If it's the later, that might affect when I start taking payments As of now, I was thinking of holding off as long as possible.

I'm 46 and have about 400k in various investments. I can sock away another 400 in the next 10 years. Then I plan to retire from my current career and get a job at a book or record store.

Ill be getting about 200k from my mom's house when she passes on as well. My partner and I live in a roomy rent stabilized one-bedroom in a rapidly gentrifying Brooklyn neighborhood and we have NO plans on leaving until we both are pushing up daisies.

The one thing that will push us more into comfortable territory is my partner's pensions. He has 3 of them coming, including 20 years in the Department of Education as a Masters level social worker (means he gets more money). He is also investing aggressively in his TIA-CREFF. 27% of his salary in a guaranteed 7% return fund (unless Republicans really succeed in destroying all unions). We know on just that alone, we stand to be pulling in about 60k a year when he retires at 68. His pensions will be about another 60k. Plus free healthcare. We've decided to live on that and what money we make in our post-retirement jobs and keep my money as an insurance against anything crazy that might happen.

I know that sounds braggy but we are still sweating it. Remember: with inflation, having over 100k a year coming in down the road will be like 50k in today's dollars. I constantly remind myself that. All of you should too. Take what you think you're going to have and model a retirement based on 1/2 the amount of that money.

R89: [R82] -- I didn't know that about FICA taxes. But am confused -- when do you stop paying them? When you turn a certain age, or when you start collecting SS...

Hi, R89. FICA tax is actually 7.65%. I just googled it. That tax, called a “payroll tax”, only applies to income you earn from working. So, it does not apply to social security, or to profits on investments. Therefore, I f all your income is from SS and investments, you don’t pay that tax. (If you get a part time job, then you would pay the tax on that income only.)

Thanks R82!

Last I checked, a single person who expects to be long lived should put off collecting SS for as long as possible.

My brother in law, who never misses an opportunity to fuck-up financially, took SS as soon as he was eligible. I think it was when he turned 62, whatever. He knew absolutely nothing about it, but God forbid he ask me or hire a financial advisor. He might have spent 2 hours learning about it, and found that it saved him many thousands.

Anyway - don’t be like him. You can’t “un-do” your SS collection once you start, I don’t believe. So, it pays to ask a pro to advise you as to the most lucrative plan. If you expect to die at 65, sure, then start collecting at 62, but my BIL is married to my sister, and she will live to 90, easily, and will be affected by his ill-informed, rash, decision.

R93 I bet you're fun at parties.

Nice, R94. Why don’t you leave this thread, and go to the thread for people posting cocktail chatter?

R93 I plan on living long but don't know if I'll make it past this week.

I'd rather get a reduced SS payment starting at 62 then wait until 70 because I'll get an increased monthly SS payment then.

You have to live past 77 to make more total money waiting until full retirement at 67 than taking early retirement at 62 and you have to live past 82 to make more money waiting until 70 to start SS instead of starting at 62.

"...starting at 62 THAN waiting until 70..."

After 60, days, weeks and years fly like the wind. People who think they are going to have all the time in the world are in for a shock.

That’s what sucks about the US. We live miserable lives hoping for that one day we can retire and finally enjoy life. But a lot of men especially don’t last long and have sacrificed their lives for fear of dying old and broke.

[quote]That’s what sucks about the US. We live miserable lives hoping for that one day we can retire and finally enjoy life.

I think for many people the older you get the less you want to do.

People who are reasonably successful usually don’t want to quit their job. I did, in any case.

My brother had a sweet job that he loved. He was chief compliance officer for a large real estate company, part of their holdings was the properties of a major international hotel chain. He had overseas trips to Tokyo; Hong Kong; elsewhere in China; Gurnesy Island (he went there a few times but never went to the zoo!); elsewhere in Europe and all over the US. BUT - then they had a reorganization. They wanted him to stay but he took a buy-out package of some kind. He said the culture changed and it became doggie-dog cutthroat. He said he would t even go back as a contractor if they begged him. He’s going to teach Law, which he has done as an adjunct.

My point being that sometimes, you reach 60, and there’s a reorg, and the job you love where they loved you goes away, and now you have the unexpected.

Lmao r90, there aren’t record stores to get jobs at

R102, I caught that too, and thought it funny as well. Book Stores are going the same way, too.

How are Libraries doing these days?

I think that savers lose track of the fact - I know I have - that even when you retire your investments will normally continue to grow. As long as your expenses/withdrawals are proportionate, you can end up richer after retirement than before. A financial adviser showed me simulations on my own investments that indicated that when I was 90 I could actually be quite wealthy. I suppose this means I can start being a little more lavish with myself, but after all these years I'm finding that frugality is a hard habit to break. I still drive a cheap old car, am careful about eating out, and struggle with making purchases.

Jeesus ...R102 and r103 are the reason millennials get painted as complete fucking idiots. do either of you live in a major city?

here In NYC ...Brooklyn in particular ...there are most certainly record stores. A lot of them. Because people who take music seriously (which clearly you don’t) collect vinyl. New and used. That ain’t changing anytime soon.

Oy.

r104, please enjoy life and enjoy your money while you can! Buy yourself something or go on a trip with a friend.

As a reminder to everyone, when my lesbian financial advisor asked me once, “how long do you expect to live?Ithought about the five men among 125 women, at the assisted living center where she lived, and I relaxed about my money situation a bit.

Good point R107 - women should worry. I know very few men who lived to 80. My dad and his brother both died by 68. I’ll take my chances on 78. If I’m wrong it’s only a few years of misery vs. 10 more years of this stressful, miserable job that saps any joy from my life.

[quote] R88: Jesus I'm glad I don't live in the states.

I’d love to hear more!

[quote] R104: I think that savers lose track of the fact - I know I have - that even when you retire your investments will normally continue to grow.

I asserted this once on DataLounge, and someone educated me, referring to the projections that mutual fund companies publish. I held your position, and he wrote that it was baked into the published projections. He asserted that the principle will decrease to zero, using their projections. I checked, and he was right, though I still don’t know how my math is wrong.

It is scary, dipping into the principle. I retired in 2010; and, thanks Obama, I have more money today than ever.

R82 curious how much of your investments you left in stocks or mutual funds?

How is everyone's 401k doing on rate of return this year? Mine absolutely sucks. I have two accounts and both are under 2%. Ha, and Trump was supposed to be some boon for business and the stock market. My 401k did much better under Obama.

Having an active a lifestyle in retirement as you do now should look at at retired people in their late 60's-mid 70's. Chances are you will slow down and not be as active, you probably will not be traveling as much mainly due to the effects of aging which will also make you lose interest in activities outside your home. You may not need as much money as money managers tell you. If they were honest they would tell you they make big commissions managing a multimillion dollar portfolio as opposed to one worth a few hundred thousand.

OP no one can answer that for you here. All depends on your expenses and what you expect to be able to do while you are retired. I am living on what I get from SS alone which is about $1211 a month. I have about $750,000 in savings but I never touch it.

I have a 13 year old paid off home and a one year old vehicle so I am not expecting many unexpected expenses. I am a homebody and have no desire to travel. I retired at 59 and started collecting SS at 62.

My suggestion, google "retirement calculator" there are many out there and see what several of them tell you, I wouldn't reply on what anyone here says as everyone is different.

R112 -- That is pretty low but markets haven't done all that well this year. Are you doing this yourself or do you have an advisor? My portfolio is doing better but I have been more heavily invested in dividend stocks and corporate bonds, and this year that turned out to be wise. But it's a crap shoot really, and the best you can do is have a diversified portfolio, stick with mostly index funds, and consider what balance of stocks and bonds makes the most sense for your age.

R112 My Vanguard accounts are up 11+% my Fidelity accounts are up 21%. The smartest move I've made was to transfer 1/2 my retirement assets into Roth IRAs which have more than tripled in value.

No retirement thread should close without having a link to the boglehead forum.

The safe withdraw rate is 4% for a 30 year period. A financial planner could charge between 1 - 2% in fees. You could be giving 50% of your annual earnings away after working a lifetime to earn it.

Investing can and should be simple. Choose three low cost index funds or one all-in-one fund and be done with it. You will be broadly diversified and you will pay very little in fees. Don't get ripped off by a "financial planner ".

R111 & R112, I’ve made 10% this calendar year. 20% over 12 months. I was heavily invested in an aggressive high tech mutual fund (FOCPX) that has averaged 20% per year, for the last 5 years. It was a bit of a gamble. This year, I have been slowly moving to less volatile fund (FBALX) and cash, and that has lowerered my returns.

This business with Trump is uncertain. Maybe he gets ousted, and Pence comes in, and the market rallies. I don’t know, but I don’t want to lose what I already have.

R118 Turkey's economy is collapsing and will have ripple effects throughout Europe. China is on the slide. Things aren't exactly looking good at the moment. Oh and then throw in needless trade wars..

Did Trump completely cause the Turkey collapse with his needless trade wars? I know he has contributed to their instability.

The Great Depression was caused by the collapse of an Austrian bank, so you never know what might happen.

A financial advisor on TV stated you should have 10% - 20% of your last year's income saved for retirement. For example, if you made $50,000 per year, a minimum of $500,00 would be good, with $1,000,000 on the higher end.

I think the Great Depression was caused by more than one bank collapsing. For starters there was little in the way of regulations and there was a huge divide between the haves and the have nots - much like we have today.

R121, i think you mean "10 times - 20 times" rather than "10% - 20% of".

R121, one thing I don’t like about that kind of advice is that the advisor wants to lock you into a lifestyle that is similar to what you have known. I guess that’s ok, but I’m not crazy about it.

How much you need for retirement is related to expenses, not income. 25 times annual expenses is a good rule of thumb.

What surprised me most about retirement is how little I actually need to live on once housing is paid for. There is a lot to do where I live that is either free or costs very little.

R123, Thank You. Definitely 10x - 20X your yearly income.

There is an old guide that you should split your investments between bonds and stocks based on your age. In this manner: if you’re 20, put 20% in bonds, and 80% in stocks. If you’re 60, put 60% in bonds, and 40% in stocks. Bonds being theoretically safer, though performing less well than stocks.

When I was young, I rejected this idea. Why lock yourself into a poorly performing investment vehicle for your lifetime (bonds)?

Now as an eldergay, I am adopting this guide, but it has to do with imminent political instability. Since I expect to live another 30 years, possibly, I will reinvest in equities again at a later date, I think.

R112, unless all of your 401K is in Money Markets, you should be doing better than 2%. My 401K is 60% stocks, 30% bonds and 10% cash (MM's) and my return has been 10.5% or better each of the last three years. Unless you changed your asset allocation, your returns should be equal to or better than they were under Obama. Seriously, you are not keeping up with inflation so I suggest you review this carefully.

R127, if you follow the Bogleheads forum, you know that most professionals feel that "keeping your age in bonds" means you will likely outlive your assets (unless you have considerable wealth). Especially if you expect to live off your investments for 30 years. Yes, the market always goes down. But not as much as it goes up. Try some of the financial Monte Carlo simulators, which use historical market returns to gauge how your portfolio will perform by changing various factors like the ratio of stocks to bonds.

I'm not sure, and I'm sure someone will correct me.. but, you can only have a Roth IRA if you are working.. you can't convert a conventional IRA to Roth, if you're retired? Roth is a better way to go, if you can do it. You are taxed up front versus a deferred tax, that you'll be shelling out more later. I think in the long run, you pay less taxes with a Roth.

R121 that advice is dead wrong. Never target savings based on current income. Figure out your current annual spending, which should be easy enough, multiply that by 25 or 30, and there's your number.

R127 that rule is frequently revised nowadays. Take 110 less your age. The difference is what you should hold in equities. Easy-peasy.

R129, its complicated.

IIRC, yearly ROTH contributions must be from earned income. Contributions are limited or not allowed if you’re working and have a high income.

I did a “back door ROTH conversion” in 2011. I moved some 401k money into a pretax, Rollover IRA (not a taxed event). Then, I slowly transferred small amounts of money from the Rollover IRA, into my ROTH IRA account over the years. This last transfer of money was taxed at regular tax rates, but there was no IRS fine. My last transfer from my Rollover IRA to my ROTH IRA will be in 2019, I think. I actually paid no Fed Taxes last year, on this last transfer, as I did it in small tranches over the years and stayed in a low tax bracket. I’m retired and did this.

R129, as r131 said, you have to have earned income (a paycheck) to put new money into a Roth. You don't have a job in order to roll money from an IRA to a Roth IRA (you would move your 401k to an IRA then convert from the IRA to a Roth IRA)

R130, it’s best to get advice from a financial advisor. You can also read the part of the tax code that applies.

I also don’t like the 4% rule on withdrawing from your investments. I think this assumes that you will earn more than 4% on your investments. 7% is a traditional assumption on average stock market gains. So, 7% covers your 4% withdrawals, and gives a cushion against inflation, and leaves your principle unaffected, I guess.

But I don’t need to leave my principle unaffected. I likewise anticipate spending down my principle over the coming decades.

Turkey is having a debt crisis and the trade wars are just exacerbating it. Either way, Erdogan can now blame the evil US for their travails.

[quote] R122: I think the Great Depression was caused by more than one bank collapsing. For starters there was little in the way of regulations and there was a huge divide between the haves and the have nots - much like we have today

No argument that the Great Depression had many causes. As for that Austrian bank: The Credit-Anstalt had to declare bankruptcy on 11 May 1931, and it brought down other banks with it.

This is why, I understand, during the Great Recession, the Feds rescued AIG; and why even solvent financial companies, like Goldman, were required by the Feds to accept bailout money. If AIG failed, it would have created a domino effect, bringing down even the solvent entities. Besides, if the Feds only bailed-out companies that were failing, it would have stigmatized those institutions, and just added to the panic.

Wow.. it is complicated. Thank you, R131 and R132. There are so many rules to get around investing. You need a good, educated financial adviser to guide you. My 401k has been converted to a conventional IRA back in 2010, when I retired. I'm not working, so I have no new earnings. I guess my opportunity for a Roth conversion is nil (unless I have a job, then put my earnings toward a Roth), if I understand. Thanks for the info.

R137, you actually can convert money from your conventional IRA into your Roth. You will have to pay taxes on the conversion. I don’t think there is a limit on how much you can convert. (A conversion like this is different thing with different rules than is the yearly contribution topic.)

I invest with Fidelity. Although they won’t give tax or investment advice, they helped me by relating the rules, and not letting me do a conversion unless it was allowable by law. So, OP and others, your investment company may help at no cost.

I'm with Fidelity as well, r138. I met with an "advisor" to have money moved from Vanguard. The guy used the meeting as an opportunity for a sales pitch. He didn't know shit about their products and I caught him lying twice. I contacted the branch manager and had him unassign me from the rep. I was surprised a Fido rep would behave that way.

When it comes to your money it's best to pay by the hour if you need advice. Spend some time, read a book by Jack Bogle. Get educated, you will save yourself A LOT of money and it will ease your anxiety because you will feel more in control.

For those who won't have enough for retirement, scour all the low income and subsidized senior housing options available in your area (and others that you'd be willing to move to). In LA, the waiting lists are very long and some of the buildings haven't even accepted applications in years. So keep up with the news and as soon as you hear of an open application period, get ready to apply.

That's what I did last year for my dad. I called every single one I could find, started a spreadsheet tracking them and asked about application periods. Many of them told me their wait lists were too long so they weren't accepting any applications. One brand new building had 53 units and over 2,200 people on the waitlist. Their best advice was just to call in periodically for any news. Luckily, one of them was accepting applications a few weeks away. I ensured the application arrived by mail on the first day of the application window. Earlier and it would be disregarded. I wasn't expecting to hear from them for at least 5 years but now they've offered my dad a 1 bedroom apartment in a very decent neighborhood. The rent will always be 30% of his income--which is only SS. It also includes utilities. It's not a fancy retirement, but that's unbelievable security. As long has he has SS, he'll have a roof over his head.

When people say you should have a mix of stocks and bonds, it would make sense if people actually bought bonds. However, most people who say they are invested in "bonds" are not bond owners. They are invested in a bond fund, which can lose money just like a stock fund. When interest rates rise, the value of bonds decrease. My 401k offers a stable value fund from Prudential that pays less than 3% currently, but that rate is still higher than all the recent returns for the bond funds that are offered. I make more by investing the "bond" part of my portfolio mix in this stable value fund.

R129 & R131 When Roth IRAs were first introduced in 1997 it looked like a good idea to me, pay taxes up front on the existing balance then the principle and earned interest will never be taxed again. At the time to encourage people to convert to Roths the IRS let you pay the taxes over a 5 year period which I did. The balance is more than triple the original amount I started with and is tax free now.

I wish I took advantage of Roth IRAs back then... oh well. You were smart to jump on it.

I forgot to add that Roths are not subject to the minimum withdrawal on your retirement account. When the IRS does the calculation on the minimum withdrawal from your retirement accounts they don't add the balance of your Roths to the calculations.

r139 - yeah those free financial reps "lets review your investment" calls are just sales leads. Honestly get a Suze Orman book. People may disklike her but she knows her shit on how to plan and give you straight up advice on how much you need, where you are on track etc and how to save more. Keep in mind you can begin taking distributions from your IRA without penalty, anytime you want, by taking a 72t early distribution. It is named for the tax code which describes it, and it allows you to take a “Series of Substantially Equal Periodic Payments”, based on a calculation involving your current age and the size of your IRA.

Nice post, r145.

I have not read a Suze book, I suspect like Dave Ramsey she is really good about helping people to save. That's really important. Dave Ramsey's investment advice sucks though.

For investing advice, I really like the simplicity and low cost of the Boglehead approach.

I'm five years into retirement and loving every minute of it.

There doesn’t seem to be alcohol there.

R146, how young are you?

Whoops, wrong thread.

R134 -- that's not what the 4% rule implies at all. It simply means no matter how much you make, you can afford to take out 4% of your portfolio because you are no longer building up capital.

Isn’t Social Srcurity limited by how much investments who have? I’m puzzled by the poster upthread who said he lived on it yet had $750k in savings.

"how much investments who have?"

No, R151 but it can be reduced if you still have an earned income. There's no limit on passive income such as dividends, interest, pensions and rental properties.

[quote]In 2018, the annual earnings limit is $17,040 if you're under full retirement age. If you will reach full retirement age in 2018, the limit on your earnings for the months before full retirement age is $45,360.

R151, SS is not limited. But, it is not taxed if you have low passive income. At some income point, 85% of it is taxed.

Your Medicare premium does increase with your income, also.

I refer you to R153 if you have earned income.

