Seems like many people severely underestimate what they'll need for retirement.

[Charmonium]

Depends on your lifestyle and cost of living. If you're still going to be paying rent for the rest of your life, then I hope you have a lot more saved up. But, really, your budget is usually a lot less after retirement.

It depends on where you live. Around here, my property taxes are almost as much as I would pay in rent for a one bedroom. And while I have a lot more space, I also have a lot more work and expenses. I'll probably spend $5k just on masonry work I need done. And that's just this year. If it's not the masonry, it's the yard or the roof or the hot water, or god knows what else.

I was happy in my apartment and I had a good deal. I don't know why I ever decided to leave. The american dream of a single family house is a lie.

 

[Ns1]

As long as I got a few dollars left for bullets I'll be a-ok.

 

[foghorn67]

A dollar a month sounds okay to me.

 

[Imp]

As long as I got a few dollars left for bullets I'll be a-ok.

I can think of a few "free" methods...

 

[Yakk]

Yeah, it doesn't add up... lifespans are just potentially too long now.

Unless... you have the chance to be in one of the awe inspiring near limitless Government retirement plans, THEN a lifespan is too short.

 

[Herr Kutz]

I've calculated that I will need about $7,000,000 at the time I retire.

 

[brianmanahan]

i'm shooting for 1$M by 40 and 1.5$M by 45. with side jobs and pensions and SS, that should be enough for me for the rest of my life.

i'll have to live cheap though. it's a good thing that posting in brag threads is free.

 

[PowerEngineer]

I've calculated that I will need about $7,000,000 at the time I retire.

I think anyone in their 20's should have a figure like this as a target.

Using the rough rule-of-thumb that you can (somewhat) safely withdraw 3%-4% of your nest egg each year in retirement, you'll need 25 to 35 times your annual salary to maintain your pre-retirement standard of living (NOT just 6!). That means that a household earning $100k/year needs $2.5M-$3.5M retirement nest egg. And that doesn't take inflation into account.

 

[brianmanahan]

you'll need 25 to 35 times your annual salary to maintain your pre-retirement standard of living (NOT just 6!).

the multiple is 25-35 * cost of living, not annual salary

 

[Jadow]

I'll have a good amount of money saved up, but I expect to live cheap in retirement. House will be paid for, we don't like to travel, pretty ho-hum quiet life.

 

[CFP]

I'm 28, have only put away 200k in savings, and am still renting.

I think retirement for me is going to mean moving to a poor country where my money goes farther.

 

[sportage]

Well, pensions use to be for life, if you were smart and lucky enough to have one.
And social security will most likely no longer be an option for those under 50.
And BTW, when republicans say they want to "privatize" social security but those over the age go 55 or those currently now collecting SS would see no change, DON'T BELIEVE THAT.

If republicans privatize SS there is absolutely NO WAY a dual SS system could exist.
All would either need to be privatized, or forget about privatizing and just keep everything as it currently is.
But promising people over 55 that nothing would change, or telling those currently collecting SS that nothing would change for them is an out right republican lie.
If they got their way and did privatize SS, everything would change, for everyone.
All SS funds would need be turned over to the market, privatized, and there would be no if's or and's about it.

Back to the subject....
There is no way anyone could "plan" for retirement when their future relies on the crap shoot of the stock market.
One could plan and plan during their entire employment years, stash money into their 401K's, assume they would be just fine come retirement age, and with one single swoop their entire 401K retirement savings wiped out. An entire life of planning, vanished in a single day.
THAT is privatized social security. But the terms "social' and "security" would no longer apply.

So, how does one plan for retirement?
Considering SS probably won't be there and even of it was, that would only insure living below the poverty level.
And the 401K plan?
The problem with that is greed. Your retirement nest egg controlled and managed by the greed of others. If they become desperate and crash your financial future, all of it, they wouldn't care. We would simply experience 2008 all over again.

Most peoples retirement consists of social security, a 401K plan, and for a few a pension.
Take away SS, and if a pension does not apply, your left with noting solid to rely on.
Pensions can go bankrupt, and stock markets crash.
And not many people have a stash of cash hidden under their mattress, buried in the back yard.
For most, retirement means social security and their 401K plan.
Option three might be investing in jewelry or rare paintings. Hoping that would get you somewhere.

