How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire? (Part 1)

Parents Forum Parent Cafe
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<p>from US News:
""Most retirees have very modest incomes. The median income for people age 65 and older was $27,707 for males and $15,362 for females in 2011. The typical household headed by someone age 65 or older had a median income of $48,538. The median income increased by 2 percent between 2010 and 2011 after adjusting for inflation. Almost 3.6 million elderly people (8.7 percent) lived below the poverty level in 2011.""</p>

<p>46% of Americans have less than $10,000 saved for retirement. (Employment Benefit Research Institute)
40% of baby boomers now plan to work until they die. (AARP)
36% of Americans say they don’t contribute anything at all to their savings. [CNBC]
87% of adults say they are not confident about having money for a comfortable retirement. (Lifehappens.org)
Expected retirement age is up to 67 from age 63. (Zero Hedge)</p>

<p>another thread has got me wondering .....</p>

<p>So many people don't have employers that provide a pension (or an adequate pension). </p>

<p>many of us have to self-fund our retirements with 401ks, IRAs, and other investments.</p>

<p>How much income do you think you'll need when you retire? How much would someone have to have in a 401k to allow for that? </p>

<p>it is somewhat scary because we dont know how long we'll live, what medical issues we'll have, etc.</p>

<p>What are your thoughts?</p>

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<p>My opinion is that I have more control over my debt than trying to project what income will be needed for an unknown lifespan. So - goal is to be 100% debt free by age 60 - no mortgage - no debt of any kind. The less debt you have - the less income needed to service that debt. It’s a more tangible goal. We have minimal pensions and will be relying heavily on Social Security - so heading into retirement debt-free seems to be the best approach.</p>

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<p>It is scary. We ran numbers some years ago, and realized that we were spending way too much, if we wanted to live in similar, but smaller modicum of comfort as we are now with allowance for help as, yes, looking at my mother and MIL, many of us will likely need. Some health issues on the part of my DH brought that home dramatically.</p>

<p>I’m scared. Yes. I am. I did some numbers recently with my MIL’s holdings, and the fact was, she lived like a hermit for years and spent little, yet her costs were not small even with a paid off house and car. Property taxes, federal taxes, insurance, medical things, some help, repairs, utilities brought her COL right up there. We are going to look for some place low on the taxes, not much maintenance required, near good medical care, near amentiies, help available, not too far from family, safe. But our monthly nut in terms of things like cable (an essential for my mother and MIL, the full package), internet, cell phones, insurances, repairs, health care, car expenses, are not small. Not to mention what it costs to maintain contact with the grown kids and wanting to help them out. My friend who moved to Florida is finding that she is flying back to where her kids live far more than she had planned. Grandchildren being born, baptized, birthdays This weekend her one son has a special exhibit on display. They are used to doing as they pleased pretty much as they were high income, but they are finding that retirement is expensive. We talk a lot, and she is finding that her costs are not going down at all as they had projected. Wedding, funeral, family and friend get to gethers all end up costing. I was hit hard this year in that two close early career friends died. We’d always thought we’d have some reunion. Not going to happen and it hurts. Hadn’t seen them in nearly 30 years and now will not in this life. I wish we’d done something now. Just went to an out of town funeral–an all day affair of a family member (elderly) and tis the season for that, but I did not expect my generation to be joining those ranks yet. </p>

<p>So, yes, it is a huge issue for us, as we are now very old parents to be having yet another kid in college. </p>

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<p>I agree that being mortgage/debt free means less income is needed, but it is shocking how much is still needed even w/o a mortgage/debt.</p>

<p>prop taxes
home insurance
elec, gas, water, sewer
internet
cable/satellite
home repair (inside and out)
home furnishings/appliances repairreplacement
cars (insurance, gas, repairs, replacement, registration)
health costs (co-payments, etc)
Rx’s (yikes…these can be high)
dental costs
eyeglasses, exams
food
clothing
HOA or any services (lawn, etc)
gifts/holidays
entertainment
travel (going to see those grandbabies!)</p>

<p>I’m sure that I am forgetting a lot.</p>

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<p>Mom2, most of the costs you are listing are for things one nenes whether retired…or not. </p>

<p>In addition to no mortgage, we also have no college bills and that was huge. </p>

<p>I think retirement is like having children. If you wait until you are “ready” you will never do it.</p>

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<p>I keep track of 2 years of expense to get an idea. I also use some Monte Carlo simulation to make sure I won’t run out of money even if I live till 100. I get 100%, I’m happy. But I do have some reserves just in case I’m wrong. I plan to pay most things in cash a year before retiring. Husband and I are shooting to retire in less than 2 years, could be sooner if we won the lottery. We bought our retirement home near hospital facilities and within walking distance to shopping centers. </p>

<p>Those numbers in your first post look scary, but I don’t know anybody in my immediate family that are in that category, even for my sister who never earned a lot of money. I wonder if the survey take into account of pensions that are not reported etc…</p>

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<p>oh i know! lol…it’s just that we have a tendency to think that if we’re debt/mortgage-free, we can live on very little…but that’s not really true. </p>

<p>That is probably why so many widows end up living with an adult child. the widow may be debt-free, but her dollars wont cover most those listed costs.</p>

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<p>Probably…because so many companies are no longer providing much/any. My H’s company grandfathered in the employees that have been there a long-time with a great retirement, but those who’ve been hired within the last 20 years or so get a lousy retirement.</p>

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<p>Short answer, 2 million dollars. At 4%, income of $80,000. We have no idea what inflation could raise costs in 20 years. Most obviously will not get that nest egg.</p>