R150, I don’t understand that.

R148, I am 61. I retired on my 56th birthday. Each year goes by faster and faster. It seems like as soon as I cross one thing off my bucket list I add two more things to do. Life is good.

R155, Google 4% rule retirement, there is a lot of information on it. Also, the early retirement forum is good to follow.

Ok, the 4% rule anticipates that your money will last 33 years, perhap longer. It anticipates using up your principle.

Yes, In down years you would dip into principal, in years the markets are up you would be growing your nest egg.

[quote]There's no limit on passive income such as dividends, interest, pensions and rental properties.

That’s odd. In most countries, the assets you have, and/or the income from those assets affects the amount of the pension given. It cuts out completely above a certain wealth level. So America simply taxes the income instead? If true, I wonder if that will change.

160 - that is a pension. SS is not a pension. It is a payment based on your lifetime of earned income. It does not matter how much you have or make post-retirement. It is part of the problem with SS. Wealthy retirees don't need SS but still collect it. The simplest way to explain SS is - Imagine 100 people are working and 50 people are not. Those 100 people agree to give a small percentage of their income to the 50 people who are not working in exchange for them getting a small percentage of the money of the next generation and so on and so on. That is overly simplistic but in general how SS works. The government can adjust that percentage to accommodate an increase in the non-workers vs workers etc but the system can never go bankrupt as long as there are people working and everyone is participating. The amount you receive is based of the 35 years of your life you earned the most. So lets say you start working at 21 but really didn't start making good money until 30, you would get an estimate based of those 35 years from 30-65. The reason why everyone gets it is because everyone paid it. I may have 10 million dollars at retirement but I still can get SS because while I was working - part of my taxes went to pay someone elses.

R160, R161, this. Isn’t a problem with SS, it’s by design. If it was “means tested”, the rich would get resentful about paying in, but not getting money out. They’d lobby to, eventually, kill the program. The fact that everybody gets money from the system in old age is what keeps it as a functioning program.

R161, why not lift the cap on income for FICA? The ones earning above the cap probably wouldn't feel the loss. I say this as someone who has earned above the FICA limit for a good chunk of my working years.

R163, this is often discussed as a way to fix the entirely self-made shortfall. Even if the cap wasn’t completely lifted, it could at least be raised.

(The cap is about $128,400 now, meaning that is all that is subject to FICA taxes.)

Yeah - lifting the cap on FICA is a reasonable solution to SS funding issues. But then we just gave a huge tax break to the wealthy and corporations that we can’t afford, so “reasonable” solutions are irrelevant.

The social security benefit is tied to to the amount of income and contribution the recipients had. If the cap were raised then the benefit would need to be raised for people who probably don't even need it. The OASDI tax is not an ordinary tax.

When I see threads like these I wonder how people like my mom with barely 30,000 in savings are even able to live. But yet she does.

Also I think many of you are anticipating living longer than you'll end up doing or that your health will stay exactly the same so you'll be able to do the things you used to.

Life is short. Enjoy your million(s) knowing that the majority of retirees have a lot less than that. Spend it all. And if you run out of money at 90, do you really think you'll care all that much? You can live off the state at that point

Agree R167. My mother lives on $1,200/ month in Social Security. In a house that was paid for in a middle class safe town. Not luxury and her kids help out for real estate taxes and car, but still lives on less than $20,000 year and is more than content. No desire for trips or fancy dinners. Every day with decent health is a gift - money for anything other than health care, small simple meals, gas and utilities is unnecessary. When I’m forced into a panic with news articles about the “retirement crisis”and threads like this where everyone “needs” at least $2 million, I think of her - and the fact that as a male who lives a less healthy life, I’ll have a shorter life span - and my fear dissipates.

There is no social security shortfall- there cannot be. that is the beauty of the design. There has been a gigantic surplus. To the tune of trillions of dollars. Back in the 80's Reagan got Allan Greenspan to convince everyone that they had to raise the FICA tax because social security was going bankrupt. They did, and it created a trillion dollar surplus. Guess who borrowed that trillion dollars to cover the crashing economy of the 80s? Yup that same Reagan. His top down economics plan wasn't working and was speeding us into a recession.

[quote] but still lives on less than $20,000 a year. That’s tight, and I note she gets help, but I think living a pleasant comfortable life on an income of $25,000 or $30,000 — which millions of Americans do — is easily do-able, providing you own your home.

Here's the dog saying "I want potatoes."

Ha.. That's adorable R171!

Agree R170. Too many rich gay men on this thread. And too much media induced fear. Smart to save as much as possible for retirement but the reality is most retireees have less than $200,000 in America.

If you are young, save. But if you’re an eldergay, don’t feel like you need to shoot yourself because you will be a homeless, starving indigent if you have less than $1million. Join the rest of us living a simple life and focusing on the joy of a beautiful day and relatively decent health. Glad I travelled a lot and enjoyed some finer things in my youth, but none of that stuff matters to me now. Everyone could go broke or die tomorrow - we can’t control the future.

Banks fail. Trump's America will show you that. Again.

I just spent the last few months working with a FA (financial advisor) to ensure my self-directed investments and retirement strategy were on track. (Yes, thankfully, as I expect to retire next year.) . Apologies to DL'ers abroad as much of this applies only to the US.

How much you need at retirement depends on a lot of things, as others have pointed out.

To develop a retirement plan there are two key points: 1.) understanding how much money you will require to cover all your living expenses in retirement and 2.) understanding where that money will come from. If you're lucky enough to get pension income, that and Social Security may cover the majority of your costs. Don't forget to factor in inflation.

Starting retirement with little or no debt is very important. Car loans and credit card debt should be paid off before you quit working. Mortgages are ok so long as you aren't upside down (owe more than the place is worth) and can safely cover the monthly payment.

If you live on $30,000 / year now and expect to deduce that to $20,000 / year in retirement, you need a sound, reasonable plan to achieve that reduction. I went through a couple years worth of credit card statements (found them online at the credit card company's website). Many credit card companies will give you annual summaries and sort the charges (groceries, drugstore, restaurants, etc.) That and my checking account statements really helped me figure out where my money was going currently and helped me understand what was reasonable to assume I could reduce in retirement.

The 4% withdraw rule assumes that, based on historical averages, your investments (typically 50% stock / 50% bonds) will return 4% annually or better, ensuring you never totally deplete the principal. The reason you want bonds and cash in your retirement portfolio is so you can tap into those during market downturns rather than selling stocks. You don't want to sell your stocks at a loss during a downturn or in a recession. Instead, your bonds and Money Market funds should maintain their value during those periods. Use those funds to meet your monthly expenses until the market rebounds.

Taxes - This is where I was confused and messed up my projections. Most people will owe federal tax on a portion of their Social Security payment since it depends on your overall earnings for the year; in some states, there is no state income tax on pension income and SS (hurray, I live in one of them); deferred income (money you put into a 401k or IRA pre-tax) may be taxed like ordinary income when you withdraw it (depends on a number of factors); your federal tax rate is based on your overall income, so your tax rate in retirement should be lower than it is pre-retirement. However that is not the case with everyone, especially when you reach 70.5 years of age and RMD's (required minimum withdraws of your retirement investments) begin. That can kick you into a higher tax bracket.

Don't forget to budget for healthcare in retirement. Medicare only covers a portion and you must pay for Medicare supplements. The cost of some supplements will increase based on your overall income in retirement (pension, SS, p/t work, etc.)

A couple of ideas for a safety net in retirement: A home equity loan, easier to secure while you are still working, can provide an emergency fund when needed; A reverse mortgage is sometimes an option, but don't get it until you need it and make sure it is with a reputable firm.

If you have a 401k plan at work, contribute enough to at least get the employer's match, typically 50% of your contribution, up to 6%. It's like free money. And don't borrow from your 401k. It impacts the overall compounded growth.

This stuff may not apply to everyone but I hope it's helpful for some.

Thank you for sharing, r175.

R175 - good advice. I will add - kids...put money in your 401k now. The sooner you do, the more you have in reitrement.

[quote] I'm 46 and have about 400k in various investments. I can sock away another 400 in the next 10 years. Then I plan to retire from my current career and get a job at a book or record store.

Sounds like a plan. If record stores still exist in 10 years I will join you there. We should stay in touch.

For the person who says as you get older, you slow down and don’t spend a lot of money: Not always. In the last two weeks I saw two Broadway shows with my 80+ year old Aunt and her friends. The two weeks before that my Aunt spent a week in the Berkshires going to different performances and museums. If you are lucky enough to be healthy, you can still get around and have fun. So please remember what you need to live on this year, is not the same in 20 years.

She has a pension (not a big one), a 401k and SS.

I don't know how you can expect to live on $20k/yr. Just last week I needed to get a new heat pump - there's $5k right there. I know both my refrigerator and hot water heater are in their final years. The roof isn't that far behind. So home spending will suck up a large portion of expenses.

I suppose I could sell my home and rent, but then I'll probably pay about $10k in rent annually. I'm not a big spender, but I'd imagine with insurance, repairs, day-to-day living expenses I'd average $40000 - 50000 annually. Being in CT doesn't help.

I'm able to do it on less, R180. I do take some money out of my retirement account, small pension and work a little part-time. I have household funds for house and car repairs. Where you live and how you shop are key. If I get to the point that I think I need a significant amount more, then I'll certainly step-up my part-time hours.

All these comments about how much money you will need to live on in a year -- who can tell? As the above poster says, if you own a house, things like a heat pump or a crumbling chimney are expenses that never appeared on your credit card summary before but they are facts of life and ones that you can't predict. I thought I knew my expenses well until this year when so many snow and rain storms caused my roof to crumble and I suddenly had a $20K expense to cover. Likewise, one of my best friends went broke (for various reasons and not all his fault) and I had to loan him $15K. Stuff happens. It's necessary to plan as everyone recommends, but remember that no one knows the future and you have to either sock some money aside for unexpected expenses, or suffer when you discover you need new teeth and Medicare doesn't pay it, or your dog needs surgery and you're out $4K.

[quote] the crashing economy of the 80s

What alternative universe do you live in that you think the 80's were a "crashing economy"?

[quote] the crashing economy of the 80s

My two siblings and I all graduated in the early 1980s so I remember well that we all had trouble finding work. In Conn., it was a worse jobs market than it later was in the Great Recession decades later. There were two back-to-back recessions in the early 1980s. I eventually finally found work at a Defense Plant, thanks to Reagan’s 600-ship plan for the Navy. It was only in the mid-late 80s that things started rolling along.

However, having obtained a Master’s Degree in 1989, I also recall that Mass. fell into a “high tech and housing recession” then. I recall hearing that on the radio when I was driving around cold-calling companies. It’s why Geo. Bush Sr. Didn’t get a second term, and we got Pres. Clinton instead.

r183 expansion and a booming economy are two different things. if you read the article they sort of gloss over the fact that Federal spending was astronomical. Money they took from Social Security to cover the fact that Trickle down economics was fracturing the economy, the trade deficit was gaping and the damage he did to healthcare of this country we are still trying to recover from. Don't use an op-ed piece as fact. Under Reagan the national debt tripled, the wage gap widened and to quote Gordon Gecko - Greed became good. Reagan cut the tax rate on top earners from 70% to 28%, his crony Greenspan cut the interest rates. It created a free spend culture and the massive credit card debt that still afflicts the poor.

R182, has your friend started to pay you back yet?

Rule of thumb is, for money to last the longest after retirement, use only 4% of your savings a year.

That means for every $40,000 you use, you have to have saved $2 Million.

So move to a cheaper house in a cheaper state. Find states that specifically don’t tax retirement income like SS and don’t have state tax (like Florida) and stretch your savings

^ sorry, meant to say for every $40,000 you have to have saved $1 mill

R188 You can reduce that amount you need to save if have other sources of income. I have a small pension and stock dividends which allows me to be less dependent on my retirement accounts.

Using R187/188 as an example, $1 million is enough. $40,000 from savings plus $15-$20,000 in SS is $55-$60,000 per year - in cash assuming no state tax on SS. That’s equivalent to a taxed salary of over $80,000. Which everyone should be able to live on - even in coastal cities.

I'm still working, but it was a huge relief to hit my retirement savings goal a while back. Now I can be reasonably confident that I can quite whenever I want and not have to worry financially. It's a great feeling of freedom.

Congratulations, r191. How much longer will you work?

R175 here.

There are a few posters upstream who believe you have to save every dollar you expect to spend in retirement BEFORE you retire. That's not exactly true. It is important that your investments continue to grow and provide income all throughout your retirement. To achieve that sustained annual growth means maintaining a healthy mix of stocks and bonds during retirement so you don't deplete your investments. Hence the 4% rule of thumb - a asset allocation of 60% stocks / 40% bonds has historically provided an average of 4% or more of growth each year. Therefore if you plan to withdraw an average of 4%, your principal (the amount you have invested) should remain constant. Some years you may withdraw more, some less depending on need. When the market is soft, withdraw from bonds rather than stocks.

The other thing my FA explained to me was the importance of delaying taking Social Security. Instead of taking it at 66, if you delay to 67, your monthly payment increases by 8% every month FOR LIFE. That's generally better returns than you can get in the market. So even if you retire at 66 or 67, try to delay starting SS if you expect to live into your 80's or more. I am thinking of retiring next year at 67 but will delay taking SS until 70. Doing so increases my monthly SS payment by $762 per month before taxes based on info available on to everyone on the Social Security website. (Check it out an ensure that SS shows accurate annual income for every year you worked. If you changed jobs a few times and the employer was sloppy with filing, some years may be blank and that will result in a lower payment.)

When figuring your income stream in retirement, you need to look at the following: Pension, if any; P/T work or consulting; Social Security; Withdraws from your combined investments and savings.

If you are lucky, pension, SS, p/t work, etc. may cover the majority of your monthly costs. What it does not cover will determine the percentage of withdraw you need to take from your investments. So you may not need to take a 4% withdraw. Or you may need to take more.

From that total of all monies coming in deduct your fixed expenses (rent or mortgage, healthcare supplemental coverage, food, utilities, etc). What is left will determine your discretionary spending (eating out, travel, etc.).

Sorry, I'm not pretending to be an expert. This info may not apply to everyone. It's just stuff I learned the last few months working with a financial advisor.

R193 - who do you use as a FA? Seems like they all just want a commission on investments. Anyone who will do an assessment for a few hundred dollars and leave you alone?

R44 and R46: You're both wrong.

"In 2017, the maximum monthly Social Security benefit for a worker retiring at full retirement age was $2,687. In 2018, the maximum benefit will increase $101 per month to $2,788" (www.ssa.gov) That translates to $33,456 in 2018. It is estimated that less than 10% of American workers have earned enough to collect the maximum benefit.

If someone eligible for the maximum benefit worked until age 70 and did not collect Social Security until then, they would get $3680/mo or $44K a year, but also would have foregone about $155,000 from Social Security during that time. That person would most likely have been earning their presumably increasing income during that period of time, too. But getting an extra $900 a month or a bit less than $11K a year by waiting until age 70 means you won't get as much (in total, and in constant dollars) from Social Security unless and until you reach the ripe old age of 84. Only then do you benefit in terms of the total you collect.

The way Social Security is set up, assuming equal lifespans, recipients claiming early (ages 62 to 66 and three months in 2018, more later) means less money monthly for a longer period of time. Claiming later (after full retirement age, now 66 years and four months) means getting more per month for fewer months. If you're in great shape with a family history of longevity and enjoy what you're doing for work, it might make sense to keep working past FRA. If you're not in good shape, health-wise, or broke, you may not have a choice to delay claiming SS benefits until full retirement age. No one can tell you accurately how long you'll live, but there are calculators (some very detailed) that can determine how long others with similar family histories and health problems like you have lived - in my case, 11.4 years and I'm 66. That doesn't mean I'm certain to check out at 75, but that it's more likely I won't be around until I'm 84.

Early retirees: remember, too, SS benefits are based on earned income. How much you made (and thus contributed) determines how much you'll get each month. If you stopped working today at age 50, you'd lose the benefit of 17 of your presumably higher-earning years that wouldn't be used in calculating your ultimate monthly benefit.

The smartest thing I ever did to affect my retirement was reading The Automatic Millionaire, a short and easy-to-read book that breaks down investments and savings and makes you understand that there is BEAUTY and FUN in saving - it sounds stupid, but once you understand the value of compound interest and start to see your dollars grow over the years in miraculous ways, you'll understand.

I have told all of my nieces and nephews about this book. I wish every person under 30 were required to read it. It truly changed my life, and not just my financial life.

The idea behind the book - set everything up to automatic deductions and transfers and forget about them - sounds too simple to be true, but the way the book explains it, and takes you down a path and exercises to illustrate the truth of it, your approach to saving will never be the same.

I read the book when I was probably 34 and I had almost nothing saved for retirement, and by the time I hit 46, I was a millionaire. I'm not joking.

Spend the $10 and read this book.

r195 you get it. I looked it up - the difference between my ss at 62 and at 67 is 33K if I live to 80. If I live to 90 it is substantially more, a difference of about 100K. But if I took the money I got a 62 and put it in an index fund for 5 years (adding in the money monthly and living off my 401K) I would more than make up that 100K difference.

I never understand why people buy the whole "wait as long as possible to take your Social Security" insanity. Do the estimating yourself. Go to SSA.gov and see what your various payments are at 62, 67, and 70 and then plug them in to a spreadsheet to add them all up month by month. When you also take into account the ability to make money on the money you receive in earlier payments, (assuming you have money to live on outside of the SS payments) it takes 23 1/2 years to have the total payment amount to catch up to the difference between having started at 62 or waiting until 67! That's age 85 1/2. Waiting until 70 takes it out another couple of years.

Obviously, don't take it until you really retire, but there is no reason to put it off after that.

R194, this organization has fee only financial advisors.

R198 - Many of us are going to live well past 84 (the actual age when you start making more money than not from early SS). In fact, many of us are going to live at least a decade longer. That's a lot of extra money.

More so, a lot of people don't retire at 65. If you work till you're 70 you will be taxed too heavily on the SS income, because you'll also still be drawing a salary.

So for some people, it would be insane to take SS early.

If however you're not making any money, and you don't expect to live past 84, then sure, do it. But how many people know how long they'll live?

I agree you should not take it while working, regardless of your age, hence the last sentence in my previous post.

"Many" of us are 1) not going to live well past 84, and 2) that's a really big bet to take for not that much difference considering the limited number of years you would have past 84 to get the extra money even if it worked out perfectly.

[quote] R11: I'm still working, but it was a huge relief to hit my retirement savings goal a while back.

