View Full Version : How much do you need/have for retirement?
Life_is_Simple
3-21-12, 10:48am
Based on the following questions:
Do you have a retirement $$ goal?
How much do you have in retirement accounts?
How long until retirement?
You may fall into one of these categories:
"I have a retirement goal. I am X% of the way to it with Y years left to retirement."
"I don't have a goal. I just try to save. Get off my back!"
"I am already retired."
"I have nothing saved."
Other ______
Answer any of the above questions you feel like answering, or respond with the category number that describes you :)
Me? I probably fall into Category #2. I just keep saving and hoping for the best. Though yesterday I just hit the mark of $100,000 in my retirement accounts! :+1: On one hand it seems like a lot, on the other hand it seems like a little
sweetana3
3-21-12, 11:40am
We are already retired and thru good planning and active saving, we have enough. As I have stated before, we believe in balance and thruout our marriage, we put money toward a reasonable mortgage, tax deferred, non tax deferred accounts, and travel. We budgeted and had savings goals which we monitored and met.
It surely helped that we both have protected pensions and no kids.
Me? I probably fall into Category #2. I just keep saving and hoping for the best. Though yesterday I just hit the mark of $100,000 in my retirement accounts! :+1: On one hand it seems like a lot, on the other hand it seems like a little
Kind of depends on your age. It might be a lot or it may be way too little.
I have a lot more in my retirement account than most of my peers. However it is still way too little considering that I'm 57
We've reached our initial retirement goal. The plan was to get to x, and just let the money double or triple until retirement (this was in the day of 10% returns, so in theory your portfolio would double about every 7 years). However the markets aren't yielding these kind of returns, and I can't see it getting back to that in the foreseeable future. Health care cost a big unknown, and likely I will (if anything) see only a small fraction of the social security I'm "supposed" to get. I think we need to up our original goal by 50-100% if we expect when we retire to never work again, and something less than that if we have casual or occasional work.
I'm already retired - retired at age 42 a bit over 12 years ago - and for me it was more about how much I spent (or didn't) rather than how much I had or saved. When I left work I had a paid off house with low property taxes, insurance and utilities, no debt, medical coverage thru the military (VA), approx. $100K in savings, a small government pension once I turned 50, a very small military/VA disability pension, and, most importantly for retirement for me, a lifestyle that cost very little to maintain. I found that my basic expenses were only about $500/month (food, utilities, gas for the paid compact car, pet food, all taxes and insurances). Then I budgeted another $500/month to cover any emegency. If I didn't have to use that money, I used it for budget travel instead. So I really didn't need a big amount of saving or income in retirement. So for 8 years I lived off savings of approx. $1000/month (often only $500/month if I didn't travel or have to cover something unexpected) and a small amount of money from my military/VA disability pension until my state governemnt pension could start at age 50. I choose to take it early and get less money then if I waited because I didn't need more money. Then, after I left work, I sold my house and downsized, to a smaller less expensive house. Paying cash for the place but beeing able to add an additional $125K or so to my savings. My expenses stayed the same - about $500/month for basics and maybe another $500/month for travel/fun/unexpected stuff. I sold my home and am currently renting but my pensions cover all my expenses (which are approx. $1300/month now because of the rent) and use my savings just for fun!! I follow something someone here once called the 4 legged stool prinicpal: Basicly if you lose one leg of the stool (one financial asset) you can continue to support yourself fairly comfortabily with just 3 other legs. And even if you lose a second leg, with a bit of balancing, you can do OK financially. And even if the third legs gets kicked away, you can still continue to sit in that chair as long as you really dig in and balance things like crazy. So before I retired I made sure I'd have my 4 legs - 4 investments/assets - in place first. For me it was a paid off house, no debt, savings in a regular bank account, a 457K (like a 401K for governement employees) and IRA's, and my 2 small pensions. I can (precariously) live off any one of them if ever needed. I'm also divorced and have no kids.