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<p>Before the kids went off to college our financial planner told us we were going to be “OK” projecting to age 95…but then the market crashed and we lost money and college costs went above our budget and our property portion of our portfolio took a huge, huge nosedive that is just starting to creep back up and I switched jobs…so we’re in the process of meeting again with our financial planner and re-forecasting…but it does scare me some. How much do we need? For the first time in our married lives, I actually don’t know which scares me even more and we still have four more years of college tuition payments without any aid. Once I can stomach adding up the expenses and re-projecting the future I’ll find out how much we need. A decade ago I said $4000 net a month, I think that number is going to be higher. Ask me in a couple months :slight_smile: what i think I need. So mom2…I’m going through it like you posited…line by line. Don’t forget cell phone costs.</p>

<p>Oh, I have a family member that lives fairly frugally, in her home with nursing care and no internet and she’s running closer to $5000 a month even with a small nursing care assistance policy - it’s that late in life care that chews up the $$. In our area those costs run $22 an hour for basic care, housekeeping, laundry, pill giving, aid type stuff. It can actually be less expensive to move oneself to a decent independent but assisted living facility in our neck of the woods. </p>

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<p>In order to counter inflation, I gave my assets very little increase, basically none, I just added the savings we contribute. But I’m with Thumper, you can’t plan and worry about retirement as long as it is in the ballpark. We are just waiting for the good and reasonably cheap health insurance and not ACA(which could be unpredictable). One thing I noticed when I made my spreadsheet, I didn’t account for dental insurance, so I finally added that in to my spreadsheet. Cell phone, I can get rid off, go back to be caveman for a change. :D</p>

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<p>ugh…forgot cell phone costs…thanks momofthreeboys</p>

<p>also unless you include cleaning/paper products in Food budget, I forgot that as well. H uses a ton of TP and paper towels, so those practically need their own line items…lol</p>

<p>also forgot…PETS!!!..food, vet bills, etc.</p>

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<p>We ran an estimate of what are income will be after H retires (6 years to go at a minimum as he will then have 30 years so will get full pension.) With his pension, his SS, my SS and what we will have to start taking from our 403B retirement fund each year - our income is going to go up. H will be allowed to transfer his accumulated sick days to pay for our supplemental health insurance coverage and since he has never used a sick day in 24 years - he has a lot. Of course, that obviously could change in the next six years but fingers crossed there won’t be any serious illness to deal with. </p>

<p>We will still have a mortgage as we did a big remodel 7 years ago and refinanced - but it’s only $1000/month, so easily affordable. As it is right now we pay for S tuition out of H’s regular paycheck - so after we are done with that next year it’ll be like getting a big raise for us. Eventually, we will inherit from both my parents and H’s parents, so between our income and that (and we won’t have to touch the principle) we should have plenty of $$ to do pretty much anything we want. </p>

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<p>I think about this often, and I can’t quite come up with the right answer. Once we retire, as far as staying in our occupation, retirement is permanent. Can’t go out and get a job even close, though we could do something else. We could retire at 55 with a reduced pension that is pretty good, or 60 with a full pension. But do I trust that pension will exist throughout our lifespan? There are so many people that were planning on pensions, and they disappeared into thin air. It’s a balance between feeling like we have enough money saved up to not struggle through retirement, and retiring before the job kills us.</p>

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<p><<<
since he has never used a sick day in 24 years
<<<<</p>

<p>wow…he’s gonna live forever! ;)</p>

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<p>@busdriver, I think about the same thing, not so much about money but about what to do in the day when we retire. At first I’m sure the fact that we could sleep in is great but what happens after the first year. Will the boredom kill us? I’ve heard many report that people die 1-2 years after retirement, how true is that?</p>

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<p>“wow…he’s gonna live forever!”</p>

<p>He’s got longevity in his genes. Definitely will outlive me. :frowning: </p>

<p>“Once we retire, as far as staying in our occupation, retirement is permanent.”</p>

<p>My H doesn’t plan on ever retiring but it is easy to do consulting in his field. He has already been approached. </p>

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<p><<<
I’ve heard many report that people die 1-2 years after retirement,
<<<</p>

<p>i wonder if that is because serious health issues often force people into retirement. If so, then that would skew the numbers. Retirement didnt lead to an earlier death…the health issues led to retirement, and then early death occurred.</p>

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<p>a low cost, no data, plan could be low cost. we got rid of the land-line awhile ago. Unless you never plan on traveling or driving distances, you need to keep your cell phone.</p>

<p>there was a trac-fone advertised on QVC yesterday that really seemed like it would be a low cost alternative for someone who needs that option. the minutes/text/data dont expire for a year. no contract is nice, no monthly payments. future purchased minutes are given a triple bonus. </p>

<p>I bought one just to have in my purse for the rare times H or I leave our cell phones at home. It would have come in handy yesterday when H left his cell phone at home. </p>

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<p>We still have land lines and the whole cable tv thing from Cox. Very expensive, almost $200+ a month, I don’t have the bandwith to deal with it yet, I’m sure I will downsize the package when I retire. But not now, my husband is eagerly waiting to see the world cup on his big screen tv this summer, I’m not going to ruin his fun.</p>

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<p>I’m semi-retired right now. I’m 65 1/2 and am trying to postpone taking SS and funds from our IRAs until I’m 70. I get a small pension from an old employer that I had to start at age 65 (well, I could have postponed it but it wouldn’t have increased). So at age 70, I’ll have that pension, my full SS, either DH’s SS or my spousal SS (whichever is larger – I was always the primary breadwinner), and 4% of our investments, which aren’t too bad. We have no mortgage, thanks to our recent downsizing, and both kids are out of college, but the list presented above is about right. Taxes and insurance are our largest expense right now.</p>

<p>Not to mention helping out S1, who is in grad school and taking out big loans, and S2, who will be starting grad school in the Fall.</p>

<p>I don’t think any amount of money is ever enough money.</p>