I’m glad for you. It wasn’t this way for me. When I had enough to retire, I was no longer able to put up with the bullcrap I occasionally got at work. So, I retired early. I wish I kept working, but only at my first job (5 years), next job, (1 year), not the next job (3 years), then the next job (10 years). They were good work. The next two were crap jobs.

I encourage people to keep working. Your elder years are the time to really save money, if you can ever do it. Most importantly, to have purpose.

R198, I agree, everyone needs to look at their Social Security estimates and run the numbers while taking into account some personal facts. If you're in good health, take care of yourself and have a family history of longevity, you will see that waiting to start SS is probably better for you.

In my case, I'm 66, healthy, stay fit, low blood pressure and cholesterol, proportionate weight / height, etc. My father and his brothers all lived into their mid 90's and it appears I probably have the same genes.

I just ran the numbers. If I delay SS until 70 and die at 93, I will have gotten $1,007,124 from SS before taxes. If I take SS at 67 and live to be 93, I will have gotten $900,744. A difference of $106,380. Only if I die at 81 or younger do the numbers not work out in favor of delaying SS until 70. Everyone's circumstances are different but the odds are good that I will live into my 90's and thus better off delaying SS.

Delaying SS is not "insanity" for a lot of people who are healthy and can afford to delay taking it for a few extra years.

My mom is 96. I am very unlikely to live to her age (the men in my family don't usually last until 90). Her younger siblings both have Alzheimers, but she does not. I made out a budget for her because she was finding herself outspending her resources in some months. It was an interesting exercise. She gets about $2200 month SS (she got my father's SS when he passed), plus about $450/month from an annuity that came about when she became disabled and had to sell her paid-for house which was not wheelchair accessible. We have reduced the take out from her annuity over time because early on she made some extra withdrawals from it that reduced the principle to affect the ultimate payout. (I think she started at $650/month or something like that). So she is essentially living on about $31,000/yr.

She pays my brother $450/month rent for her portion of a duplex he bought when she became disabled and I, as her live-in caregiver, pay $450/month for the other part of the duplex. That is under market-rent by about half. So she spends about $5000/ year on rent, about $3000 on cable and phone, about $5000/year on medicare supplement and part B insurance, about $2500/year for housecleaning assistance, about $3000 year on electricity and gas, about $500/year for dental work, about $2500/year on monetary presents for her extended family - children, grandchildren, great-grandchildren - about $3500/year on church-related charities, about $2500/year for additional charities (public TV and radio, symphony, etc) and about $2500 for entertaining (dinners out, ordering food in when she wants to host a luncheon, ordering flowers, etc). That leaves about $2000/year for odds and ends (personal supplies, etc). It's easy to see why one event, like a dental crown, could blow a hole in her budget. I pay for her food and city utilities (water, sewer, garbage) while she pays for my cable and heat, since those are bundled services.

I only laid that all out to show how a retirement income/budget could look. Most of us would not be spending nearly that much on church-related charities, but might be paying quite a bit more in rent. Most of us don't have children, or such a large family, but probably eat out much more often. This duplex is large and expensive to heat, and most of us would probably be living in a smaller house - but I know that in PS for example, (as a gay retirement haven), summer AC bills average $600/month or more, so there's about $3000 worth of electricity bills right there. If we become disabled at some point, we are not likely to have a family-member caregiver, as I have acted for her, so some allowance needs to be factored in for that.

If you own your own home at retirement, that instantly reduces your expenditures considerably. You'll still owe money for property taxes, insurance, and maintenance, but in most places that will be much less compared to, let's say, 15000/year rent or 20,000/year mortgage payments. (Much more than that if you live in an expensive coastal state). In many cases, taxes, insurance, and maintenance will be less than $6000/year.

Someone above said that he's started to track his monthly expenses, and I think that's a great idea. That way, you'll know exactly how much you'll need in retirement, and that will tell you if you need to move to a less expensive area, if you need to pay off your mortgage before retirement, etc.

This topic overwhelms me, based on the number of variables. How long will I live? What unexpected expenses will arise (medical conditions, long-term care, etc)? What effect will the market have on my investments?

Instead of stressing over the unknown, I'm starting to think the best approach is to just take my best guess when I can call it quits. And honestly, I would plan on continuing to work in some compacity just to keep occupied. Nothing major, but something to earn 200-300/week. The other complicating factor is that I've been considering moving upon retirement, to go to a lower tax/cost of living state, which would mean buying and selling my homes in the midst of everything.

But at age 50, the end is in sight. I've got about $900k saved, plus I own a small business that I could hopefully sell for about $300k. But after years of busting my ass, working 70 or 80 hour work weeks, and not having taken a vacation in about 4 years, I'm ready for a new lifestyle and change of pace.

R295, you sound in good shape. If you earn 7% a year over a decade, you double your money.

I'm in trouble; mid 50s and I only have a little over $100K in a 401K; I might get that when the parents go.

I need a great Act 3 in my career to get ahead.

Yes, R207. You’re still better off than 90% of your peers, but trying to save more is a good idea.

thanks,, R208. I will.

I'm actually in a field that's dying so I'm going to have to make a move one way or another; maybe with hard work and luck I'll get some bucks in the bank.

We live in an era with greater changes to the way we work than few eras before. It’s a very tricky time.

For a 71-year old and 75-year old married male couple: $250,000-300,000/year. Both retired for years and live in Manhattan. Enough money to last us into our 90s and maybe beyond if we sell our coop down the road and inherit an older cousin's coop apartment too.

R205, check this website out, you don't have to go it alone.

Hope to see you there.

[quote] move to a cheaper house in a cheaper state. Find states that specifically don’t tax retirement income like SS and don’t have state tax (like Florida) and stretch your savings

I live in California and considering selling my house and moving to Nevada. I could pay the house I have off now but I don't like the neighborhood. I have a lot of equity in my house and could buy a house in cash if I moved to Nevada.

The question I have is for those who have moved to another state, especially those who are single, what about your support system like family and friends? How did you manage with moving and leaving those behind?

[quote]The question I have is for those who have moved to another state, especially those who are single, what about your support system like family and friends? How did you manage with moving and leaving those behind?

I've been wrestling with the same question, but here's how I'm rationalizing it: First, my parents are about an hour from me, and both in their 80s. So I'm probably not moving anywhere until they pass. I want to help them out as much as possible. But once they're gone, there's really nothing keeping me in the area (CT). I have family that's anywhere from a 2 to 4 hour drive that I see a few times a year, so I'd probably see them almost the same amount if they were a 2 to 4 hour flight away. My best friend is talking about moving at retirement too, so we've tossed around the idea of finding a locale we're both happy with and heading there (assuming he convinces his wife). I have a few other friends locally, but with their demands of family and work, I might see them every other month, at best. So I could fly up a couple times a year, or have them fly down. Finally, I have enough interests (tennis, golf, animal rescue) that I should be able to make new acquaintances.

The reality is that most of my days are spent working, or on my own; it's not like my social life plays a huge role in my life at the moment. So to leave that behind and start fresh might be a little stressful, but not a show-stopper.

We make a huge mistake if we only think of what it costs to survive today, but what will it cost to survive five or ten years from now? If you have "enough right now" that's not enough. If you're young enough and healthy enough to work part time to supplement your income do it. You may have money saved, but the longer you can postpone using it to supplement your current income the better of you are. And yes, pay off as much debt as you can. Especially credit cards and car payments.

Social Security in some form may be there, but health insurance costs will go up.

Thanks R212. I checked out the site briefly, and looks like there's some good info and conversation there.

The biggest challenge in all this is picking "the right" time to retire. It's slowly dawning on me that there is no certainty in choosing that moment, I could work and save another 15 years, and I'd still feel apprehensive. I have to trust that I'm careful enough managing my money that I wouldn't be doing anything crazy.

There's a small part of me also not looking forward to the reaction of some of my family. They have no idea how much I have saved, so will think I'm making a rash, crazy decision, and I'll have to deal with their concerns and comments about my decision. But it's possible that I don't share everything with them just to avoid the inevitable comments.

If you're in good health and you're 55 right now, figure another 35 years. Planning for 90 is more than reasonable. Put it another way. If you live past 90 you won't care. Consider the history of your family. Is longevity a feature? Do close family members have chronic long lasting health issues? Heart disease, cancer and Alzheimer's are the biggies. The thing is you have to work at being healthy. Exercise every day, eat right and take your vitamins. Stay mentally alert. Do things for yourself. Even little things like cleaning the house, doing laundry, cooking, etc. keep you independent. It's important. People, for some reason often forget to strengthen their upper bodies. But we should be doing resistance training and free weights three or four times a week. Get yourself one 5, one 7 and one 10 pound weight . Use them. of course if you can handle a 20 then fine. But when you're 75 you may not be able to.

R207 you still have a number of good income producing years ahead of you. I read an article that many people are delaying retirement until they are 70 for the same reasons you cite. I took SS at 67 which added 8% to my payout. I continued to work part time, 3 days a week and watched my assets grow. Be sure you have paid off major debts, mortgage, home equity loans and car loans. I was surprised how much less money I needed when I did this.

[quote] doggie-dog cutthroat r101

Oy....

r72 & r74 are not completely analyzing those statistics... yes, it says there are 14 million millionaires, but there's also another 14 million + who are net worth 2 million to over a billion so it is way more than 11.76% of all households (or over 1 in 10 as r74 put it).

R218 -- Confused by "if you live past 90 you won't care."

That's actually when you'll most need money -- your health will probably be failing, you'll need more help than you've ever needed. Who wants to be thrown out on the street at 90?

What worries me most is with all the advances in medical science, we'll end up being able to live to 110, or more.... and that means another 20 years of financial needs.

Huh R222?? -- millionaires includes those worth well over 2 million up to Jeff Bezos. You're not understanding the stats.

For those that bought long term care insurance, what age did you buy it? Are you satisfied with your policy? Does it provide in home care as well as nursing home care?

I'm 58 and I wasn't planning on quitting my job but it became intolerable so I did. First I met with my broker who my family has had for at least two decades. We did a risk assessment, I refinanced my house, and I researched health insurance. I have 700,000 in investments and 40,000 dollars in the bank. I have an apartment that I own and rent out for 700 dollars a month. I have no children and am healthy presently. I always cared about making and saving money no matter the salary. I'm wired that way. I can't say money makes life blissful or that I am always happy but it gives me a choice and it's something I've never worried about. My advice to younger people is to find a reputable broker, and work with them to save, invest, and pay off yours debts. I always invested the most I could through work and didn't panic when the market sunk. I just left it alone. It is so great to wake up in the morning knowing I don't have to go to work and can do whatever I please.

thanks, for the advice, R214. There's a lot of things I have to consider, especially since I had a sort of falling out with my brothers and sister, it's hardly enough to keep me here.

One thing, is that when I retire, I want to be free of all bills especially mortgage. If I paid off my mortgage, I'd feel secure enough to retire. I owe $80,000 on my house. I could sell my house and buy a cheaper home cash with the equity I have but be away from an environment I am familiar with and start all over again. Or continue to work and pay my house down but that means another 1-2 years and I don't think my body can take it. I love my job, it pays well and it's rewarding but I cannot do this 5 days a week anymore because I'm just too tired physically. I want to take care of my health and be happy.

There's so many things to consider and before retirement. As a single person, I wish I wasn't doing this alone.

[quote] For those that bought long term care insurance, what age did you buy it? Are you satisfied with your policy? Does it provide in home care as well as nursing home care?

I got mine through my employer, perhaps year 2000 or so. It’s $1500 a year, now. I really can’t comment on it, since I’ve never used it. It does increase in price over time. I am hoping it never becomes too expensive, as I get older.

For those of you continuing to work part-time in retirement, what are you doing? How much do you earn?

Thought this article from the NY Times about young retirees would be of interest here... FIRE: Financial Independence Retire Early

R228 I work Tuesday-Thursday as a website content manager/Marketing manager. Since I paid off all major debts I only need enough to pay basic living expenses. SS coversmy condo fees, RE taxes and Medicare. A small pension covers all cc bills, my earned income covers my monthly/daily expenses. I never have to dip into my retirement accounts or my stock dividends all of which are reinvested.

As we get older we have to down size and simplify. it's hard. There's no way you need s much space at 75 as you did at 40. My mother did a smart thing. She's mid 70's and she got rid of her house and bought a tiny condo. She can easily afford it now, but she will also be able to afford it in 10 years. When the day comes that I have to send someone over there to cook & clean for her and help her bathe & dress it will be a piece of cake! She has a modest amount of money saved and she will give herself an annuity from it when it becomes necessary. Fortunately she is healthy except for her blood pressure and her high cholesterol, but she watches her weight, eats pretty healthy and stays active. I hope I'm as sensible as she is when I get old.

R225, how much does your broker charge you and if you are in mutual funds, what are the expense ratios of the funds?

This is something that you have to pay close attention to. Everyone wants a chunk of your money and "financial advisors" are in a good position to take you to the cleaners. Remember, the safe withdraw rate is only 4%, so even 1% in expenses is too much. You'd be giving away 25% of your gross income away.

R225, don't confuse "brokers" with "financial advisors". Brokers earns commissions off everything they handle. A fee-based financial advisor (FA) can review your financials and put together a financial plan. They are not aligned with any bank or financial institution and are not licensed to sell you anything. Their advise is unbiased.

I hired a FA who I often saw on the local news as one of the financial experts they cited when doing a feature on personal finance. I also checked out the articles she had written for Kiplingers and a few other financial publications. The initial 90 minute interview was free and we discussed my current situation and where I felt I needed guidance. I told her I wanted a clearly defined financial plan to follow.

A few days later she sent me a proposal, giving me the estimated number of hours and number of meetings it would require for her to analyze everything and create a plan for me. The second time we met we reviewed all my tax forms, pay stubs, bank statements, statements from where I hold my investments, plus worksheets showing how much I spent each month, how much I saved, etc. We met one more time for a couple of hours before she produced various financial scenarios for me to review - retire at 66 and take SS at the same time; retire at 68 and delay SS until 70; etc.

Her fee was $2400 for about 12 hours work. I came away which a much better understanding of my current financial situation and a plan, with various alternates, of what to do leading up to retirement and immediately thereafter. (Like rolling over my 401k into an IRA. ) We agreed to met maybe once every 12-18 months or whenever I felt the need for a financial checkup. It's the best investment I have made and I'm sorry I didn't do it sooner.

R233. That was money well spent. I am looking for a CPA who is also a CFP to help me with tax strategies. I will only hire some one on either an hourly rate or a flat fee. I'm already have my investment plan Dow, but I need help on the tax side.

R224, my grandparents bought long term care insurance in their late 50s / early 60s, and it was an excellent decision. My grandmother developed Alzheimer's in her 70s and my grandfather became incapacitated in his 80s from several serious strokes. The insurance paid for all the assisted living and inpatient care they needed for nearly 20 years. It was a huge relief for their children as they didn't need to worry about having to pay for specialized 24/7 care.

[quote] R223: Like rolling over my 401k into an IRA.

I invest with Fidelity and they were constantly after me to rollover money from my 401k into an IRA. The reasons they gave me was that many 401ks have limited investment options, whereas a Fidelity IRA has far more investment options. Also, it meant one less account account to be concerned with. There were no other reasons.

So, I told them that my 401k was already with Fidelity and it offered a couple hundred options to invest in, so their rational wasn’t any reason for me to do this. And I asked them to stop asking, and they have.

There is an especially good reason NOT to transfer funds from a 401k and to an IRA. Money invested in a 401k cannot be seized if you are sued for some reason. Maybe you have never been sued, but it could happen.

IIRC, In my state, Massachusetts, an IRA cannot be seized in a lawsuit, except in one circumstance. If you are first convicted of a crime and then are found liable in a civil case, they can go after your IRA. You could lose your life’s savings in one horrific car accident. This is a big reason as to why I have not moved all my money from my 401k into an IRA.

This law, about how vulnerable your IRA is, varies by state.

The term “diversification” usually refers to investing in a variety of stocks, bonds, commodities, real estate. But there is another way to diversify. You can diversify by type of account, such as a 401k; a pre-tax IRA; ROTH IRA; and brokerage account. They are (mostly) taxed differently. I have some money invested in all four of these types of accounts, for diversification purposes, as I think that is prudent and not too hard to manage.

A fun calculator, but not sure I believe it ...

I always question retirement calculators that ask your current weekly/monthly/annual salary. I guess they work of the supposition that you're spending what you earn, but (1) spending habits in retirement could be very different depending on how you're planning to spend your retirement; and (2) your current spending habits may not be tied to your current earnings.

Easy example: John and Steve both earn 100k. But John has been spending 60% of his earnings, and saving 40% in IRAs, college funds, savings accounts, etc. Steve has been spending 90%, and saving 10%. So one's spending habits are not necessarily tied to one's earnings. So why ask my current salary to calculate retirement financials?

Am I missing something?

No, r240, you aren't miss missing something, and all retirement articles base retirement saving on income. It's the living expenses that should be used as a guide as to how much you need in order to retire for the exact reasons you stated.

Now that I'm retired my old salary is absolutely meaningless. However, my bills and other expenses are of concern.

I'm quite sad about this, Jack Bogle, the founder of Vanguard passed away. Jack promoted the low cost way to invest via index funds. I will forever be grateful to him. In a sea of greed, Jack was the one person who looked out for the little person.

RIP Mr. Bogle.

Thank you Mr. Bogle. RIP

I’m curious on two things:

1. How are all the people who were gleefully tell us about their rate of return on investments? My 401k went down $20,000 in a month and my IRA ROTH has lost all gains it had for 2018 and I really don’t have that much in it.

2. It is really hard to find information on how much to save when you get a pension. Does anyone have links? Most calculators and articles are for people with no pensions and some of us will get them. I’m saving, but I would like to spend some money on me (now).

[quote] It is really hard to find information on how much to save when you get a pension.

There are two separate issues with regard to this question.

1. The amount you have to save depends on what kind of income you want.

2. If you're getting a pension, it's a fixed income amount. So, when thinking about your investments and diversification of your portfolio, you may want to think of it as you would any other annuity or bonds. The asset allocation between stocks and bonds is the single greatest indicator of the likelihood that you'll have enough money in retirement. As a starting point for analysis, take 110 and subtract your age - that is the percentage you may want to have in stocks/equities. By the time you retire, at 65, you would have 45% of your assets in stocks and 60% in bonds.

