My take in this is that you should try to ensure that your retirement income stays constant in real terms or, to put it differently, that your retirement income is indexed to inflation.
Toward this end, we’re investing in income producing real estate, and we expect the net income will keep pace with inflation. So if we have “x” dollars of rental income in 2020, we’ll still have the same buying power indefinitely into the future.
@threebeans, we have two FAs. One we’ve had for maybe 15 years. The second about 10 years. Serviice is exceptioinal with the first but financial advice both not as good and expensive. Much better financial advice (and holistic treatment of my financial life from the second) but worse service. Most of the money has shifted to the second over time. The first has my companies money (very short time investments) and a slice of my 401k. Plus a private equity investment I could not have access to on my own. Enough to keep an account that provides great service. Plus they provide accounts for my kids.
He was a little bit hurt when we moved money to number two, but that probably happens all of the time. If your reasoning is clear, I would not hesitate to move.
@TooOld4School one of our Monte Carlo analysis’ was for optimum date to begin taking SS. Surprised to see 68 for H and 62 for me (not a big earner over the years). Reran with ages past our estimated “expiration date” and the optimal ages did not change. We assumed 70 since it’s not money we will need. The analysis was done with Social Security Pro and was very detailed. I think you can get a free trial.
“It takes $2 million to be considered wealthy amid Covid-19”
https://www.cnbc.com/2020/07/27/it-takes-2-million-to-be-considered-wealthy-amid-covid-19.html
@colorado_mom, @ucbalumnus, This proves that you were right that only top 5% earners, more or less in the US can reach $5M or more without mortgage payment at retirement.
@kelsmom : So lower the bar to $2M, again without mortgage may be a more feasible target to most of us. Now a bit of relief! 
@CalCUStanford , $2 million per person or per couple?
@TooOld4School, I was just going to post that same question. I can often not tell what articles are using as the basis - per person or per couple.
Of course the averages really don’t matter. Your personal expenses are what’s important to determine, and then if you have enough to sustain them.
How much cash do you all like to have available? Did this amount change (or do you expect it to change) at retirement? Do you determine your desired cash balance as a percentage of net worth or based on covering expenses for a certain period of time? Some other method? How do you determine how much cash you want to have?
I am likely going to retire next spring, and I will have enough cash to get through at least 4 years (probably 6, after other streams of Income).
I think that’s very conservative, and some people will say that’s not smart, but it will help me sleep well at night.
What you need to feel wealthy will depend in large part on where you live. Need much less if in a low cost of living area. The pieces that give absolute numbers aren’t really helpful in that regard. Plus its other people’s opinion of what is wealthy. Generally speaking “rich” is someone that makes at least $10k per year more than I do. Someone with $50,000 in savings will likely think someone with a couple hundred thousand dollars saved is rich (and maybe less). And again layer in the cost of living difference.
I’m a big fan of the free site, open social security. Click on the Additional button at the top.
Once one understands Annuities (well enough to decide if it is a good thing for retirement planning) it is what Annuity at that time might be a good deal for the purchaser.
We have been with our fiduciary Financial Advisor long enough to go forward several years ago with purchasing some annuities. He could present what were good options for us.
We added Annuities to our retirement portfolio primarily to lower our overall risk; our Financial Advisor had selected specific Annuities at different times with two insurance companies- and he has not gone wrong on them. One insurance company calls it “fixed index annuity” and the other “balanced equity strategy”. But both are fixed indexed annuities. A few years comparing the two, one insurance company would be doing much better, and then a few years the other insurance company was doing much better. The guaranteed ‘bottom’ has always been doing better than what bond markets have done.
One has equity index allocation, declared rate allocation, declared rate, strategy spread, strategy term. Yearly strategy option changes can be made.
The other has issue age, # of annual increased, annual increase %, option 1 with base % and current %, and option 2 with base % and current %. Then you get rates and values for new contract year and you can decide on changing allocations - again our Financial Advisor inputs and monitors (and we discuss at our meetings with him).
As we age, and as our stock funds grow, we analyze what we want to do to keep our risk at a level comfortable for us.
FA has our Roth IRA account management.
KEY is having the right FA. There are a lot of lousy Annuities out there being sold by advisors that are in for their commission and not for the investor’s best interest.
https://dqydj.com/net-worth-by-age-calculator-united-states/ indicates that $2 million of wealth, not including home equity, is the 91st percentile among age 60-64 and 65-69. Including home equity, it is the 89th percentile among age 60-64 and 90th percentile among age 65-69.
While external cost of living factors (market prices for housing, etc.) do matter (particularly for people who actually have low income), internal cost of living factors (personal preferences toward high versus low cost things) are a huge factor in different people’s actual cost of living factors. Complaining about not having any money left over to save when one’s income is double or more than that of the median income of the area suggests that expensive spending habits are more of the reason why the complainer has no money left over.
Article was about how much money people think you need to feel wealthy. Not whether you make enough to be able to save any certain sum. But I know thats part of your shtick here. At least you have moved away from telling my kid’s employer how its employees should dress during customer week. LOL
Can someone define “retired”? I’ll have 30 years completed as first responder at age 57 (lifetime pension thereafter) had 2 fulltime part time jobs for 30+ years that I’ll continue working (that’s correct, I’ve worked 90-100 hours per week the past 30* years) I will collect SS in 13 years at age 70. Am I retired after I leave my primary job or when I give up working all together?
I view retired as out of the workforce. So you will noto be that. You will be retired from primary job (athletes retire from their pro sport). Maybe you will be semi-retired? Or retired once removed??
My heavens @BmacNJ , as hard as you have worked I think you are entitled to define it any way you like!
@TooOld4School , @1214mom : I guess the article was referring to per person. But even for a retired couple, $2M savings w/o anymore mortgage payment, children educational support, additional medical coverage (i.e., health and economic costs of chronic diseases, etc), in my opinion, should be more than sufficient for a quality of life especially during this uncertain pandemic period.
@CalCUStanford , @1214mom , I suppose that depends when you want to retire, and also depends on your medical benefit situation. If you have some supplemental benefits from your employer (typical for government) it can make your retirement look a lot better @ $2 million in assets, especially if you live in a lower tax area and have social security.
The whole Covid lockdown experience has shown us how little we actually need to live, - when you don’t go out to eat, don’t have any car or mortgage payments, canceled your TV subscription (no sports!), canceled your gym subscription (gyms are closed) , stopped going for massages, rarely cut your hair, don’t travel much, and don’t need any work clothes we are on track to spend less than $35K for the year - including feeding our son living at home , not including income taxes. We have taken one income and used it entirely for 403b and 457 plans + Roth, and the other pays for the rest with lots left over for more retirement savings. We’ve even fixed up the house with that budget!
Our only indulgences have been some gym equipment and home protection devices.
The idea that only the top 5% of earners can reach $5 million also seems off , the key is investing early and consistently, starting in your early 20’s.