I was speaking about Performing Arts season tickets, we have the football season tickets.
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I check this thread periodically but it tends to move quickly and covers a wide range of (interesting) topics.
It occurred to me recently, has the original question ever really been answered?? How much do YOU need to retire and at what age"? Obviously, there are tons of variables but if you had to give a ballpark amount what would it be?
I will share what my friends said last night when we discussed this:
The amounts ranged from 5M to 10M. We live in an expensive area and these amounts are assuming there is ZERO debt. Just living expenses. I am NOT an expert but these amounts seem doable even if you donât qualify for Medicare yet.
To that end, our biggest hold up is health insurance (we are 57). Hâs job is extremely stressful so we are thinking about just biting the bullet, buying insurance and enjoying life. Insurance would def be our biggest expense.
I have been inspired by the posters that retired âyoungâ and shared their experiences - looking at you @ChoatieMom!!
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I can tell you that we would never retire if thatâs what we needed. We donât live an austere life, and we retired on a lot less. The answer absolutely varies by individual circumstances.
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Median net worth for people 65-74 in the US in 2019 was $266,400. Average net worth is $1,217,700.
Another example of difference between the real world and this site.
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$5-$10 mil? Wow, thatâs certainly a goal! Interesting to hear the hard numbers out there - and how they vary.
This thread has started me thinking - not just about what Iâd need (financially - the original objecive of the thread) - but what Iâd want in the next stage (how much public service? how much travel? how much security, particularly for unexpected heath issues?). Itâs really a very multi-layered and evolving process to figure that all out⊠then find a number to fund it!
Numbers are helpful though, if just for comparisonâŠ
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Yes, we figured it out⊠since we are both now retired (on our own terms, not layoffs).
As discussed many times, the target number would of course depend upon estimated SS/pension and retirement age and debt and many other variables.
âThe amounts ranged from 5M to 10Mâ - Oh, that is the kind of thing that makes average couples want to give up, scares them out of saving for retirement. I suspect very few achieve that kind of nest egg.
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Tell them you are concerned about living in the poor house starting out with those savings levels and you will discourage others even more. 
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Colorado_mom - glad to hear you figured it all out! That gives hope to the rest of us that all the layers and variables can be assessed!
Iâve been officially retired for two years; DH for one year. (In our last few years of working we only worked âminorâ jobs â not all all comparable to the big corporate jobs with their big corporate salaries that I used to have.) We do not have $5 to $10 million. I have a pension, weâre both collecting SS, and we get my RMD from my IRA. (DH will start collecting his RMD in January of 2022.) We are very comfortable. We donât live extravagantly, but we can pretty much afford anything we want â trips to see our kids, home improvements, new cars. Life is good.
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Thank you all for your insights. I only threw out some hard numbers in the spirit of the original question posted in the thread. As discussed, there are countless variables to consider.
H is currently dealing with an extremely stressful work situation and truthfully, I think it is time to re-evaluate our original retirement plan (which was to hang it up in 3 years at 60). His quality of life is crappy and happiness/healthy mental health is way more important at this point. This is why I re-visited this thread.
Thankfully, we do have a healthy nest egg but do not have pensions and at 57, it will be years before we get SS or Medicare. I need to start pricing out plans on the ACA, looking into COBRA pricing, etc.
Thank you all again for your responses - they have been helpful.
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LOL - it took many years of planning to figure it out, including several retirement planning classes (with financial planner freebies sessions). My husband had a very elaborate spreadsheet/charts, which for years I called the âhow many ways can you show that we canât afford to retire?â spreadsheet. Eventually we picked a different fee-only financial planner to help. Probably we were a bit too conservative, but we found a scheme that was in our comfort level.
I think it is important to figure out how much monthly spending you will need. After accounting for pension (if any) and SS ⊠you need a way to cover the gap. My part of the planning was tracking for about 8 years our monthly credit union âoutflowâ (cash + checks + Visa + withdrawals). I noted but did not count payments for college. Same for the car we bought in cash (weâll purchase future cars from savings). There are certainly other ways to determine monthly after-tax âincomeâ needs, but this way worked best for us⊠just a 5 minute exercise done after balancing the checkbook ⊠Yes, I still do that old fashioned task
Oh yea ⊠in planning we had to add another approx $1k/month per person for ballpark of pre-medicare medical coverage.