Once your retire and start drawing your pension, social security, and drawing down your retirement accounts, the issue becomes HOW (from what buckets) you withdraw your money from retirement accounts and rebalancing as you do so. You'll need to take into consideration issues like cyclic downturns when deciding from which bucket to draw money. Best advice is to build a plan that covers multiple 3-5 year time windows and project cashflow and spending requirements, then map out your asset allocation changes and draw downs.

Not to mention, there are pension issues like lump sum distributions, driven by rights of survivorship, tax planning.

^^^oops, I meant, "By the time you retire, at 65, you would have 45% of your assets in stocks and 55% in bonds."

I changed the retirement age part of the sentence to be more realistic to actual retirement ages for people these days, but forgot to change the other number.

The rate of return assumptions drive me crazy. The start and end points - and short term swings - will always mean you can lose money. In reality if you invested at the start of 2018, you lost money. Assuming the market continues its slide, you will continue to lose money in 2019. While the mantra is “over time” you always make money in the market, its not so black and white. The idea you should just assume you wil make 5% per year - or even 2% - is not true.

Right now, it’s smarter to be in money market/cash with variable interest rate. Which means maybe 2% rate of return. And the the stock portion loses 10%. So for the next 3 years, I would bet you don’t make even 1% return - and could lose a significant % of what you are saving.

In general, as much as planning is smart, retirement is a crap shoot. I’ve worried about it since I was 25. And envied my brother who had a great pension. He died at 45 of cancer. So I’ve learned to worry a little less - and enjoy today a little more. Because it’s very possible you will never make it to 75. And wasting your healthy years in a miserable job that makes your life hell is not worth the false security of retirement savings,

R244, check out the retirement calculator in the website linked below. It allows you to put in projected pension, SS, etc.

With regard to your other point, hopefully you left your investments alone the last six months and did not "sell on the dip" when the market went down. It's all going back up. History shows that's true. And while you may bemoan the market's performance in second half of 2018, if you've been in the market the last few years, you have benefited from some pretty healthy gains.

I'm 67 and just informed my employer last month I will retire in April. I will do so with some degree of confidence I won't outlive my money.

1. I am thankful that 30 years ago I learned about Vanguard and Jack Bogle and index funds, I've done well with my investments. (I've only owned index funds - no individual stocks).

2. I'm thankful I worked for a company that offered a pension back when I started 30 years, and when they froze the pension program, they grandfathered in those with 20+ years service. It's not a lot of money each month, but it will help.

3. I am also grateful that when my ex and I broke up in 2000 and I bought my own place, I was diligent about paying off the mortgage and reducing credit card debt. I am retiring without a mortgage and no credit card debt, but that took a lot of effort, keeping spending down, foregoing expensive trips, etc.

4. And I am happy I researched and found a fee-based financial advisor who reviewed my situation and ran the numbers. See my comments above in earlier post.

R193

Congrats R248. Are you worried about losing 20% of your money in the next year and not having 10 years to leave it there to make the money back? As much as I appreciate the history trend, there have been multi year periods where if I had to retire I would have 30% less than I had planned on. There is also the risk we become like Japan and go through a long period of never recovering.

R247, I disagree - unless you plan to retire in less than ten years. Money markets will not keep up with inflation. If I planned to retire in ten years, I'd be heavily investing in stock funds now while prices are depressed.

Why do people think prices are at a low - when most cycles historically have shown a multi year downward cycle before increasing again? Even if it just returns to where it was when Obama left office, it has a ways to fall yet. Seems to me that investing in stock market now is a guaranteed way to lose money over the next 2-3 years.

Trump, Brexit, Global Recession, Global warming, Mass migration, endless world war for declining resources and starving hoards fleeing the costal regions. Fuck retirement. Nothing you save is going to be worth anything when all this is said and done.

Live for now.

Gee, thanks for the anxiety attack, DL. I'm 56, have about $20,000 in savings - no 401K or anything like that. I do own my condo, though.

The average person should have $1.5 million? WTF?

I guess I am fucked.

R249, like everyone else, most of my gains in 2018 were wiped out in Q4. Overall I lost about $130,000 in gains, putting me back to about where I was this time a year ago. But those investments are still solid (60% stock funds / 40% bonds and money market) and will grow enough over time based on various Monte Carlo simulators to sustain me for the next 25 years.

Fortunately I purposely under-valued my investment values when I worked with the FA, just in case. I also purposely over-estimated my expected expenditures and included costs I know I can reduce if necessary. (Example: I live in a large urban area and own a car. I could sell it if needed and save on monthly parking, gas and insurance, and just rely on Uber/Lyft if not the bus.)

Yes, I am worried that there could be a sustained period where the market is flat, but presently the market indicators are positive - low unemployment, moderate inflation, etc. Thanks to my FA's analysis of various scenarios, I know that pension and SS income will cover roughly 70% of my monthly costs in retirement, meaning I will need to withdraw less than 3% annually from my retirement portfolio. Based on various Monte Carlo calculators (which base their analysis on the last 50 years of the market's performance in sustained good periods and bad), 3% is reasonable to ensure you don't outlive your savings - as long as those savings are invested in a well balanced portfolio. This means you must maintain a healthy stock exposure. I plan to maintain my 60/40 stock vs bond allocation for the foreseeable future.

Welcome to the club R253. The majority of Americans have nowhere near the “goal” of over a million dollars. Posters here - and friends in NYC and CA - seem to over represent the millionaires in the US. I’m 51 and have about $100k in 401k and about $50k of home equity.

I’m placing bets on early death. Everyone on my fathers side died before 67 from cancer. So I’m not wasting my 50s working like a dog and then die a year after I retire. Tired of being terrified of being broke at 85. I don’t spend crazily but I’ll never have a million dollars. Threads like this make us seem like outliers - when in reality we’re in the same boat as most Americans (possibly better off if we don’t have a ton of debt).

How will I pay for my minks or my tiaras on only $4 million saved? Those estimates are too conservative--especially since the latest projections suggest inflation will quadruple in 2019 alone, and that medical science will extend my life for another sixty years after retirement!!!!

Lol - exactly R256. Like seeing all the IG whores with the private jets and fabulous vacations. Always best not to compare. We never know what the truth is. But we do know that the majority of eldergays don’t have a million dollars - based on factual averages of the US.

Nor do many of them need it, R257, as it depends on where you live, what your needs are, whether you own your house, how much travel, entertainment, dining out, etc. you want to do. Figure out where you are with retirement savings, figure out where you want to be, then start doing what needs to be done.

You want to live in or very near a major city and travel, entertain, eat out? That's going to cost you and you'll need every penny you can get. You want to live an hour out of the city, do your own cooking and chores, with a couple of weeks of vacation a year? Social Security and a bit of savings on the side might be all you need.

r/personalfinance

R244: re: rate of return - I invest with Fidelity and am happy with them, but I don’t think they have a good tool to report rate of return. I use my brokerage account like a checking account, so the balance is always changing on that basis alone.

I can say based on my Roth that I’m back to where I was in Sep 2017, so I lost a lot in Dec, 2018.

[quote] R252: Live for now

Ideally, you will enjoy your life [italic] and [/italic] save for the future at the same time. I think it’s a mistake to ignore the possibility that you’ll grow old and need savings. .

When I got raises, I’d take half of the raise and save it. Then I’d take a quarter for increased living expenses. The last quarter would be for fun. In theory, anyway. I increased savings until I was saving 10% of my salary. Then I stopped increasing my savings.

At some point, I realized I had too much saved in my 401k for my age (50), so I reduced my 401k contribution until it was enough to get the employer match, but no more.

The basic logic is in the short term the market goes up and down but in the long term, it goes up. Simplest investment advice is to invest in index funds with low or no load. The key to success is dividends. Make sure your funds are investing dividends back into your funds. For example, if in 1985 you invested 100K in an SnP fund - and never added a dime you would have close to 2 million dollars today. Putting it in more realistic terms. Let's say you put 10K in and added 1000 a month - say via an employer 401K with a match so 12K a year (well below the 18.5K max). You would have 2 million + dollars. If you put in 5000 in 1995 and put in 500 a month - you would have 333K The moral of the story is if you are under 30 and you are offered a 401k sock away as much as you can afford now. The more you put in early the more you will have in the end.

[quote]The rate of return assumptions drive me crazy. The start and end points - and short term swings - will always mean you can lose money. In reality if you invested at the start of 2018, you lost money.

That's because you're looking at the wrong time frame. If I need money right now or know that I will need money this year, then you're right. But if you're talking about starting a retirement fund, contributing to a 401k or IRA, etc., with a time frame of 30 years or more, then you absolutely can make those rate of return assumptions.

I began seriously saving for retirement 25 years ago. My rate of return over those 25 years is roughly 7.5%, about average for those who invest in the market. In any given year, my year-over-year rate of return has swung pretty wildly, with extremes of over 25% down or up in the worst and best years. But that was all just gains and losses on paper, numbers in a spreadsheet, not actual dollars and cents. Over time, it's been remarkably consistent.

Now that I'm getting closer to retirement, my tolerance for such wild swings is lower, so I've reduced my exposure to stocks and increased my funds in safer investments, but at the cost that those safer investments yield a lower rate of return. I will not eliminate my stock investments because I know that, over time, they will bring in more money. It's up to me to manage my risks appropriately.

[quote]While the mantra is “over time” you always make money in the market, its not so black and white. The idea you should just assume you wil make 5% per year - or even 2% - is not true.

Yeah, it absolutely is "black and white." And yes, you can assume that you will make a given return over the long haul. If we were to play your game and constantly try to game the market, we would fail, as even the best financial wizards can't do that. And if you're too conservative and only put your money in "safe" investments, you will be lucky even to keep up with the rate of inflation, much less increase your funds fora safe and financially healthy retirement.

The new trend is to retire early. These genX/millennials are saving all they can early and retiring. There are plenty of websites that tell you how to do it. Basically, it is figuring out how much you need to live on per year. Save enough so that 4% of your total savings = your yearly needs. Never take more than 4% and invest the total in an index fund or funds. Your money will grow in the long term, you never touch the principle and have enough to live on for the rest of your life never working if you don't want to.

Plus...at some point, you can start drawing down on your principal. There’s no reason to die with a million in the market.

If you really are in it for the long haul, the worst thing you can do is overreact and panic. I've heard several people, on DL and elsewhere, say that they "lost all of their investments" in 2008. Some of those lost everything because they really had no choice but to sell because of their financial circumstances and I'm genuinely sorry for those folks. But some of those lost everything because they were afraid.

Well, I lost a lot in 2008 but I kept buying and I stayed with my plan. By the end of 2009, I had gained it all back and then some. And it's been a good ten year stretch since. If I had panicked and sold, I'd be in far worse shape today. I, too, would likely have come close to "losing all of my investments."

I retired at age 62 after becoming obsessed with the idea about 20 years ago. Here is the best calculator IMO on the web.

I'm one of those who has a lot saved and is worried... but that is only because I'm determined to retire early. (I'm 50 now, and would love to retire in the next few years.) So that means my savings need to probably last 25-35 years, plus I would be theoretically in my last couple years of saving.

Once I catch myself and recognize that my other option is to keep working, then i'm not really worried. But I have a one track mind these days of getting out of the workforce soon.

Plus I worry about everything. I hate it, but that's who I am.

R268, a 30 year retirement is what 65 year olds plan on. You need to plan on more like 40-45 years in retirement to go at age 50.

I refuse to sacrifice my life to save for,living until I’m 90. Good for you if you can, but I would need to work 2 full time jobs and eat ramen to have any chance of retiring by 65. I’ll value my time that I know I have - today - over the time I may have 30-40 years from now.

This whole thread reminds me of living with the threat of nuclear war. Cheer up, it may never happen. Do what you can but there’s a good chance worrying is making the time you do have on this earth less pleasant.

OP = Twat. Go eat some Grey Poupon.

R270, if you can’t reasonably afford to save, then you can’t. That’s easy to understand.

But anyone who can save, without sacrificing everything to do so, should.

Based on every life expectancy calculator I've run, there's very little chance I'm reaching 90, R269. I don't have the best health or family history... part of the reason I'm looking at early retirement. I also have some income sources that I don't use in my planning (social security, and a side job that provides me $10-15k annually that I would continue) so I have some wiggle room.

the fuck does some save two million dollars ffs?

Most people are barely scraping by and in debt up to their ears.

Exactly R274. Most people will not have $1 million to retire on. So drink and smoke and hope you die by 75.

R275, That’s fine for “most people”. I expect to live to 80-90, and I won’t want to be working then, so I saved for it.

By far the smartest thing at any age is to eliminate all credit card debt.

[quote] You need minimum of three million in "potential" liquid cash. That would not include housing. That is if you have a solid social support, like children, spouse or reliable friends. Without "solid" support to back you, you need at least eight million, because you will have to purchase this support in forms of short term nursing home stays, taxi rides, and paid day to day help.

I love that so many of you took this as a sincere post and were stressed out because of it.

Many of you are working yourself into a hyperventilating state because people are purposefully trolling you on this thread. Despite what Suze Orman may imply to sell her books, most Americans do NOT retire on a full $1.5 million dollars! Most Americans do not even retire on anything close to $1 million.

I got hit this month with a "highly compensated employee" designation for 2019, which limits my 401k contribution to 10%, which will be less than the $19k I could have invested. I'm already maxed on contributions to every other type of tax-advantaged retirement account. This is going to screw with my planning. I guess I could take the money that I can't put in the 401k and buy junk bonds to earn enough to compensate for the amount that the IRS will take.

Your accountant will want you to have $5 thousand a month.

[quote]By far the smartest thing at any age is to eliminate all credit card debt.

R253 here (56 yr old with only about $20K and a condo). I will say that is the one thing I've always done, thank God. NO credit card debt.

As a widow I took retirement at age 60 on my late husband's SS. When I turned 70 I used my own benefits, which gave me quite a windfall. Qualified for a lovely senior subsidized apartment in the same burb that Gates and Bezos live in. I am careful with expenses. Since I traveled extensively with my career and my late husband's, I have no desire to do so nor would I be able at age 78 with bad knees and broken hip recovery. You do have to be smart. One of the biggest mistakes is taking ss benefits early. Medicare covers everything except copays, so providing you weren't self employed, you should be fine. 20 days of nursing home/rehab center costs nothing providing you were in a hospital for 3 days prior.

"My partner...has a taste for the finer things. "

That's nice. So tell him that you don't object to his contributions for them. Otherwise...

I skimmed a bit, but certainly a planning consideration is where you live. Be wary of advisors.

Don't count on $$$ from your parents.

My father was a surgeon, had about $3 million saved, and died a quadriplegic at 71 after developing a neurological disease at 62. He was about $30,000 at debt in the end, and this was even after the excellent and heavily discounted and often care he received from colleagues. At home nursing care is exorbitant, and then regular bills need paying, food, and general home wear and tear such as a new roof and pipe replacement come as a costly surprise.

I know $1M sounds like a lot, but if your retirement lasts 25 years, and you plan to spend $40k/year, that would mean you're spending $1M in retirement. I understand that doesn't equate to needing $1M in savings (assuming your money continues to earn while you're drawing down from it), but it does give you a sense of how easy it is to spend that amount without any extravagance.

My partner and I have a million socked away. The house is paid for and we’re in our mid fifties. Our planning guy says we should end up with about five million if we work until 65. He then said we’d have about 10 million if we live til 90. I scoffed but he said by that time, 10 million won’t add up to much. That being said, it seems like five million is what we’ve been told we need to retire with. Our combined annual salary is about 200k. Feels like overkill to me but my partner assures me it’s not.

I’m 45 and have a million in the bank. I can barely make it day to day.

A few of my IRAs lose money because the interest is less than the fees. I worked for a number of companies and with each change I had to use their IRA vendor, but not work long enough in one company to reach critical mass.

I suspect that was part of the design--it makes money for people in finance even when it loses money for the people trying to save.

[quote]You need to plan on more like 40-45 years in retirement to go at age 50.

One factor for early retirement is health insurance, particularly if Republicans manage to kill the ACA. I do plan to retire a few years early but likely will not be able to do so if the ACA is gone, as all I would be able to get would be a catastrophic health care plan through the state. No sane insurance company wants an overweight older guy with preexisting conditions and bad knees.

[quote]but if your retirement lasts 25 years, and you plan to spend $40k/year, that would mean you're spending $1M in retirement.

It's not nearly that simple. There are two factors you're missing: the first is that you also have Social Security to draw on, which will likely handle half or more of that $40k. The second is that your investments will continue to grow in value. The general rule of thumb for retirees with money invested in stocks, bonds, and cash, is that you can expect in the neighborhood of 4% return on those investments. That's $40k every year on that million. So between those two factors, at the end of that 25 years, you actually have more money than when you started.

That, too, is an oversimplification, of course, as it overlooks the significant ups and downs of the market and it overlooks inflation, which will mean that at the end of that 25 years, you're spending well over $40k a year for the same standard of living.

When I was still working I was addicted to online retirement calculators. My favorite was the AARP calculator, which is the only one that doesn't tell you that you need $1 million plus in order not to die in the gutter, but I liked to run the numbers through other calculators just to compare.

How much money you'll need depends on a lot of factors such as what your living expenses will be, whether or not you'll have a pension or Social Security to rely on, whether or not you'll be renting, what kind of assets or debt you'll have, etc. And of course you want to factor in a generous estimate of how many years you might live in retirement.

Figure out what your monthly living expenses are. Andbe realistic. Don't sit there and say, "well I can live on $2,000 a month. " That's bullshit. You'll probably need at least $4,500 a month. Minimum. Now figure a cost of living increase annually, say 2-3%, and then you'll have your answer. If you're able you probably should try to work until your 67-68. Another 5 yrs. Don't take your Social Security until your 68.

You know preparing for retirement involves more than just "saving money." It also means cutting expenses. Planning. So look at your current living arrangement. Do you rent or own? Do you have a mortgage? Do you home equity loans, or have high credit card debt, a car payment, an "emergency fund."???? Would a debt consolidation loan work for you? Are you paying a higher rate of interest than you need to? Are you establishing a budget you can live within? Go over all your monthly expenses and figure out how to cut back. Maybe your insurance rates are too high. review everything.

[quote]I refuse to sacrifice my life to save for living until I’m 90.

EXACTLY. It's all about not how long you're going to live, but how many GOOD YEARS of health to enjoy life that you have left. 15 years? 10 years? 5 years? If you hate working, wasting this precious window of time on earth, is fucking nuts.

And especially if your nephews or nieces inherit a shitload of cash, if you cark it sooner. Why work for them? If you're gay, the goal is to use it all up!!!

[quote] By far the smartest thing at any age is to eliminate all credit card debt.