 

[guachi]

OP, your math neglects the fact that the money you have saved for retirement will earn interest.

At a measly 4% rate of return, which should be easy to do, with $200,000 saved would give you about $12,000 per year for 30 years or $8,000 port year forever.

 

[skull]

i'm shooting for 1$M by 40 and 1.5$M by 45. with side jobs and pensions and SS, that should be enough for me for the rest of my life.

i'll have to live cheap though. it's a good thing that posting in brag threads is free.

I've seen you bragging before, its awesome man. I just turned 31 finally opened a sep-ira with 1k. My goal is still to have 3-4k in passive income a month by the time I'm 40. I live super cheap don't need anything fancy, 3-4k a month I'll feel rich.

Your up in dayton right? You should invest in real estate with me. I'm going to do a few flips with my heloc and cards, to get enough cash, then the plan is buy shit holes with the cash(I want my primary paid for not 2 loans on it), rehab em, rent em, refinance, repeat. I've been a contractor for 6 years in construction for 14 l'll always be learning but there isn't much I haven't seen and done with a house. With the money you have to invest we could go make some great things happen.

 

[Kwatt]

OP, your math neglects the fact that the money you have saved for retirement will earn interest.

At a measly 4% rate of return, which should be easy to do, with $200,000 saved would give you about $12,000 per year for 30 years or $8,000 port year forever.

I have been and will continue to transition my savings to "Dividend Champions and Aristocrats". Spend 90% of the dividends and reinvest the other 10% to help cost of living increases.

DRIP plans. Are wonderful.🙂

I do not own a dividend ETF (yet). They did not exist when I started (90's) or I was not aware of them. If I where starting from scratch right now I would put 30-50% in something like SDY and reinvest 100%. With a ~3% return and a good chance it will increase every year. I may put some in it soon.

.

 

[Exterous]

This is why I don't think SS will go away - too many people will need it. It might not be exactly like its current implementation but there is more of a chance of it existing than going away

DRIP plans. Are wonderful.🙂

Heh I was surprised to see how wonderful bond funds are right now. Mine are up 6-7% YTD 😱

:thumbsup: diversifaction

 

[brianmanahan]

I've seen you bragging before, its awesome man.

lol thanks. i only try to do it in the appropriate threads, and not too much. of course there are guys here who probably hit a million by 30, and then we have anand himself.

I just turned 31 finally opened a sep-ira with 1k. My goal is still to have 3-4k in passive income a month by the time I'm 40. I live super cheap don't need anything fancy, 3-4k a month I'll feel rich.

sounds like a great plan, especially since you have experience with construction. putting sweat equity into fix-up housing is a great plan with potential returns much higher than index funds like i invest in.

Your up in dayton right? You should invest in real estate with me. I'm going to do a few flips with my heloc and cards, to get enough cash, then the plan is buy s**t holes with the cash(I want my primary paid for not 2 loans on it), rehab em, rent em, refinance, repeat.

nah i'm all the way up by the lake. i may do some real estate investing with my dad in the future (since i SUCK at fixing stuff but he doesn't), but for now i'm just content with stocks and bonds. i'm looking forward to your posts about the experience though! hopefully you can get some good properties and get a nice self-sustaining real estate portfolio going in just a few years.

 

[JEDI]

Even that six times your income figure seems low to me.

In fact, it seems incredibly low. They say that you should withdraw 3% per year in retirement. With only six times your salary saved, that would provide 18% of your annual income each in retirement.

lol @ 6x your pretax salary in bank = retirement?
I could easily retire NOW at that rule of thumb.

fidelity recommends 10x your salary:
https://www.fidelity.com/viewpoints/retirement/how-much-money-do-i-need-to-retire

don't know if is an actual researched # or an easy to remember marketing # for the typical american.


and I'm aiming for a safe retirement withdraw rate of 4%.

 

[Engineer]

My wife and I will have small pensions (size depends on when we take them), SS (which will be around in some fashion regardless of the rhetoric) and retirement savings. Not exactly where I thought I would be at this point in my life (great recession didn't do any favors not to mention that the market has really been range bound for several years). One more child to get through college (starts in two years and hopefully done in four years after starting). Home paid for.