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I have probably said this before on this thread, but will say it again.
The $$s are more about what you spend than what you make or how much you have in assets. I strongly suggest writing down EVERYTHING you spend for a year or 2 to help figure out how much you really spend. Then you can figure out whatâs flexible and whatâs not. Then you will have a good sense of how much you need for retirement.
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@dwhite: I was in that situation â a corporate job that paid me more than I had ever made before, but I was subject to harassment and abuse from my boss. I loved the $$$ and didnât want to give her the satisfaction of quitting in an emotional huff. Finally, my boss stepped over the line and I was able to quit on my own terms â the company gave me a severance pkg and my bonus. I was ~63 and had hoped to work for a few more years. By that point in my life, I had nothing to fear, so I used my contacts and got a few freelance gigs â one of them very lucrative â and kept going until I was 70.
ETA: We also tracked everything we spent â and what we spent it on â during 2019, so we were well-prepared to know we could both quit working.
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Agree with tracking your spending for a year or few to estimate your spending in retirement. But make adjustments for:
- Add costs for things currently being subsidized by your employer (e.g. medical insurance).
- Add costs for activities you want to do in retirement.
- Adjust for costs that occur once every several years.
- Subtract costs associated with employment (e.g. commuting).
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I often see people with a healthy amount of savings who say that they donât want to spend any of it until RMDâs are required. We arenât afraid to spend our IRA money in our early 60âs. We donât have pensions, and we would like to wait until 70 to take SS (yes, we have run the calculations, and we like the idea of higher payments for the rest of our probably very-long lives). We work with a trusted financial planner, and we feel as comfortable as anyone can feel with our decision. We have a relatively affordable (very high deductible) health insurance plan through Hâs former employer that gets us through to Medicare, which helps ((currently $425/month for both of us ⊠with a $6,000 deductible that we already hit this year thanks to my stubborn kidney stone that refused to leave me). We thought we needed a particular amount per month, but we actually found that we need 14% less than we thought. Itâs really scary to take the plunge, but IMO, if continuing to work in a job you canât stand doesnât make the difference between being okay and being poor, itâs worth taking that plunge.
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My parents had a close friend who sold a business about 40 years ago, got something like $4-5MM. He also had a moderate pension and SS. They lived very well, lots of travel and goodies, had a paid off home and low taxes. When they both passed, the only thing left was their home, somewhat due to all the fun they had and somewhat due to long term care needs that developed for the last 5-10 years. Due to pensions and annuities, they were unlikely to outlive the income, but man, they spent the lump sum and had fun doing it. And those were '80s dollars when it was many millions. That makes me agree with the $5-10MM as a range for a carefree, spendy retirement.
I donât assume I have that, but I can understand high earners aiming for it. Also, people doing FIRE, if they plan to live off the income on their investments rather than letting it ride and grow, they would need a larger lump sum in 2020 dollars to take them the rest of their lives than some one aiming for 55-65 retirement.
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âThink outside the boxâ when it comes to health insurance coverage.
If a spouse takes a job that pays insurance and is low stress work - may times can get insurance with 30 hours a week. Bank teller and other kinds of things. It doesnât need to be the primary breadwinner.
DH had enough of his boss (a non-engineer) - he had non-engineers as bosses before, but the company climate has gotten âbadâ again â years ago, DH was on the lay-off list because for that company, he was a high paid engineer (barely making 6 figures and what he knows/his capabilities NOT highly paid) - one of the Global Presidents took him off the layoff list. DH had worked with this guy on some of the technology transfer to China, and DH had lots of interface with managers and engineers at these various facilities. We are in a high tech city but he never had a security clearance.