Before the crash, the banks were all offering “no fee” cash advances, and balance transfers; loans, basically, for free for a year. I had borrowed over $130,000 at one time, ha ha. I put it in the stock market and earned stellar returns. They don’t do that now. It’s like, 3% at best for a transfer now and screw that!

I lucked-out that the crash didn’t burn me.

[quote]but if your retirement lasts 25 years, and you plan to spend $40k/year, that would mean you're spending $1M in retirement.

[quote]It's not nearly that simple. There are two factors you're missing:....

No, you missed my point. I wasn't suggesting you *need* $1M to retire, I was outlining what you would be *spending* if you spent $40k a year for 25 years. Which is simple math, I know, but I think people hear a number like "one million" and assume it's this huge amount that they never would need, but it's really not a lot when spread across time.

Don’t forget you’ll get social security, God willing. So, that’s a plus. Hopefully, either your mortgage is paid so in your dotage, you have minimal housing-related bills, or you sell and you rent something affordable.

My neighborhood has gentrified and I didn’t think I’d get wealthy neighbors who also want to spend (mostly other people’s) money on condo upgrades.

Agree R293. Life is going to suck if I’m an invalid at 80 - whether I have money or not. But all my genes say I will get cancer and die before 70. So I’m going to try to enjoy the time I have where I’m healthy and capable of enjoying life.

My biggest fear is dying with hundreds of thousands of dollars that I sacrificed my life for and worked miserable jobs to save - and never got to enjoy. No desire to let nieces and nephews get it. My goal is dying broke with as much debt as possible. I refuse to live in fear until the day I’m diagnosed with terminal cancer. I’ve seen it happen too often.

I'm getting the distinct impression here that the $1M I have saved for retirement next year is not going to be nearly enough, even coupled with my top dollar SS $ ($3500 a month).

Do I just kill myself now?

I would,kill for that R298. The SS alone. Congrats. Ignore the chicken littles. There is always risk of catastrophe - all he money in the world is not enough of a safety net for some people. You did great, kudos.

my total monthly income is $3,600 net. I get SS and a pension. My health insurance is included. I'm frugal, but very comfortable.I'll be happy once my car is paid off. But I manage to go out to eat 3-4 times a month, and usually one of them is to a decent restaurant. I go to movies two or three times a month, I take a class, I am on several volunteer committees and life is peaceful. I can go to the art museum anytime I like and since I live in a very mild climate there are dozens of fairs festivals and outdoor music performances starting in early April. Life is good.

I'm in the same boat R300. My total monthly income is $3,400 with SS and a pension. This is about what I was taking home at my job. But this is only projected to last until I'm in my early 80s (or about 15 years). I don't own anything except my car and I live in a small apt but have a pretty good life. I thought I wouldn't have any luxuries either but have found that I'm able to eat out. take vacations, and do more than I did before, probably because I no longer pay for health insurance and commuting costs into the city.

Thanks R300 R301 - finally some useful opinions. I may only get $2,400 in SS but have $300k in 401k. I don’t plan to live past 75 based on family cancer history. I’ll save as much as I can in the next 3-5 years but I’m not shooting to have $1 million.

I don’t plan to travel a lot or go out as much after 70. I’ve travelled plenty and eaten and drank well for years. It doesn’t bring deep satisfaction. A walk in nature, a trip to museum, cooking a good, healthy meal is all I need in life nowadays. Hiring hustlers to go on a vacation to Paris or going to exotic Caribbean resorts holds no appeal to me.

Right R302. A lot of people will have traveled and done things they've wanted to do before retirement. And you have to remember that the market will go up and you will most likely be able to continue living well enough no matter how long you live The fact that you enjoy simple things makes a big difference. And don't buy into the fact that you will have the same medical history as your family members. Life's a crapshoot.

r297 you and I are the same person.

R286, you are sitting good. When do you want to retire? At a 4% withdrawal rate, 5 million would go vie you $200k per year plus social security to live on. Do you really need that much?

We all seem to focus on money when we think about retirement but we don't know how long we will be healthy enough to enjoy our well earned free time. My spouse and I retired at 56 and wish we could have gone earlier.

As people have stated, you have to make some lifestyle changes when you retire. It's absolutely insane to live in a high cost, high tax area no matter what your age, but when you retire you must live in a area with a reasonable cost of living and low taxes. So as you plan your savings, you also need to plan to make a move to sensible living.

Because I have a rent stabilized apartment, it is actually cheaper for me to stay in the city than move. Plus I don’t pay for a car - or depend on one as I get older. Taxes are an issue. But I’m thinking the extra 5% is worth it for the benefits of living in a blue state with good social support and government programs. And being surrounded by people who think like me politically - as well as a wide range of ages, ethnicities, religions and sexual,orientations.

If you end up completely destitute, in need and hopeless in your twilight years, at least you can console yourself with all that.

Willing to take a chance at being destitute and hopeless at 80 and finding some pills to take me out. Better than being exhausted, stressed and hopeless for another 15 years when I should be enjoying my life, my family and my partner.

I think youre in good shape R307 and I agree. Id rather pay a bit more and be in a blue state ...

For those thinking they're going to have a lot of resources in their paid off homes, they need to consider a potential downshift in housing values in the next 10 years.

Over 50% of homes are owned by baby boomers or older generations. When they start to sell these homes off, there will likely not be enough buyers with the financial means to buy these homes at these prices.

Most likely there will be a negative impact on the housing market, driving prices down.

I am in my late 50s. I doubt I could get a mortgage at this age, but am I screwed because I do not have any real estate?

My mom is 96 and still mentally sharp, so I have a friend who says "you should plan for that" when you're doing your financial planning. But she's an outlier. Her younger brother and sister both have levels of dementia. (No short term memory). Hopefully I'll be aware enough to fling myself down the stairs when I can see the handwriting on the wall. Long ago I bought whole life insurance, which is not a recommended investment strategy. But it has come in handy - I was able to borrow against the cash value to buy and renovate a second rental house, which has steadily been providing income and will be completely paid off in about 5 years. I've been told (and I need to research it), that if a person lives to be 90 he/she can take the entire cash value out of a life insurance policy. So, if I'm still alive and not demented, that might be a fun old-age play money time.

I don't know why there isn't more Golden Girls type of living arrangements for older gays and lesbians. That always seemed like a good idea - but I guess we don't really love having roommates.

I'm hoping that something like that can happen for me. I should be OK - but planning for retirement is so fucking stressful to think about in the US.

A lot of the savings expected from Wall Street is just logistically impossible for many people. This thread is just so depressing.

R309 Agree but I am looking at 70, not 80.

If I can't keep my online job beyond 70, then it is nitrous oxide tank bye bye for me.

R314, I've thought about a business model where I or a company would organize housing for 4-6 seniors much like in The Golden Girls. A manager overseeing a number of houses would take care of the home logistics and provide some social services support. Not sure it would be a viable business but it would be great for single independent seniors who do not want to live alone nor in the traditional retirement home.

My roommate days ended in my early 20s. For some it could work I guess.

I’m reading above that one might expect a return of 4% on investments in retirement; however, I have heard elsewhere that it was 7%.

So, I am guessing that it is 7%, less an inflation rate of 3%, meaning a net gain of 4% in investment value after inflation. My personal experience is closer to the 7% figure. The crash put a big dent into my average returns.

This past year has been hell. We all kind of made it back from the '08 recession and then it all disappeared again this year. Broker says to expect 3% ROI for a while.

Thanks to student loans I'll be working til the day I drop dead.

How many of my fellow GenXers and younger expect to get Social Security? I'm 53 and have always been skeptical about us getting our fair share.

R321, I get very angry at my neice who’s about 26 when she talks like that. Social Security is easily affordable by the U.S. in perpetuity unless the Right convinces people to “give up”, and turn the money over to the wealthiest among us. Especially at 53, you should expect, and demand, to get SS and Medicare. You’ve been paying into it. There is no excuse to deny it to you, except greed.

You should not let them take it from you!!!

( Take SS at 70. no discussion fund your needs elsewhere. Get the max SS bene.

reply 316

these programs already exist in WA state. They are called group homes.

No R318 -- No one is saying you can expect at 4% return on investments. They are saying that the common formula for how much you can take out of our capital is 4% a year. Big difference.

Also, most people as they age reduce their equities to reallocate to bonds. So if at 75 you're 40/60 stocks bonds, if the stock market goes up 10%, your portfolio won't, because the bonds are probably paying somewhere between 3 and 5 percent.

agreed about asset allocation, though unfortunately bonds are performing poorly

You two haven't considered inflation's effect on the price of rent boys, caftans and collectible figurines.

3500 per month + $1M sounds like a pretty nice nest egg. You should be fine.

R324, are they assisted living homes? I'm familiar with that example. If so, that's not what I had in mind. My idea are homes for seniors who do not need assistance but don't want to live alone. They want roommates in a comfortable house setting. It's a combination of independence and companionship. Sure one senior can do it by advertising on Craigslist and renting out spare bedrooms to other seniors. But a business approach would alleviate one senior taking that responsibility and it can also maintain the homes, collect the rent, find new roommates, etc.

[quote] R325: No [R318] -- No one is saying you can expect a 4% return on investments.

I don’t know about that, R325. I averaged much more than 4% though it is hard to tell because I live off that money, and those withdrawals shouldn’t be counted as affecting performance, clearly.

The only glitch is that this doesn’t include a bear market period and we are due for one. But I don’t think that matters much as I have 90% cash now, so I shouldn’t lose much in a bear market if I keep my nerve, and God willing.

So, I use 7% as a typical person’s return, when I think about it. What number do you use or do you see published? If it’s 3% or less, it’s not enough better than a bank account to justify the added risk of the stock market vs. a bank account.

I meant, over the last 7 years on average, I’ve made more than 4% per year...

My nephew, who I am coaching, has never seen anything other than a bull market. He’s going to be surprised. He’s thick headed.

Can you imagine having to be a roommate with some one who has never lived with someone? Vacationing with firiends in our fifties is pretty stressful and that’s under temporary and usually fun conditions. Some people never learn to share (their boyfriends- JK) r316

I have COPD. I'm in the earliest stages. I took early retirement to care for my father who had dementia. He's gone. I can only work part time and I have had some health challenges the past year so I don't have anything beyond a pension Medicare and my SS. Income is around $3,000 a month. But I worry. I have very little saved and at some point I know my medical condition will definitely get worse and I will need extras and it will cost me. This is very concerning.

God bless, R333. If it isn’t too stressful, you might want to research it now, rather than when you are ill. And by “research”, I mean to identify the agencies that will help you. There are all sorts of government or nonprofits that exist just to help, so you’re not alone. You just have to find them.

[quote]My idea are homes for seniors who do not need assistance but don't want to live alone. They want roommates in a comfortable house setting.

Haven't you seen enough news stories of elderly people who kill over some perceived slight? They have reduced inhibition and they know they don't have much life left to lose. It's a recipe for disaster.

^Well, I don’t know about that, but they do get cranky. That’s what friends are for.

[quote]Haven't you seen enough news stories of elderly people who kill over some perceived slight?

I haven't seen that, but it sure puts "taking a shit in your co-stars dressing room without flushing" in perspective.

Does anyone know how much Social Security is taxed? Yes I could google it, but being financially retarded, I would probably get it wrong somehow. And anyway, one of the points of DL is to get good advice from people who've been there.

Certain states don’t tax it.

Depends what country you want to retire in! I'm saving to retire abroad. Retirement is about 25 years away for me, but I just love daydreaming about my future retirement and travel plans, especially while at work!

R338 - from Kiplingers, regarding Federal income tax on SS:

If annual combined income from all sources is between $25,000 and $34,000 on a single return or $32,000 to $44,000 on a joint return, then up to 50% of your Social Security benefits may be taxable. If your provisional income is more than $34,000 on a single return or $44,000 on a joint return, 85% of your benefits may be taxable.

You need to check if your state taxes SS, 401k disbursements, pensions, etc. Mine does not.

r287 if you have 1 million in the bank and barely getting by you are doing it wrong.

R287, using a simple compounded interest calculator, if you added nothing to that $1 million, in 18 years you will have doubled your money assuming a modest 4% annual interest.

Rate of return is such a wild card. As is your length of life. You will never know if you have enough - unless it’s over like $5 million. So do your best, live simply, save as much as you can - but don’t sacrifice your life today for the mythical “permanent vacation” of retirement. And don’t live your life in worry - you may never get there.

[quote] R5: I refuse to die without ever having enjoyed life

People who feel similarly need not “retire”. You should find work that you enjoy. Some jobs just suck, period. But other jobs can be fulfilling. You can actually look forward to going to work. It isn’t a black and white thing where work is always awful and lying around doing nothing is somehow good.

People NEED purpose in life. A lack of purpose is not a good thing.

My Grandmother “retired” at about 60, but then she ran “Ma Bailey’s Boarding House”, and was the midnight phone operator for Connecticut’s power co. (Yes, when had only one night state phone operator). She gave that up when she was about 73. But thereafter she always had a project. She painted. She had a perpetual yard sale. She gardened. She biked on a three wheeler. She checked her bank balance, lol. You need to keep busy and you need people in your life.

[quote] R338: Does anyone know how much Social Security is taxed?

Aside from the Fed’s, some states will tax it.

Massachusetts does not tax it. Florida does not tax it either. I don’t think FL has an income tax at all, to attract retires.

[quote] R343: [R287], using a simple compounded interest calculator...

You need to account for inflation. I use 7% earned, 3% lost to inflation, leaving 4%. Meaning that I have a net gain in buying power of 4%.

In the 1970s and 1980s, we had savings accounts paying 18% interest at best. My Gram was thrilled. But that must mean that inflation was near that. It’s impossible to plan for something like that.

[quote] R343: [R287], using a simple compounded interest calculator, if you added nothing to that $1 million, in 18 years you will have doubled your money assuming a modest 4% annual interest.

I think you can double your money every 7 years, if you’re moderately astute. Not counting for inflation.

R345 good point. So hard to find a job that’s is fulfilling nowadays. Corporate slavery or 24/7 tech or finance. So few decent work environments that pay a living wage. I like to teach but adjuncts get paid so little (less than $15k/year) I couldn’t afford to do it (never mind save for old age). Curious if anyone has found a job they love - and what it was?

R341, those SS tax rates you quote don’t look right.

R349: I was in computers. Once I confessed to my boss that each new assignment scared me. They always were presented as the most important thing in the world, and were typically presented as: “Find a solution to a problem that nobody here has thought of, yet.” My boss replied, “Yes, but that’s the fun of it.”, and she was absolutely right. Still, over years, it was so stressful, I left. The (traditional) sound of a pager still makes my heart skip.

“I know this is last minute, but something is always left to last minute, and this time, it’s this.”

Similar R351. Every new job freaked me out. I appreciated the problem solving - but it was always a major disruption to my life - get on a flight the following week to work on site for a month with tight deadlines. It got to a point where I would have a panic attack whenever a new job came in. I had to quit - I was a nervous wreck on Xanax and drinking on weekends. Now I’m trying to find something that is problem solving but without the panic and rush - ideally working from home. I just can’t spend the next 12 years in constant anxiety. Unfortunately I may not get it - or not pay enough to live in never mind save.

R353 similarly, I lost some of my eyesight and cannot do the job I was successful at any longer. I'm 55. So I got into real estate investing and like it much better. Keep your chin up.

Another time, we revamped our complete system over a three day weekend. On Monday, the stock markets crashed, and our system slowed to a crawl - not acceptable! We had a noon meeting. The boss decided to roll it back - go back to the old system.

I raised my hand and asked “We just spent 6 months working on this change. If we spend 6 hours on the ‘roll back’, what happens if we have to roll back, the ‘roll back’?” The boss shook his head like a cartoon character and said “ok, we stay”. It happens that all our competitors were slowed, too. Nobody was prepared for this, and our Tuesday was fine. I should have gotten a million dollar bonus right there.

Sorry for the tangent, but I have no one to tell this to...

During another Washington’s Day Change, my partners used the “bang”, “|” as a delimiter in their code. They inserted a bang after every data field to tell the computer that we were moving on to the next field. Like: “John|Smith”. I advised them otherwise, but they insisted. They ran a test on Friday on the millions of records, all of them, and it went well. Great!

The actually conversion on Saturday crapped-out almost immediately. I told everybody to chill for the moment. I discovered that in the previous day, for the first time in millions of records, someone entered “John|Mary” in a field. I changed it to “John/Mary” and we restarted, and all went well. How odd, about the use of that character, one that day. I should have gotten a million dollar metal for that, too!

Actually, this company treated me well, as I recall. I suppose they can’t give everybody a million dollars.

Thanks R354. How weird, I was thinking about real estate investing. But afraid it’s the peak of the market right now - so wary of jumping in now. But could,be a way to,generate a little income - maybe 2-3 apartment building. Then maybe a low paying job on the side. Trying to cut out all extraneous expenses - but health care and home maintenance always seem to blow my budget.

I'm curious how anyone over 50 in a desk job stays awake after 3pm.

[quote]I'm curious how anyone over 50 in a desk job stays awake after 3pm.

??? I'm (recently) over 50, but have no issues with staying awake past 3pm. Is this really an issue for some of you?

I was 26 in a desk job and would doze off in front of my computer. Thank God for walled in cubicles. I got so fat and depressed working there.

15 years later I work in Finance at a warehouse making almost double the money and get to spend some time driving a forklift. I'm thin and happy again.

No more cubicle desk jobs for me.

Ho R357 I'm R354. If you're in FLA and want to invest, start with a duplex. Each unit will typically have two 2 bed/1bath units with shared laundry and offstreet parking. Buy block, not wood, construction. Where are you located?

Here is a tip for anyone in the same boat as me. Retiring in April so I have been shopping around for Medicare Supplements. It's confusing AF! But I read an article which recommended using insurance agents in your state who specialize in this area. They can do cost comparisons using parameters you establish and will also research drug plans (Medicare Part D) which are based on the meds you take. Saves a lot of time and effort. The agent is paid a fee by the company and not you. All Medicare Supplement plans (F, G, N, etc) must offer the exact same benefits, but the insurance company's fees can vary widely. Link below for anyone interested.

And I had a rude surprise when researching costs. They base your Medicare costs on your taxable income from two years ago. Unfortunately for me, in 2017 I cashed in all accumulated vacation and sick days. That raised my income to the point it will raise my premiums while I start Medicare in 2019.

I thought you could retire when you were 67 or 70? Not than anyone will give you a job past 56.

