<p>I never said anything about $500,000 worth of equity for starters although in our most populated states a six figure equity is not unlikely. Even our modest debt-free home in NJ was worth about $500K in today's dollars when my mom retired and she lived off that and SS quite comfortably in Florida. Something like 67% of families in The US own a home. To ignore that to tell a tale of pending doom begs credibility.</p>
<p>Even if you can pay off the mortgage of your home, with the cost of regular home insurance, flood insurance, windstorm insurance and ever increasing property taxes, it can run to well over $1,000 a month. I always thought that if we could get our mortgage paid off, we would have it made but with now I think it might be cheaper to just rent.</p>
<p>dstark:</p>
<p>There's an article in the May 29 issue of USN&WR that suggest many Americans save too much for retirement. The calculations are based on what they will need immediately after retirment; however, the longer they live, the less they do and therefore the less they spend. The basis for the article "Socking too much away" is research by a financial planner named Ty Bernicke.</p>
<p>
[quote]
In a report published in the Journal of Financial Planning last year, Eau Claire, Wis., financial planner examined federal statistics and discovered an assumption-bursting fact: Seniors actually go through less money as they get older. By contrast, many financial advisers figure that retirees will spend at the same rate until they die, and they rely on this conventional wisdom in crunching numbers.
[/quote]
</p>
<p>In case we get carried away, there's a cavear.
[quote]
How many people are oversaving for retirement? Experts agree that it's probably a fairly small number
[/quote]
</p>
<p>But it's worth taking into account the finding that the longer we live the less we may be spending.</p>
<p>Marite, thanks for the link.</p>
<p>It is true older people spend less than younger people for most things.</p>
<p>The article does mention the use of calculators like the one I provided a link for earlier. </p>
<p>One thing that can be done is take a look at what an older person is spending and use that figure as a starting point.</p>
<p>My grandparents owned their own place so that was covered. They spent around $35,000 to $40,000 a year. </p>
<p>So, instead of using my costs, I could use my grandparent's costs. </p>
<p>I could enter $40,000 a year as an income.</p>
<p>Put in the years expected to retirement.
Years expected to live after retirement and start playing around.</p>
<p>Some people save too much, but most don't. </p>
<p>Edit: Several things bother me from the article.</p>
<p>People are living longer so they will have to save more.
Interest rates are lower than in the past so people will have to save more.
Housing and stock prices are higher than normal so future returns will probably be less.
Assisted living centers and nursing home costs are going up at faster rates than inflation which means you have to save more.
Social security and medicare are not that financially secure.</p>
<p>The other trick is to live in a low tax area. On a nice little 1700 sf brick ranch with 2 car garage on a half acre in a good neighborhood my taxes are just $1100/yr. Insurance is another $500 so my base cost is under $150/mo. Now the nasty expense is repairs. I'd allow at least $150/mo. for that. Most mos it will be nothing--then the water heater dies and then you need to paint. Even if you do it yourself it's $1,000.</p>
<p>Good points, dstark.</p>
<p>"But it's worth taking into account the finding that the longer we live the less we may be spending."</p>
<p>I found that out the first day Fred Meyer sold me that first cup of coffee for the "seniors' rate". But then they stopped selling coffee, and put a Starbucks in the store. :mad:</p>
<p>Ross gives me 15% off on Tuesdays. Too bad I don't buy anything there. Value Village for me! :D</p>
<p>Sigh. If D2 gets a gymnastics scholarship, I'm outta here! :p</p>
<p>Barrons wrote, "Now the nasty expense is repairs. I'd allow at least $150/mo. for that. Most mos it will be nothing--then the water heater dies and then you need to paint. Even if you do it yourself it's $1,000."</p>
<p>Yep. I can just see me doing that at 80 years of age. :)</p>
<p>Mini wrote, "If D2 gets a gymnastics scholarship, I'm outta here!"</p>
<p>Then I'm outta here. :)</p>
<p>Spending less in retirement? Definitely! Nothing takes a larger chunk out of our budget than private school tuition!!! ;) Can't wait until D1 graduates in 2008!</p>
<p>Dstark, I saw the repeat of the PBS program. Frightening to think that so many people contribute to tax-deferred plans but do not monitor them...only to find that they've lost a huge chunk of $$.</p>
<p>archermom, I agree.</p>
<p>Well, I agree that in GENERAL, you can spend less after you retire UNTIL you need to get folks to come in & help provide care, & then expenses start increasing.</p>
<p>Taxes can also be different after retirement. For example, in HI, there are currently no state taxes on pensions, so that will be one expense we won't have to pay. Sure looking forward to not having to pay tuition for private school or college/grad school too after retiring.</p>
<p>I know many folks in their 70s & 80s & beyond who are working & enjoying it. So much depends on the individual & WHY they're working & what they're doing. Those who love their jobs & are able to pick & choose their hours & work conditions are of course the happiest.</p>
<p>Agree that good health makes a tremendous difference in the quality of your life--working or retired. Being in great health also keeps your costs down. I know many folks in great health in their "golden" years who are enjoying travel & just about everything they choose to do.</p>
<p>Good genes are a big plus, too--if you've got dementia genes in the family and you should get dementia later in life, you can go through a lot of money quickly. You could be looking at $8-9K a month for nursing home care...</p>
<p>Marite: "In case we get carried away, there's a cavear."</p>
<p>Ha-ha-ha!!! I know it was an accidental typo - you really meant "caviar," right? - but I love it!!</p>
<p>(PS for the humor-impaired - I'm kidding. I knew she meant caveat!)</p>
<p>Well, it's a typo, and I could not fix it, but I'd love to get carried away on caviar. For that, though, I'd have to save a lot more than I am able to right now! :)</p>