When DH saw how much was in our 401k, he wanted out. He could have worked 30 hrs a week and continued benefits - I told him, work the 30 hours and email each week to his boss what was left to do. His boss was not going to fire him, and he approved the 30 hours/week. However DH was so disgusted he emotionally needed out. We could have gone on COBRA but I worked enough hours at my job to qualify for health care coverage, saving us over $1K/month difference from the COBRA coverage for the two of us.
DH turned 65 in June. I turn 65 in Oct. I just got my Medicare A & B card. DH has his Medicare A card. We have turn on his Medicare B in September otherwise they will charge us each month turning it on now - Medicare is somewhat âinflexibleâ.
When I turned 63, I was going to retire from my job due to the added duties and responsibilities and relatively low pay for degree and experiences; Director of Nurses (DON) gave me a job with limited duties and responsibilities and that has been working out. It was one of her last work days because she was also getting out due to the stress. The new DON has honored my employment âcontractâ. They are scrambling for nurses.
I was going to start collecting SS at age 63, and had set an appointment, only to have to hold on SS phone line to cancel it. When I called my DH and told him I was going to give Jennifer my resignation letter, he told a coworker âWatch, she will call me back with a different job thereâ. I guess he understood how important it was for facility to hang on to their trained RNs.
Getting close to end date for retirement â 8 more weeks, my last day on the paycheck will be Yom Kippur (Thursday Sept 16, although Yom Kippur actually begins at sundown on the 15th), as that paycheck on Sept 24 includes the insurance payment through the end of September. What a fitting end! We are Catholic but Catholicism is with the Jewish roots and strong respect for Jewish traditions and the faithful.
Some can handle the insurance bite with retiring before 65. Some work for government and some companies that have reasonable insurance coverage/costs. Our career government neighbor has some health issues and top management changeover which has him planning to retire - he is over 59 1/2 but not by a lot. His position requires a 3 month notification, and his plan right now is to finish out the end of Dec this year. If he pre-deceases his wife, she will have 1/2 of his pension. Their home is paid for. She is capable herself (Vanderbilt trained ChE) but took a payout when her 2nd child was born. They are going for QOL, are conservative spenders.
We just bought another annuity to reduce our financial risk to a risk level we are comfortable with. I manage DHâs 401k and am a little nervous about the potential for a large market slide, but am trying to stay calm.
We continue to be concerned and guide our DDs. 3rd grandchild coming early Sept. Will give out money, provide interest free loan etc as appropriate for us. Put equal amount into new GSâs college fund once he is born. Do the same for one DD and we do for other DD/family.
My dad realized a few years before he died that he could gift out some money to all 5 of his children (the lone single/no kids son with very strong 6 figure salary was the only one w/o a good immediate use for the money) - not a lot of money but it was a nice gesture and was put to good use. Once dad died, had a A B Trust; mom was a widow for 15 years but did not spend down funds in her health care due to family oversight and help.
Our current estate is what dadâs was - with 5 children, but he achieved more, in part with his own company and his real estate holdings. We only have the two children. We are comfortable. Pleased with DDs. Passing on financial lessons, and they âget itâ. We are happy.
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I am learning a lot, but also seeing alarming trendâŠso many of us older workers are being harassed because we are making too much money. I am younger than most of you here, but also was told by my former boss that I made too much before I was laid off. Research allowed me to negotiate severance to almost a full year worth of salary, with initial offer of 20 weeks. Within 3 month, I started working for my current employer. I made 10% less, but the pay per hour is so much greater and I like what I do.
We are going to help D17 pay her medical school for the next 4 years, and DS20 with his college. Matter of fact, I started withdrawing the money from her 529 even though we donât know when the tuition is due. The current market fluctuations make us anxious. What are your thoughts about the market now?
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I keep enough in a savings account so that I would not have to take anything out of stocks for at least a couple of years (probably more like 4 years). I know itâs not the wisest way to handle finances, but I sleep well at night.
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@SincererLove absolutely about harassing older workers. Can happen in private industry and can happen with state/federal employment.
So the best thing to do is to earn/spend wisely/save/invest so you can duck out when you have to or when you are forced out can have the resources to move forward.
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