I’m with the “how do you stay awake after 3” over 50 group. My public employee relatives are retiring at 55. That sound sounds about right to me. Except I don’t get a fat pension - so I’ll be working until I die at 67.

R362, your rate will go down next year.

I just turned 40. I have $45,000 in my 401(k), $40,000 in a savings account, $50,000 in credit card debt, and $55,000 in student loan debt (fixed at 2.85%). I make $85,000 a year and spend $3,200/month on debt + living expenses.

What should I do to turn this ship around and make sure I save enough to live in old age?

R366, Stop spending. That credit card debit must be awful.

R366, go to the link below. Create an account and ask your question there. Be prepared for some hard truths.

How can you take advice from a place that can't even spell moustache correctly?

R369, that website has been around for quite a while. I think it could help, r366.

...during which time, the spelling of moustache has changed.

Has anyone tried the FIRECalc site for determining if your savings will last? It tells me I would be more than fine to retire right now, which I would love to do, but I am so worried about messing up and leaving so much money on the table and then regret it later.

You’ll never have enough. Unless you eat ramen and work until you are 70. Thanks to the myth of the 401k “which will replace pensions” - thanks Reagan.

[quote] R366: What should I do to turn this ship around and make sure I save enough to live in old age?

Open a brokerage account. Such as at Fidelity. Leave your money in a money market fund. Went the Mueller report comes out, I think the market will drop. Then invest aggressively, suck as FOCPX. I think it will bounce back.

I’m not a pro, but this is about what I’m doing. There is money to make, the only question is “how?”

This is going to be a much different conversation after the market crash - which IS coming. The “guaranteed to increase” comments will become “I now have to work until I’m 70”. To adjust for a normalized rate of return vs the past 10 years, take your account and reduce it by 30%. If you can live on that, you’re ok.

Where do you hear about “guaranteed to increase”? Most investors know that there is no guarantee.

The poster with debt - you should spend all of your money you can getting that credit card debt down or gone. Student loan debt is what you call good debt because you can deduct the interest form your income. Make as many payments as you can against the credit card debt. Possibly look in transferring the debt to another credit card offering 0 percent interest for any number of months. That way you can pay down the principle. If you are smart you can transfer it a few times until you get it paid off. Second, stop using credit cards until you pay off your balance. Cut your expenses. No gym membership, no starbucks, no eating out. It will suck in the short run but once you are debt free you can live a little.

I was very aggressively invested. Then, I did mostly get out of aggressive mutual funds, because I’m older now. If I’m not too greedy, I think I can live on what I have, to age 90, or maybe 100.

Plus, I do expect a correction for the reasons I’ve listed before, so, it just made sense.

I don’t expect a “crash”. I think R376 may be overly alarmed.

I did mostly miss the January rebound, disappointingly.

[quote] At some point, I realized I had too much saved in my 401k for my age (50), so I reduced my 401k contribution until it was enough to get the employer match, but no more.

You can't oversave in your 401k. Even if you contribute more funds than are eligible for employer-match, you have access to the same investment vehicles that you do for non-retirement savings. The principal advantage of saving in a 401k is tax deferral. You will not pay tax on it today and it will be taxed in retirement when you are in a much lower tax bracket.

r366, what is the rate you are paying on the credit card debt? Assuming norms in regard to the interest you are earning on the savings account and the interest you are paying on the credit card, you'd probably be better off taking your savings and paying off the credit card debt. Us the amount you will be saving in interest payments to get that balance to ZERO in the next few months. Then Take the amount you've been paying interest every month and deposit it into your savings account. It wont take you long to accumulate a savings again. Freeing yourself from credit card debt is essential to accumulating money. The student loan debt isn't as toxic as the credit card debt.

Sorry - not “guaranteed to increase” - but “average returns are x%”. The averages we’ve gotten for the past 10 years have been artificially inflated - I think there will be a few years of negative returns to offset. So if you’re looking at what you have today, don’t assume a 4% -7% return for the next 5 years. I would actually assume a negative return.

[Quote) R377: Student loan debt is what you call good debt because you can deduct the interest form your income.

I don’t think student loan interest has been tax deductible since Reagan.

It might be a lower rate than other loans, though Mine were. But not tax deductible.

[quote] R379: You can't oversave in your 401k...You will not pay tax on it today and it will be taxed in retirement when you are in a much lower tax bracket.

Yes, you can. The glitch is that some people have done well, and are actually in a higher tax bracket in retirement.

When you are 70.5, the government requires you to withdraw from your 401k. The withdrawal amount is based on the balance, and your age. If you have too much, you’ll actually be in a higher tax bracket.

Hypothetically, if you have $1,000,000 at age 70.5, the IRS thinks you will live about another 16 years. They require you to withdraw $1,000,000/16 = $62,500. This sum, plus social security and other possible income (less deductions), puts you into a high tax bracket.

This is only for people who have done well, but it can affect the middle class these days.

R383, that's why I needed to switch over to contributing all of my money to a Roth 401(k) last year because it makes more sense to pay the income tax now versus later when my regular 401(k) mandatory distributions push me into a higher tax bracket than I have right now.

R379, I disagree. I think you can save too much in a 401k. I'm single, 66 and retiring soon. The RMD's (required minimum withdraws from the 401k) at age 70.5, combined with my pension and SS, will throw me into a much higher tax bracket. So I'm currently contributing only 6% to get the employer match and stashing as much as I can into my after-tax personal investments and Money Market. I'm delaying SS until 70 and will live off my after-tax investments plus pension from 67 until 70 rather than take withdraws from my 401k.

Student loan interest is deductible but there is an income limit. A few years back, I was getting the deduction but once my adjusted gross income crossed 80K or so, I got shut out.

Yes, R386, it was $80k where you were shut out completely. I never understood that income cap. I put myself through undergrad and graduate school. My parents didn't pay for it. After grad school, I was making over $80k in my first year so couldn't deduct my student loan interest.

Sorry if this is a dumb Q: my 403b is down for the most recent quarter but that's to be expected given recent volatility, correct?

R388, not a dumb question. Yes your returns are down for the quarter and may be down for the last 6 months. That's normal. You have to view your 403b as a longterm investment plan. The market will go up and down, but basically up over a long horizon. Don't withdraw the money until retirement. Let it grow and make sure you are reinvesting the dividends.

R388 here; I appreciate your response; thank you R389

[quote) R388, i agree with r389, and you may have recovered a good bit of it in January. There was a rebound.

In 2005, I lowered my 401k contribution to 6% so that I got the full employer match, but I had enough in my 401k at age 45., God willing. So the max sum depends on your age. The younger you are, the less you need in your 401k, because it should grow over the years and decades.

I'm 56, have $6600 income monthly from 5 paid off rentals worth about $800K. I have $700K in investments, generating $3K/month. So I'm living on $9,600/month and I manage the properties. I can save about $2K a month after all expenses are paid. Thoughts? I'll get about $1500/month at 62. And with my family history I can't possibly see 70.

Thoughts? I think you’re doing very well. You always have the property you can sell to use for living expenses if you ever need to, so if you can live on $9,600/month, which I could, you’ll be fine.

Thanks R394

Try not to claim your social security until you're 68. You'll get more.

I’m 60. I have $4,000,000. House is paid for. (included in the $4million). No debt. I worry that it’s not enough

r397 depends on where you live. I'm in the south and its cheap here.

R397, it’s 4 times “enough”. Stop worrying.

And back to all humble braggers - where ethese retirement threads always end up. I’m 51 and have less than $300k in 401k. And I’m doing better than most Americans. Kudos to all of you with more than $1 million in net worth. Congrats. But most of us don’t have anywhere near that.

R400 why so bitter. I'm not humblebragging. I'm asking for an opinion. You will reap what you sow, you bitter old bitch.

I worry too, but Ive talked to relatively frugal retirees who are shocked that they have so much left after taking out 4% monthly after retirement even after donating a good amount of their monthly income which they deduct anyway and because they dont get taXed as much. They wish they retired earlier. I suppose if you live the high flying life you will never have enough even if you already inherited 10 million, but if you live relatively simply, most people will get by. Worst case is moving to a lower cost of living country, maybe spain, portugal, eastern europe, costa rica. That isnt really terrible if you ask me.

R401 will die sad, and alone, but his death will make others happy. Thanks for being so considerate!

Posters upthread are correct that you have to consider your location and your anticipated amount of travel and activity. My elderly friends and relatives were active and traveling up to about age 75. From 75 onwards they really seemed to enjoy the creature comforts of home. By their early 80s most needed in home care and could only travel by car with a lot of planning.

Obviously everyone's situation is different.

[quote] R400 Bitter Old Bitch - “And back to all humble braggers - where ethese retirement threads always end up. I’m 51 and have less than $300k in 401k. And I’m doing better than most Americans. Kudos to all of you with more than $1 million in net worth. Congrats. But most of us don’t have anywhere near that.”

YOU are the target audience or my earlier posts, if you can put your resentment down and open your mind - Can you earn 7.25% per year? (I’ve done a bit better than that.) If so, you will double your investments in 10 years. That means you will have about 4 times as much at 70 as you do today, or $1.2 million, even if you do not contribute another cent to your account. Inflation will reduce its buying power, of course, but the point I’ve been making was JUST FOR YOU. If you contribute more than necessary to get your employer match today, you should consider reducing your contribution so that you get your employer’s match, but save no more than that. If you were saving more, this will give yourself a little raise in take home pay. A little bonus, for being educable.

Don’t forget to thank me.

R403 is terminal, but doesn't know yet.

R400, now do you get it?

Look. The best way to figure out whether "it's enough" is to sit down and determine your monthly expenses. Then add abut 10% to them. Don't skimp. Make sure you allow for emergencies like home maintenance and repairs, cars, health issues vacations, etc. So maybe you can ive comfortably on $6,000 a month. If you're 60 and you have $4,000,000 saved, give yourself 30 years. YOu can give yourself 10,800 a month to live off of. Plus Social Security or any other pensions or income you might generate. Personally, I wouldn't take all of that. I'd live on 7,000 and save the rest. Your expenses will increase as you age and you'll need it. Also you may face some catastrophic illness. So develop a budget and make sure it's realistic, meaning not too tight, and then stick to it.

I'm lucky I have a pensionthat comes with healthcare, and Social Security because I have less than $200,000 in savings. Much less.

I just don’t trust that I will get more than a 4% return. Maybe my timing is off. My big savings years tended to be just before the crashes - 2001 and 2008. I have basically made back what I lost - effectively zero return. I know I stopped taking risks in the past 2 years- but fear now is not the time to jump back in.

R410, go try the FIREcalc calculator. It looks at whatever length retirement you want and tells you how your money would have lasted over that time, even the depression. It's interesting.

I figure I will never be able to retire. I'm 60 now, and my take-home is $2k per month working 6 days/week in a restaurant. I'm living paycheck to paycheck now, and do not have an IRA.

My social security estimate is 1200/month, and I am hoping that Social Security will still be solvent in a decade or so.

That’s exactly what I thought R411 - thanks. “Averages don’t tell you much at all”. Basically it all depends on the starting point - as in the example of 1973, 74, 75. That is wha has happened to me. Which is why I get so frustrated by all the assumptions about a steady 7% return - or even 4%.

I am going to use this FIRECalc quote every time another person says “but you ALWAYS will have a good return over time”. I feel like so many people here are looking at the great returns they have gotten in past 10 years and saying “You’ll always make a good return in the long run”. In reality, it all depends on starting and ending points. If you put all your money into the market today, it is very possible you will be worse off in 5 years. So, no it doesn’t necessarily make sense to invest right now.

R411, R413, I’m R405. I also suspect that we’re going to have a setback due to instability related to the corruption in the Trump Administration. I can’t predict the future, but for my own finances, I moved from aggressive to conservative investments. Assuming the market has a correction, I may move funds back into more aggressive investments then.

I don't like to move my investments around, R414. It's too difficult to try and time it all out and too likely to miss out on a recovery. As I have invested more money, I've just been putting it into a tax-exempt municipal bond fund to take a more conservative approach over all.

How much $ do you need to humble brag on an anonymous discussion board?

R416, I would say $1 million, but $500k is enough if you say it with panache.

Oh, go on and take your WW, r417.

r412, I wish you luck...hopefully you can live with another person to share expenses.

R412, there is no financial reason that SS won’t be there for us. Unless we let them take it from us.

R417, Thank you, dear.

R412, my Mom lives on about $950 monthly from SS. She lives in a low income senior apartment which charges no more than 30% of her income for rent and utilities. The minimum age is 62. At 60, you can start looking around in your city and county for low income apartments and apply. The waiting list for them run into many years though my mom really lucked out and got in within months. I still don't know how that happened. Her neighbors think she bribed management--but I applied for her and I did no such thing. But yeah, better to start early.

My mother lives in $1,300/month. Lives in her own home where annual real estate taxes are almost $6,000. I pay the taxes - but she lives on the $1,000 including utilities, gas, food and all incidentals. A reminder that it can be done. And she is not unhappy.

So when I worry and stress that I don’t have enough money for retirement, I think of her. I don’t have any kids to help me out. But I have enough saved to pay my real estate taxes. So worst case, I’ll be no worse off than her.

The obsession with saving millions - which is great if you can - distracts from living today. Live simply and save as much as you can. But don’t let fear of the future ruin your present. Unfortunately, since the 401k was introduced by Republicans in the 80s, the US is now absorbed in being terrified that we won’t have enough to live on in old age. Unfettered capitalism needs to end.

To make your money last the longest (you may live another 30 years after retirement without an income), you should use no more than 4% of your savings per year.

That means, you will need $1 million saved for every $40,000 you use yearly.

Of course this could be supplemented with social security and pension money.

Studies are showing that baby boomer expenses aren't going down much after retirement as they are living more active retirements than their parents did.

That means we have to save much much more.

The general recommendation to save enough for retirement is to save 15% of your salary yearly.

That money can go into some combination of 401K, IRA, and personal retirement stock accounts.

That money should be put into the stock market index funds (maybe one Total US Market Fund, one International Market Fund, and one Total Bond Fund.

Dollar cost average your donations to those funds (as in, put in money once a month instead of one at the end of every year). This will allow you to be okay whether the market is up or down.

Sit back and relax.

I refuse to buy into the fear. Also on my fathers side, 5 out of 7 died of cancer before 70. I’m saving for 78 because I refuse to work in a miserable job until 65 out of fear - then retire only to get cancer a year later. I’ve seen to many guys put off happiness for retirement - and then either die before 72 or wish they had enjoyed their prime years more.

Great for everyone who has managed to save. And no one should spend recklessly . But do not put off happiness and living your life for retirement . It may never happen. And I am not working to give my money to charity when I die.

[quote]Studies are showing that baby boomer expenses aren't going down much after retirement as they are living more active retirements than their parents did.

Wait, it'll balance out. The dirty little secret no one wants to acknowledge is that retirement expenses are front-end loaded. The cruises that seem like fun at 65 aren't anywhere near as appealing at 70, and the very thought of them makes you tired when you're 75. Baby Boomers will be saying goodbye to swimming with the dolphins soon enough, and their expenses, non-medical at least, will start to come down from here on in.

[quote]for my own finances, I moved from aggressive to conservative investments

I absolutely did that as well. Reduced the contributions to the work 401K from 10% down to 5% since that's what the company matches, and put the remaining 5% into a separate Roth IRA with a conservative investment strategy.

Agreed r428, but think the timeline is off. Seems Boomers do really well until roughly 75 now, then start to slow down.

As long as we're talking investing ... I've just moved cash to equities because I've found over the years that stocks tend to do their best when everyone thinks they'll do their worst, and do their worst when everyone thinks they'll do their best. The reason I can retire safely is that I tripled my stock exposure after the 2008 crash, and it was the smartest move I ever made.

I’m only 52 and I’m already getting tired of traveling. I don’t plan to travel much after 65. I’m finding I love being at home, walking in nature and cooking. Adventure seeking is getting tired. I can’t imagine I will want to travel a lot at 65.

The one thing I will want is to go somewhere warm for winter. And I have a cheap condo in FL fo that. So except for spending maybe $1,000/year for flights back and forth, I am not saving for the mythical “fabulous retirement adventure” marketed by Wall Street. I’m saving for the basics. If I end up with more, great.

[quote]Agreed [R428], but think the timeline is off. Seems Boomers do really well until roughly 75 now, then start to slow down.

Yeah, I was being a bit pessimistic, but the point I was trying to make is that almost all the planning calculators use a straight line number like the 4% per year rule for expenses, which is absurd. They should acknowledge that you're going to blow through 20-25% of your retirement almost instantly on travel, that vintage Mustang you've always wanted, and all the other Wylie E. Coyote schemes you have saved up. Once you have all that out of your system the expenses come down as you wait to die by sitting in front of the TV watching Fox News.

"I’m only 52 and I’m already getting tired of traveling."

Same here at 54. I've been to almost all the places I wanted to visit around the world, and now travelling just seems to make me miss my dog after five days or so. I'd still like to go to Europe a couple more times, but I've lost interest in taking four planes to get to a safari or spending weeks in New Zealand. So I think my retirement travel budget won't be terribly high.

R433, lots of people get the Mustang, or Porsche, or whatever, in their 50's while still working.

[quote]Same here at 54. I've been to almost all the places I wanted to visit around the world, and now travelling just seems to make me miss my dog after five days or so. I'd still like to go to Europe a couple more times, but I've lost interest in taking four planes to get to a safari or spending weeks in New Zealand. So I think my retirement travel budget won't be terribly high.

Agree with R434. I'm 57. Did my fair share of traveling but in the last few years I prefer to stay closer to home. My last long haul flight was a 30 hour flight including plane changes to South Korea. About halfway over the Atlantic I realized if the plane had to turn around for some reason I would have been ok with it.

r436 that's so true. I was waiting in Customs and suddenly- I had to shit. Well too bad for me- just waited until I could get out of customs. I thought- God, I wish I was home!

[quote] Yes, you can. The glitch is that some people have done well, and are actually in a higher tax bracket in retirement.

[quote] I think you can save too much in a 401k. I'm single, 66 and retiring soon. The RMD's (required minimum withdraws from the 401k) at age 70.5, combined with my pension and SS, will throw me into a much higher tax bracket.

Gurls, this ain't f*cking "Lifestyles of the Rich and Famous." After 437 posts I am sure you understand that you are uniquely situated at DL and in the world. People in your tax brackets, or the ones you desctibe, do not seek financial advice at DL. Most of us have UNDERsaved for retirement.