I look at the amounts in the accounts and it scares the hell out of me as it always seems so low. Then I read stories of what the average household and my view changes. Not sure what the hell a generation (or more) of people are going to do as they simply don't have enough money to save the required amounts, will likely face reduced SS, will have skyrocketing medical costs and will likely have NO pension.

1st generation in US history to have lower standards of living than their parents....

 

[Sonikku]

http://www.investopedia.com/articles/personal-finance/011216/average-retirement-savings-age-2016.asp




I had a talk with this guy and we got on the subject of retirement. Now, this guy is in his mid-late 40's. He told me that he has $200k put away and that he could leave work for good. I don't know if he realizes that if he leaved the workforce at 50, he could possible live for the next 30-40 years. How the hell do you live for the next 30 years on $200k? That's $6,666 a year! Even with social security it's not enough.

Even the link I posted has it all wrong. They claim that if you're able to save $360k by the time you're 60, you are doing awesome. But, if you were to live for another 30 years (60-90), you're going to be living on $12k a year! Even with social security you're going to be eating dog food.

What About:

1) The high cost of living.
2) Illnesses like Parkinson's disease
3) Major Events.

1) The cost of living continues to creep upward. Now, imagine drawing on a savings account with no more money coming in. Imagine the cost of milk, eggs, and other daily products skyrocketing when you have no more income. For 30 years? That's not a good scenario.

2) I received a valuable lesson when I took care of my uncle during the last few years of his life. When I cared for my uncle, he was just beginning to develop Parkinson's disease. It robbed him of his independence. As the years progressed, he became dependent on his caregivers. He was lucky though because he was a multi-millionaire. He had the money for care around the clock. He always had someone at the house 24/7. He had a maid. He had someone to cook meals for him. The quality of his life was much more improved because he had the financial resources. You can't do that if you only have $100k in savings. That's when you become totally dependent on the state and/or family and that's never good.

3) Major events could be in the form of hurricanes, tornadoes, etc. Maybe even a house fire. You're going to be able to absorb these disasters and move on if you have a nice money cushion to fall back on. For most people, their life savings could easily be wiped out with one major event.

What are you doing to make sure that you don't become a burden on your family when you get older. For me, that's saving money and investing in real estate. IMO, the magic number that people should strive for before they retire is $1 million. That's in-addition to some form of passive income. I like multi-family apartments. I'd love to have 30-50 doors all cranking out paychecks for me per month. That's with my property already paid in full.

Always good to be a multi millionaire. :'(

 

[Jumpem]

lol @ 6x your pretax salary in bank = retirement?
I could easily retire NOW at that rule of thumb.

fidelity recommends 10x your salary:
https://www.fidelity.com/viewpoints/retirement/how-much-money-do-i-need-to-retire

don't know if is an actual researched # or an easy to remember marketing # for the typical american.


and I'm aiming for a safe retirement withdraw rate of 4%.

Interesting link. Their calculator doesn't even let you pick an age lower than 62 though. I would like to aim for mid to late fifties. Also given the tumultuous employment market I wouldn't be surprised to be laid off in my fifties and then have a hard time finding work at that age even if I wanted it.

 

[brianmanahan]

I'd love to have 30-50 doors all cranking out paychecks for me per month. That's with my property already paid in full.

i assume with a property management company taking all the "my toilet is plugged" calls, right?

 

[Spacehead]

If i can stay at my current pay rate i might make the 6x number. Who knows what lies ahead job wise.
Where you live is a big factor too. I'm in a low cost of living area so that helps i guess.
Yeah, you can figure how much you'll need to live after retirement but how do you figure medical costs? Can you ever have enough money for that?

I wish i could put more into my IRAs now while i can but the government limits that. These links you guys posted & even government tells us to save more, save more but, oh sorry, you can only put in $5500 or $6500 this year.

 

[Jumpem]

I also wish that these calculators would make a suggestion based on some average rate of return for how much you need to save each year to get to their goals. 10%, 20%, 25%, 30%?

 

[pimpin-tl]

By the time I get there, I doubt retirement is even going to be a thing anymore. You'll work till you die, and whoever is on your will gets your debt. Cost of living is going up at an insane rate, at some point you'll just have a perpetual mortgage for all your bills and you'll be doing minimum payment on everything.

That's not how it works. Your debt disappears and will never be the people on the wills responsibility. Unless someone co-signed on something, that is the only way it would happen.