The great majority of the posters and readers are never going to have to worry about living to 70.5 and having $1 million in a 401k. As a general rule, most people are in a lower tax bracket at retirement. If you are 50+ you can reduce your taxable income by up to $25,000 by putting it in a 401k. At that level, you might exceed what you can get in matching funds from an employer but there are still tangible present-day benefits to contributing the maximum -- unless you are a Kardashian.

R438, you don’t have to be fantastically wealthy to find this advice useful. In fact, people who would find this info useful are in that netherland where there is little financial advice out there. The advice you get by googling, saying to save as much as possible, is wrong in this case; and yet you’re really not wealthy enough to afford a good financial adviser. (Most FAs are going to tell you to save as much as possible, because they mostly deal with the person who hasn’t saved enough.)

If this advice is useful to you, it can save you many thousands, and when that day comes, God willing, if you hadn’t heard of this, you’ll want to know why no one told you about it.

A good example is R400, the [italic] other [/italic] bitter old bitch. [bold] He thought this was all just humble bragging - but this advice actually applied to him! [/bold]

So how about you STFU?

[quote] A good example is [R400], the other bitter old bitch. He thought this was all just humble bragging - but this advice actually applied to him! So how about you STFU?

No, ma'am. I will not. How about you limit your advice to that which would be useful to the other 99% of us and stop being a humble-braggart.

Yeah - R439. I’m sure you mean well - but the BIGGEST issue facing most of us is not how to invest or minimizing tax bracket effects but coming anywhere close to what we are told is needed for retirement. What we need more than invetsing and tax advice is a glimmer of hope that we will somehow be ok with $100,000 in our 401k. You obviously don’t have that issue - and are rightfully proud and content with your position. But you are not helping with your angry condescending attitude. Enjoy yourself. But many of us just need to know there are others in the same boat - 50s, working hard and barely getting by with seemingly no hope of saving enough for retirement no matter what we do.

This thread has finally devolved into the episode of Friends where Phoebe, Joey and Rachel (the "I can never retire" gang) are mad at Ross, Chandler and Monica (the "humbebraggers") for always wanting to do fun things that cost money.

If you're in you 50's and older- and un/under employed, you are fucked. Time to suck it up and realize it.

Question- can you still get your SS pension even if you retired in some far way land?

^^^ Yes, you can and many Americans do and it doesn't even have to be far-away - Mexico will do. BUT you still have to pay for Medicare (unless you decline to and I'm not even sure if you can and if you can it'd be a dumb idea*) which is deducted from the check before you get it. It's about $135 a month for most people as of this year. BUT it doesn't cover you outside the US. Meaning you'll need to pay more for insurance or care in this far-away land they're sending your checks to. I'm sure it's cheaper there but wonder if it's always better. My experience with emergency care overseas has been fine but I'm not sure how good or bad long-term care for chronic conditions (which 80% of retirees have one or more of) is in other countries - no doubt it varies - particularly those where English is not the lingua franca. Do you want to be in the hospital and not know what they're telling you? I was in the ER at the Charite Hospital in Berlin - one of the best in the world - once and it took them an hour to find someone who could explain to me what they were doing in English. I knew they were doing the right things, but it does matter to know what's happening when it's happening. Does to me, anyway.

* If you don't take Medicare at 65/66/67 (or when you retire and are dropped from your employer's coverage if you work past those ages), you pay a penalty with increased premiums for every year you're eligible but don't pay in. If circumstances required you to return to the US later in life (or even if you just were back here on a visit and got sick) and you hadn't paid into Medicare for coverage, you'd be screwed: either by sky-high premium costs or by having no coverage at all in the US. And the average total health care cost in retirement in USD is somewhere north of $250,000 pp. Non-US costs are lower, but they can't be that much lower for comparable care.

Let's talk about retirement and Gay marriage. As I understand it, each spouse is responsible for the medical care of the other, and there are laws that say that the couple's assets must be spent down to minimum levels before aid programs take over--basically aid only starts once you're broke. Is this more or less correct?

Since almost every couple will face a medical crisis eventually, what's the point of staying married in retirement? Why not divorce and divide the assets, sort of like the watertight compartments on a submarine, so when the first partner's health fails it doesn't bring down the second?

Ask a lawyer. Depending on the assets - pensions, retirement accounts, Medicare supplemental coverage, etc. - a divorced spouse is entitled to some of 'em.

But the premise is wrong. Everybody faces medical crises until the last and rather final one, but unless one of you needs long-term custodial care (meaning a nursing home you're not in to get better and be released from after a hospital stay) the financial scenario you correctly describe does not apply and when it does, the details of the "spend-down" vary from state to state. Some let you keep the house, or at least until both spouses die. But you're right: Medicaid - as opposed to Medicare - doesn't kick in until you've paid all but about $3000 in defined assets for the first couple of months or years in a nursing home.

Both of my parents were sick a lot before they died but after two heart attacks over ten years (a week or so in the hospital for each, then home) the stroke that killed him meant a one day hospital admission. My mom was sick for years - I think she was hospitalized 40 times in the last 5 or 6 years of her life - but likewise never went to a nursing home. Medicare and the supplemental medical care policy paid for everything.

You can still buy long-term care policies to insure against the cost of a nursing home stay but most people agree they're a total rip-off and even if you qualify, the premiums are outrageously expensive to insure yourself against the unlikely possibility of a long-term nursing home stay. Less than five percent of all those 65 and older end up in a nursing home until they die. Ninety five percent die at home or in a hospital.

[quote]You can still buy long-term care policies to insure against the cost of a nursing home stay but most people agree they're a total rip-off and even if you qualify, the premiums are outrageously expensive

Not to mention the fact that there's real doubts about whether or not some of the companies who sold them will survive long enough to pay off when needed. Most horribly mis-priced them when they sold them and never collected nearly enough in premiums to cover their costs. It's one of the primary things bringing down General Electric right now, but I think AIG and Genworth are also sitting on some nightmare policies.

R405, I do not think yelling at someone for not getting 7.25% a year is advice.

In fact, this whole thread has very little advice that most middle income people can use.

It is a bit nauseating to hear people complaining about only having hundreds of thousands saved, or being exhausted with traveling because they have been everywhere, when they ought to be grateful for having such good fortune.

Paid off real estate is peace of mind for retirement. Money goes a lot further if you don't have a mortgage payment or a rent check to send to a landlord every month. Yes, there are property taxes and maintenance on a home, but if you set aside $2000/year for those, and save it in the years that you don't spend it for a future emergency repair, you should be fine. I suspect I will only have $24,000/year or so to live on in retirement, but I own 2 homes outright (one will continue to be a rental when I retire), so I don't stress much about it. As others have said, write down your complete budget - what you spend on food, utilities (natural gas, electric, water, sewer, garbage), cable, internet, newspaper, entertainment, phone, medical, dental, etc, and then add $2-3000 to that for sundries and emergencies. In my profession, I can continue to work as long as I like (part of my work is self-employed) so I might never completely retire, but I'm hoping to work a good deal less than I do now when I'm 66.

"It is a bit nauseating to hear people complaining about only having hundreds of thousands saved, or being exhausted with traveling because they have been everywhere, when they ought to be grateful for having such good fortune."

Who says we aren't grateful for those things? I'm extremely grateful for my good fortune and good health that I was able to travel enough and have some money for retirement. Can't I also discuss my plans, hopes and fears here? Or can only one segment of the population speak on DL anymore?

The belittling of people who do not have the same fortune is upsetting.

Telling them to STFU because they do not make 7.25% is an appalling level of entitlement.

And I am frustrated because I worked in a field where one is on contract so there are frequent changes of employers.

Sure, R451, "but when you speak of us" - and you have - "please be kind"

^^^ Most of my savings is getting eaten up by fees that are more than the interest. I am thinking of closing out most of my 401ks, since half of them are losing money.

This whole system seems designed to make money for the finance industry on the backs of working people

R454 Then you're getting fucked over on the fees. Look at products, especially from Vanguard, that have exceptionally low fees and put your money in less volatile funds. And what are you losing money on? The S&P 500 went down somewhere around 18% between September and December of last year but it's made half of that back in January alone and likely - god willing - will be higher than the previous high (2940 or so) by the end of the year if we don't have a recession.

The stock market can be like a casino in that - short-term - there are winners and losers. Long term it fluctuates but overall goes up as the economy expands and dividends compound.

These are from jobs that I was only on for a limited time. I did not put in enough that the interest was greater than fees, and yes I am screwed over on fees. (None of them are Vanguard.)

In this gig economy, I suspect I am not alone. I wish I had just saved the money rather than losing it in 401ks. The problem in my field is that a job can last six month or a few years--but you never know. If the gig does not last longer than a year, any money you put in the 401k is essentially lost. I am left with the choice of closing the 401ks and paying the penalty or letting them ride and slowly dwindle. It would have been better not to invest.

I'm confused, R456. Are these gig employers contributing or are you only putting in your own money? Is there an employer match for contract work? I have no idea, having had only two employers in my life. Certainly the issues you mention can be true of employer plans, but why not open your own IRA? You'll lose the employer match if you get one, but putting your money into your own account allows you to find providers with low fees, choose your own investments - I'm not shilling for them but Vanguard has something like 190 funds and EFT's to choose from - and you still get a tax deduction up to the specified contribution limits. Again, no idea about the - presumably multiple - plans you've been in, but are there no options to either continue making contributions after you no longer work there or transfer what has been paid in into a plan of your own? If as you say these are all short-term gigs I think you'd do better with an IRA.

I'm sure it's terribly frustrating and I sympathize: I saw the value of my retirement account drop by a third in 2008 but it was back to its previous high point inside of a year and did almost nothing but grow since then until I retired in 2017. Likewise these days - I strongly feel the market will tank later this year as sooner or later investors will realize that Trump is effing everything up - and that it'll lose maybe 20% or more by this time next year. But I don't need all of it when I'll start taking money out in a couple of years when I have to (RMD's for me start in 2022) so I figure any losses now will be made up later. Perhaps as you say, it would have been better for you not to invest as you did, but like the disclaimers say, past performance is no guarantee of future results. Those future results could be worse (although the way you describe it I don't see how) but the results could be better, too. Invest - just don't invest the way you have been.

And don't listen to people if you don't like what they're saying or, as here, the way it's been said.

[quote) R446: Let's talk about retirement and Gay marriage. As I understand it, each spouse is responsible for the medical care of the other, and there are laws that say that the couple's assets must be spent down to minimum levels ...

I don’t know for personal experience, but I don’t think this is generally right. Medicare doesn’t have a a requirement for low wealth in order to collect; though Medicaid does. So, it depends if we’re addressing one or the other. They’re very different.

Most employers require you to be with them for a period of time before they contribute. So if the work keeps coming after a year or two you can get a employer contribution--sometimes retroactively.

I did not know about IRAs until the 2000s, so I stuck with the 401Ks.

These are employer based plans, with withdrawls from my paycheck, not individual IRAs so I do not see how I could contribute after leaving. Again, these are employer based 401ks which are not portable. If I would have known better I would just have opened my own Roth and all these small savings would have been consolidated in one plan. As it is, even when the market does well, the fees eat up any profit.

There are certain limits on IRAs such that you cannot contribute to an IRA when you have a 401k. Anyone affected should check it out. Your HR department would know, as would whoever you get the IRA from.

R459, 401k money can be transferred from one employer to another, if you want to consolidate, you can take the 401k money from the former employers and “roll it over”, it’s called, into the newer plan at your current employer. There is no tax due from doing this. This is especially useful if the newest employer has a good plan. Not advisable if the newest employer has a crappy plan.

Seriously, R460?

I managed a career move that let me stay with the same employer for 12years (after decades of never working one job for more than 2 years).

I never knew I could transfer the 401k funds. It never occurred to me that that was an option.

I guess I just have to negotiate with customer service at each of the 9 401ks to find out how to do this.

If you are right, this was great advice. I have discussed this over the years with a number of family and friends and the only I advice I ever got was to liquidate and pay the penalty.

From NerdWallet about what happens to your 401k when you change jobs:

Typically, you may leave your 401(k) in an account with your previous employer, roll it over to your new employer's plan, or roll it into a personal IRA account. Any of these options will not incur income taxes or penalties.

R461, there's no negotiation. Just tell them you want to roll over your 401K and want to know the steps needed. They can't say no. With 9, I would do it just so it's not so messy. I also would do it because you never know if any of those organizations will be around. I had one nonprofit closed down. Thankfully, they took good care to transfer its 403B program to another nonprofit org. Even so it was sort of a hassle and I had to ask my former manager to talk to a board member in order to grease the wheels. Once that board member talked to the HR department, everything went smoothly. But yeah, I would not want to deal with a similar situation if the handover hadn't been so smooth and I didn't have people backing my request. You don't want to deal with this situation 8 or 9 times over. Do it now while you can.

R450: " Yes, there are property taxes and maintenance on a home, but if you set aside $2000/year for those, and save it in the years that you don't spend it for a future emergency repair, you should be fine. "

Seriously? Where do you live? In rural Alaska?

Or is that a typo?

R463 here. Sorry, for context. I left Nonprofit A. It closed years later and it transferred its 403B program to Nonprofit B to administer. Many years later, I decided to consolidate my retirement funds. So by the time I contacted B, some time had passed and they didn't know me at all, etc. Most of the people at B didn't know about the transfer and only the lead HR person knew about it, etc. Once I got a hold of that person, the rollover was a breeze. You just have to fill out paperwork from the 401K plan that you want to rollover. In the paperwork, you indicate which 401K company you want to transfer TO.

On gay marriage - does a surviving spouse get any part of the dead husbands SS money? Even if I have my own SS? My mother never worked and got my Dads SS after he died.

There is no benefit to marriage for me - unless I get a bump in SS when my husband dies.

Wait R465, do I have to contact the companies I worked for? I know a few of them no longer exist.

I was hoping I could just start with TIAA since I have three accounts there. But at least one is from a employer that is no longer exists.

R467, yes, that was my experience. I only had 3 companies to deal with so it was fairly easy. One of the orgs got bad advice from their TIAA rep and made things difficult, but once I told that guy off and to not fuck with my retirement funds, again, things went smoothly. Maybe things have changed, but my experience was that I had to get the former employer to sign off on the paperwork. You can't just transfer it without their nominal involvement.

R468, if that is the case, I am screwed because over 20 years later with businesses going under and technology changes affecting record keeping at the ones that survive, it will be hard to get them to sign off.

I am hoping that since they are my 401ks that just dealing with the financial agents will be enough.

I kinda sorted out a "Golden Girls" retirement plan recently. I bought a pair of small semi-detatched houses with a good friend in a small city we both love, close to another good friend. We're letting the rent pay them off. So I've got my social network and accomodation sorted. I really think the social stuff is just as important as the financial.

R469 I’ve been watching your posts—it is absolutely your right to get the money that is yours in your 401Ks. The financial people will fight you because it’s lost fees for them, but they can’t stop you from taking your money, whether you roll it over or take the cash and pay taxes and penalty. It’s a pain to fill out paperwork but just do it so you have control. They have to sign off in the end—its your money!

R447/R448 you are misinformed re: long term care policies. My mom had Alzheimers, and once diagnosed - her LTC policy paid out $6,000 per month for her care until the day she died- over 4 years. She was also fully insured through the VA after working there 42 years. So they do pay off.

R461, good luck! Tell us how it goes, it shouldn’t be too difficult, I hope. There should be a trustee managing your 401k, if your company went kerplunk!

For the love of God, do not take payouts and pay penalties on your 401(k)! It isn't like businesses haven't gone under before with people still having money in their retirement accounts. If nothing else, start by talking to your current 401(k) carrier and tell them you have a bunch of other accounts you want to roll into their account and see what advice they can give you.

Even if you will never be able to save enough to truly retire, putting as much as you can afford in to your 401(k) is still your best bet. Besides not having to pay income taxes right now, the amount that you would have been paying in taxes is, instead, included in your investment money so you're making money on that money as well.

Up until I was 30, I had been putting 6% into my 401k. This was the max amount matched by my employer. Then I thought I’d never retire doing so. So, everytime thereafte, when I got a (yearly) raise, I added 2% to my savings, until I got to 10%. I can’t imagine saving 15% as recommended upthread. I had to sacrifice as it was. 10% was enough for me. You have to enjoy life, too. That worked for me.

R472 Happily, it worked for your mother. Sadly, you are misinformed. It may once have been helpful but now it's a crapshoot. While nursing home prices are expensive, the likelihood any of us will end up in one is about 1 in 25. More than one in 25 of us gets sick and needs expensive care, so health insurance seems like a better bet.

Read R448 and this piece from PBS:

And this one

And this one

And this one

And this one

I can go one, R472, and I hope now you're better informed. Remember what the stock brokers say: Past performance is no guarantee of future results.

R481 et al, this was 9 years ago. Not that long ago. It was $300 bucks a month. She paid into it from 60 until it was activated at age 79. She paid in roughly 70K and the policy paid out over $288K. So do the math. And you seem to have a lot of time on your hands. Perhaps someone you know was "burned" by LTC insurance. Back the fuck off, moron.

R482 Back the fuck off yourself. Public policy isn't based on what happened to your mother nine years ago. I have enough time (3 minutes) to attempt to educate you even if it is a wasted effort. The rest of us will learn something, maybe first and foremost that you're an asshole judging by your language and your assumptions. If you think what happened to your Mom a while back has any bearing on what people are deciding to spend money on today, you're also willfully ignorant. Not many people in this country had, much less have an extra $3600 a year today to pay for something there's a small chance they'll ever use to companies that leave them high and dry when they go out of business or raise their rates - as the articles you didn't read detail - to the point where they can't afford the premiums and lose everything they've paid in up to that point.

No one I know has been burned by LTC insurance because they - and most Americans - are smart enough to know what a shitty deal they offer. And don't call someone else a moron before looking at yourself in the mirror.

R483 your use of "fuck", above, shows you to be ignorant and useless. I hope you die painfully, and soon. You motherfucking asshole.

You two need to settle down.

I’m one of the lucky ones... I paid off my mortgage and was able to put away 15 percent in my 401k most years. But I’m very worried about medical insurance and the uncertainties of it. Illness is the great equalizer.

R484 Did you buy the same kind of policy your mother benefited from?

R487 I have a LTC policy in place.

R488 Chances are you'll need it.

R489 you're a cunt and a dirty pig fucker. You'll die soon, too. CUNT.

Ok, everybody calm down. You should not be surprised that other people have a different opinion.

Is it the same lunatic who keeps getting worked up and calling people bitch and cunt for having disagree with him? I’m thinking he’s a case study of what NOT to be in old age. Financially savvy and possibly well off but miserable and unhappy. Maybe because he wasted his life planning for old age - and realized he should have spent more time enjoying life and putting off happiness until it wasn’t possible anymore,

R492, see R491.

R492

Yes

A couple of folks getting all hot under the collar about LTC insurance. It's the DL.

I’ve had LTC insurance since, maybe, 2000. It’s $1400 a year now. I wonder if I’ll ever use it?

R492 Don't be too hard on him. He carries a terrible burden and may indeed be the exception to the rule that LTC insurance is a ripoff. From the American Academy of Neurology:

“[bold]It is estimated that people who have first-degree relatives with Alzheimer’s disease are four to 10 times more likely to develop the disease themselves[/bold] compared to people with no family history,” said study author Robyn Honea, DPhil, of the University of Kansas School of Medicine in Kansas City.

For the study, 53 dementia-free people age 60 and over were followed for two years. Eleven participants reported having a mother with Alzheimer’s disease, 10 had a father with Alzheimer’s disease and 32 had no history of the disease in their family. The groups were given brain scans and cognitive tests throughout the study.

The researchers found that [bold]people with a mother who had Alzheimer’s disease had twice as much gray matter shrinkage as the groups who had a father or no parent with Alzheimer’s disease.[/bold] In addition, [bold]those who had a mother with Alzheimer’s disease had about one and a half times more whole brain shrinkage per year[/bold] compared to those who had a father with the disease.[bold] Shrinking of the brain, or brain atrophy, occurs in Alzheimer’s disease."[/bold]

From Healthline.com "Extreme swings in mood and personality may occur. A noticeable change in moods may include: confusion, depression, anxiety (and) fearfulness. You may notice that you or your loved one is increasingly irritated when something outside of a normal routine takes place."

When challenged, he responds to contrary evidence with name calling. He extrapolates personal experience as if it were universal. He seems very rigid in his thinking - any disagreement results in a violent, angry outburst. From his posts one might reasonably question if we're seeing the first stages of the illness here on DL.

[quote] R486: I’m one of the lucky ones... I paid off my mortgage and was able to put away 15 percent in my 401k most years.

That doesn’t really sound like luck. It sounds like hard work, sacrifice, perseverance, and planning. I’m sure it didn’t happen all by itself. That would be luck.

Oooh, r489. You are a true bitch! lol.

r464 I didn't realize how that sentence could be read several different ways. I meant $2000/year for repairs/maintenance savings. Property taxes are so different from state to state, there's no way to throw a figure out there for them. In my state, property taxes about 1/100th of the value of the home. So a $200,000 home would have property taxes of about $2000/year. In my state I'd have recommended saving $2000 for repairs/maintenance and setting aside another $2000 for property taxes. (Maybe an extra $1000 just to be safe), but that wouldn't be the right figure for a lot of other states Out of a minimum yearly income of $24,000 or so (in retirement) that would be a substantial chunk, but nowhere close to $12,000/year for a mortgage, or $12,000/year for rent.

R500 - doesn’t work in northeast suburbs. Property taxes are $12,000/year. Better off selling the house and renting. I don’t want to get old or die with my money tied up in a house.

Yes, I can see how in high property tax states where even average houses are $500,000 or more, my solution would not be the practical one.

r491, the guy at R489 is off being a real pill in other threads, too, so I don't think this is a case of two people simply disagreeing. We have some DLers who like to turn everything into a better-than-thou bitchfest, and he seems to be one of them.

Much of the advice here has been very helpful, cranky trolls notwithstanding.

With regards to past employers with whom you had a 401k but who went out of business, see attached article.

"What happens to my 401(k) account my company is going out of business? Don’t worry, your account is protected if your company goes bankrupt or is bought by another company."

R503 -- how do you know that a poster is being a pill in other threads? Can you share some DL knowledge with the rest of us please?

How could he not be?

It's your money, there's no doubt about it. If the company has gone out of business, it's just a matter of sorting out the paperwork, but that money is yours no matter what. It's just that it may be a bit of hassle to roll over the money. But better get it done sooner rather than later. Get on it.

401k money is unusual because it is strongly protected. You can't lose it in a law suit, for example. IRA money, too.

The dude above should get his money and consolidate into his 401k or into a Roth, are my thoughts.

FYI, if you consolidate into a 401k, and years later want to take some money out, either to rollover elsewhere, withdraw, whatever, your 401k manager actually is seperately keeping track of these different sources of money, if it mattes. You can grab just the money from just one former employer, for example.

I was able to grab after tax money I deposited years earlier, for example.

Don't worry everyone if you don't have a million saved. 33 % of Americans have only $5000 saved for retirement. We will rise like Zombies and eat the rich and live well for ever.

both my parents are each leaving me about $1 million a piece, so that is my retirement. I am 52 and have nothing saved for retirement. I made some investments in biotech and lost. But I am able to make a pretty decent income on my computer at any location. I bought an RV and travel around for part of the time. I sometimes stay in the Keys with my BF. Life is good. I am not worried.

R510 and R511 = the most accurate descriptions of the average persons retirement savings. The million dollar plus savers are the outliers.

One thing that many advisors forget to tell their clients -- you'll have to pay capital gains taxes on stocks you sell when you retire... In my case, I have perhaps, over five decades, $500,000 worth of gains. Those gains are not tax-free.

R513 does that include 401k money from stocks?

No R514 - that’s the point of 401ks - no capital gains. But you pay income taxes on whatever $ you withdraw.

R515, R514, income taxes are worse, for me, anyway, than capital gains taxes.

I’ve been moving some money out of my 401k into a Roth in small tranches for a number of years, but I have to jump through hoops to do so, some years. I’ve been resigned to paying 15% income tax on it, while the LT Cap Gains rate is 0% in my bracket. That’s been a kind of secret, that you do pay taxes on 401k withdrawals in your dotage, and it might not be low, like they tell you.

I am adding this with the thought that it might be helpful to a few gay same sex married couples. shouldn't matter if you are males or fraus. Here is my story: My husband died AT AGE 62, Had a vice presidetial salary. I am ten years younger than he was. As a widow I was allowed to start taking my social seurity based on his much higher earnings. Only requirement was that we had t live together for ten years which we had. I collected my late husbands SS benefit at a somewhat reduce rate . When I turned 70 took my benefiits on my own earnings and got alot more, Ifc

call the local ss office

R517, thank you, frugal ford. I think SS gets complicated when one is married.

Has that much time allapsed since Gay marriage was recognized? Oh, Lord, I guess so, but seems quick!

Thank you R517!! That’s the question I asked upthread. A critical decision point on whether we get married.

So - you started to collect his SS when he died? Or when he would have turned 65?

What % of his SS did you get? And it doesn’t impact what you get from your own SS? So, as an example you get 50% of his PLUS 100% of yours?

You had to be together for 10 years - including unmarried time? How do they know that if you weren’t married?

I appreciate it R517 - or whomever can reply. Critical element of retirement planning,

I'm not R517, but my mother collected SS based on her millionaire ex-husband's earnings while he was still alive.

That’s weird R520. I’ve looked online and there really isn’t a good description. And the stupid SS statement that I receive every few years is worthless - as it makes assumptions about future income based on what I made in the past.

Good move R516 Roth IRAs are the best investment if you want tax free money in retirement. I did this 20 years ago when Roths were first introduced what I put into my Roth has more than tripled in value and is completely tax free. It is also not counted when the IRS calculates you minimum withdrawal from you IRAs when you reach 70.5 years of age.

R522, that last sentence is news to me and interesting. Let’s hope they don’t renege on it.

If your roll over your 401K to an IRA you don't pay taxes.

R524, true for a “Rollover” pre-tax IRA. If you then move it to a ROTH IRA, called a “backdoor conversion”, it is taxable.

(R49) Talk to me after you have had 2 broken hips and a total hip replacement. get your traveling out of the way while you can still walk comfortably and make it around quaint cobblestone streets. In other words prior to 75.

R49 that sounds kind of like a sad existence for a gay man. But, to each his own.

For a normal sort of upper middle class gay couple, I've always heard that you need $2 million per person. So that's what I'm personally going for - $4 million for both of us.

Wow, R528, you sound like you’re doing great!

All depends on life expectancy. I just found out I have a gene that gives me a very high chance of aggressive cancer early - which is consistent with everyone on my fathers side. So I’ve now decided I’m not slaving away until 65 to save $2 million. If you have good genes and a family history of long life, makes sense to work until 65 and save a lot. But if I have a greater than 50% chance of dying before 70, I’m not wasting my time in this miserable corporate job saving for retirement.

The goal is to die with $100 left - and maybe a bunch of credit card debt. (after prepaying for the burial). Dying with money in the bank would be a waste.

I'd like to have something to leave to my nephews. They will desperately need it because future generations will not be able to live comfortably on less than six figures a year. Otherwise, I'd like to retire early and don't expect to have longevity. Neither of my parents made it to 75.

The Australian pension is about $19,000us and we have a public health system and a compulsory retirement savings plan (median balance of about $170,000us). That seems to do most people pretty well. As long as you own your home or have affordable rent then pension covers your basics and retirement savings covers the extras.

Note - The Australian dollar goes up and down like a yoyo, so I've used purchasing power parity from the big mac index to convert the currencies.

My elders lived to 90-96, except my mother who died from a smoking related thing, COPD, at 86, and I don’t smoke. So, I have to plan for 100 to be safe. Not my preference.

Thanks R532 for giving perspective. In the US, anyone with less than $1 million for retirement is repeatedly told they are going to end up homeless and broke and they need to work until they drop to make sure they have “enough”. It just makes everybody vaguely anxious and worried about the future and justifies staying in a miserable corporate slave environment until they die of a heart attack at 66.

My 85 year old mother lives in the US on less than $22,000/year - and has for 20 years. I pay her real estate taxes on her house but she lives fine otherwise. Medicaid/care for those over 65 is as close as we get to socialized medicine - and from what I’ve seen, it’s pretty good.

R528, how long will you have to work to reach your goal of $4 million?

A 4% withdrawal rate will give you $160k plus you will both I assume get social security. That will put you over $200k per year.

We have no mortgage or any other debt and not yet spent $100k in any of our five years of retirement. We are going to Europe for three months and taking a cruise there and back this year, plus we just spent six weeks in Palm Springs. I don't think we will spend $100k again this year.

I will be 62 this year and am starting to feel new aches in my body. It isn't just about how many years you have left to live, it's also about how many healthy years you will have.

I really believe that after multiple threads, with this one at 535 replies, the topic has been pretty much exhausted.

The vast ‘fear of retirement conspiracy’ was created by financial institutions and advisors to guarantee many years of income from passive investments.

When people move from spending and creating debt to saving and reducing debt, the banking industry changes their tune to make money from their accounts. That means scaring the shit out of people and creating “products” that clients buy.

This whole thing is analogous to the diet industry. There will be dozens of plans that you spend good money on that ultimately tell you the same thing: consume fewer calories, and expend more energy.

Money is exactly the same. Save more and spend less.

I’ve had 3 different financial advisors, a couple of great CPAs, as well as an estate planner. My initial instincts as I bagan saving and all of their advice over the years wasn’t all that different. Their best help was alerting me as tax codes changed, or legislation opened new avenues for saving.

Other than that they simply collected fees on transactions and a percentage of my wealth.

Don’t become terrified by the clickbait from the banks trying to get a percentage of your portfolio. Be practical and calm. People all over the world have lived to happy old timers without 10 million dollars in the bank.

After all of my worrying about the future, my current advisor recently told me to calm down. I’d be set until I was 150, regardless of any economic fluctuations. After 30 years of being scared shitless that I’d die broke, the person taking some of my money took me aside, winked, and pretty much told me it was all a game.

While I agree to some extent, r536, I think the difference from prior generations is (1) the cost of medical care, and (2) average life expectancy increasing. Naturally, if the average life expectancy age is 3-5 years older than it was a generation ago, it makes sense that you would need an additional $100-200k set aside. And while most costs have increased incrementally over the years, the cost of medical care has skyrocketed so insurance premiums (for Medicare Parts B & D, and Medicare Supplement plans) are forced to keep pace.

Agree R536. When the Republicans provided an alibi for companies to ditch pensions by letting them offer 401ks (I.e., just letting people pay for their own retirement), they handed a huge gift to Wall Street that continues to feed them to this day. By preying on the newly created fear, Wall Street has become as necessary as the grocery store. The beginning of the Hypercapitalism that has rotted out the core of America.

Don’t spend, don’t buy into the consumer model of life and save as much as you can. But don’t waste your life in fear. You may never get there.

R536, why don't you hire a financial planner who will charge you by the hour instead of paying a percentage of your assets?

The safe withdrawal rate is 4%, if you are paying 1% you will be giving up 25% of your gross income in retirement. If you've been paying that all along then your portfolio is way less due to the lack of compounding.

Have you checked out the bogleheads website?

OP was just waving his million dollars in front of some DL twink ass. It isn't gonna work, gramps.

R539, your comment addresses an aspect, but not the main point of my post. I have utilized every type of compensation for wealth managers, as well as trading on my own.

The gist of my post is that the general public is being scared into transactional retirement relationships that benefit big banking. And I’m sure that there are bank trolls on threads like these that reiterate marketing talking points.

R541, a lot of financial planners pull the same trick. The more you save the more they can make by charging a percentage of your assets.

The gist of my post is that people stay in the workplace much longer than they'd have to by paying a financial advisor a huge sum of money instead of investing in a couple of low cost index funds. Investing doesn't have to be complex.

BTW, if anyone is using Edward Jones they are being ripped off big time.

[quote]BTW, if anyone is using Edward Jones they are being ripped off big time.

Many of the big companies that manage retirement assets will always tell you that you need a million+ in savings to retire part of the reason is that these companies make more managing a large portfolio. There are many people in retirement with small portfolios who are doing ok.

We have had 543 posts, and nobody has actually said anything new that couldn't be covered in about 5 posts or less. The rest are just repeating the same thing over and over and over. Let's move on.....there is nothing more to say on this topic that hasn't been said upthread.

But how will we humble brag about how much money we all have????

Thanks for the helpful info. Be realistic about how much travel you will be able and willing to do after age 75. Also consider if your home will be paid for , how much taxes and repairs will cost, and how much "stuff" you truly need verses services you may need: groceries delivered to your home? Prepared meals? Light housecleaning? Snow removal and lawn mowing?

So few people have a few hundred dollars saved for an emergency let alone $1 million for their retirement.

Any further advice on long term care insurance?

R544, or you could just block the thread so you don't see it anymore instead of trying to control the rest of us.

Thank you, R547!

It was merely a helpful suggestion R547.

It's my *fantasy* that anyone who has worked full time for 30 years could comfortably retire with full Social Security and Medicare benefits at age 50 if they wanted to in order to fully enjoy travel, hobbies, higher education and volunteer work.

No need to drop dead from stress by age 70 because of financial necessity.

If you enjoy working you could continue to do so with a mandatory retirement age of 70. You could continue to work part time after that as long as youd like.

This would open up lots of full time jobs with benefits because people wouldn't be forced to work until they are 70.

Again, it's just a fantasy but I was under the delusion that in modernity we would be so productive and efficient that we'd only need to work 20 hours a week. Oh my sides!

Research the economy of Greece over the last decade or so R550. That is why it doesn't work.

So much of the talk about retirement (here and elsewhere online) is about financials. As someone who may consider retiring in the next 5-10 years, I have other questions. (Should I start a separate thread?)

1. Your network of friends - did you find your social network changed? If you're retired and your friends are still at work, were you spending time with other people? If so, how did you make those connections?

2. How did you spend your free time? I typically work 50+ hours a week, so I'll certainly have free time. I barely get time to read anymore, so that's one hobby I want to resume, but how else do you spend all the free time? Did you take up new hobbies?

I'll leave it there for now, although I could go on. Is there any interest in discussing the other aspects of retirement?

R552, I retired about five years ago when I was 56. My spouse retired a year later.

We had commuted about an hour to work, so we didn't have a large social network. About three years before retiring we moved into the city. I joined a meetup group that centered around hiking and backpacking and made a lot of friends that way. My spouse has a lot of friends that are former coworkers.

I have not been bored for a minute. I now have time to go to the gym, cook, clean, hike, bike, backpack, surf the net, read. We have been traveling a lot too. i love being retired.

There is a great website on early retirement that you might enjoy, I'll link to it.

I have decided at 50 to retire for now - even though I don’t have enough money to live for more than 10 years. I want to enjoy life while I can. Seeing Luke Perry and friends who have died before 60 reminds me I don’t want to put off enjoying life until it’s too late. Of course, that means living in fear of being broke at 70. But that is the reality of US capitalism in 2019. I’m going to blow some saved up frequent flyer miles and travel this spring and summer. Then at 52 I’ll think about working in a low stress job - if I can find one.

[quote] While I agree to some extent, [R536], I think the difference from prior generations is (1) the cost of medical care, and (2) average life expectancy increasing.

And most significantly the elimination of fixed benefit pension plans. My mother was a schoolteacher who received $5500 per month in pension benefits until her death. She had modest savings but lived very comfortably without ever touching her savings for 18 years of retirement.

R554, that's wonderful that you will enjoy life while you can. I'm hoping to 'retire' at 59 in a few years - I'd like to take some time off, even if I decide some time later to work part time or in a low stress job just to increase my financial stability.

I saw an article about people taking “sabbaticals” more now - realizing they will likely have to work into old age. Seems healthier than the “work til you drop” at 65 retirement plan.

Except for rich people, it seems most guys in my blue collar town die before 70 - with a surprisingly large portion who die in their 50s. When you read The NY Times obits, everyone is 80s+. But I think that’s reflective of wealth and good medical care - and probably taking good care of themselves. But in average-town USA, guys don’t live past 70 very often. I am not an exerciser and probably drink too much. Combined with strong cancer genes, I’m not counting on making it past 72.

Anyone out there with other thoughts on this?

R557, in the US the risk of taking a break / sabbatical in your prime is going back to work afterwards and picking off where you left off. Most companies would need to backfill your position when you left and few could guarantee you the same or similar position when you return. You could potentially lose your seniority, vesting, etc. Even if you don't return to the same employer, getting back into your field as an "older worker" means you could be competing with younger talent willing to accept lower earnings. And there is the issue of providing your own healthcare insurance, paying your bills, etc. while on sabbatical. Guess it all depends on your field of work.

I’m in healthcare so I look at things differently. I see otherwise healthy people die every day from unforeseen injuries. I recommend you live your life and don’t worry because worry will only make you stress, which contributes to poor health. It also helps that I have $1.8 million in my account from inheritance.