Also, I never take earned interest into consideration when I was deciding how far my money would go. If I decided I needed $1000/month to live on, then I needed to make sure I had $12K/year set up in savings. So if I wanted to saty off work for 5 years, I'd need to have $60K in savings. However, I never included in the interest I earned on that $60k as part of the retirement equation. It was just fluff - something extra for a rainy day (or a sunny one in Paris someday :-)!). So I didn't base my decision to retire on interest rates and how much they would fluxuate over the years. I just didn't withdraw any more money per month then what I had alloted myself to live on.
We are getting close, but healthcare premiums and college seem to be moving the goalposts out farther and farther. I left a tech job to stay at home with my kid. I don't think I'll be able to return to the same field. I'm not sure how employable I'll be in a few years either, although I would only want to work PT, so I don't expect a high income anyway.
ApatheticNoMore
3-21-12, 4:40pm
2."I don't have a goal. I just try to save. Get off my back!"
When looking ahead I kind of figure a real return rate of zero (but if I'm lucky keep up with inflation?), and considering my age (30s) and when I got in the market, I've never gotten any type of real return. I half want to junk the whole game and just invest locally (so tired of this system I don't believe in). I don't and I likely will never have a pension (I barely even get employer matching). I could push my saving from 15% before tax which is not hardship to maybe over 20-25% which would be? My income does not leave me rich enough that 20-25% comes easy.
All terribly cheery right? Yes well I play with getting out at the bottom as a better alternative than trying to be rich someday. Like all the money I have could it enable me to work (like maybe soon?) a job that pays somewhat less if I enjoyed it more? Because I already have an emergency fund and some money. This is not a get rich and retire to riches scheme ... because I don't know how to conceivably make that work with my reality (and my assumptions like zero real rate of return). I just don't know how 1 + 1 = 3, you know.
Me? I probably fall into Category #2. I just keep saving and hoping for the best. Though yesterday I just hit the mark of $100,000 in my retirement accounts! On one hand it seems like a lot, on the other hand it seems like a little
Yea, something screwed up about money and how we think about it when 100k isn't a lot? Don't get me wrong for many things it *isn't* a lot, I know all about housing prices etc. etc.. But it's also maybe 2 people working 40 hours a week for you for a year full time to do anything you want them to do? Really. :) Maybe even 100k is more power than you ever imagined.
I'm already retired.
I quit work full time in 2006, I was 49, I worked part time till Oct, 2007. My wife and I have always invested our money and lived below our means. When I turned 40 I laid out a plan that I felt that I would be able to save enough to quit working when I hit 55 if I chose to do so. It was apparent that my investments were making more than I was spending so I quit at 49, the boss asked me to stay around for another 6 months or so to help with the transition. I only had to work 20hrs a week and really didn't do much.
Even with the lousy economy I am now worth more than I was in 2007. And we have been living well, no debt and only needing around 100k to do what we want a year. I'm buying a plane so my expenses will go up another $15K-20K a year but that's not a problem. Just the reduced amount in taxes I pay now compared to 2006 is enough to live off of.
I'm already retired.
I quit work full time in 2006, I was 49, I worked part time till Oct, 2007. My wife and I have always invested our money and lived below our means. When I turned 40 I laid out a plan that I felt that I would be able to save enough to quit working when I hit 55 if I chose to do so. It was apparent that my investments were making more than I was spending so I quit at 49, the boss asked me to stay around for another 6 months or so to help with the transition. I only had to work 20hrs a week and really didn't do much.
Even with the lousy economy I am now worth more than I was in 2007. And we have been living well, no debt and only needing around 100k to do what we want a year. I'm buying a plane so my expenses will go up another $15K-20K a year but that's not a problem. Just the reduced amount in taxes I pay now compared to 2006 is enough to live off of.
Is that $100K/year income to live on each year, or $100K in total savings? I think it's the former because you said your getting a plane and they are pretty expense to have, fuel and maintain.
Maybe we should start a thread on "How much do you think you'd need to live on in retirement"? That would probably be useful to determine how much a person needs to retire on, and how long it would take them to reach the amount needed.
Do you have a retirement $$ goal?
My wife and I's goal was to have $2 million in income-producing investments and our home paid for, and then devote our lives to public service. Many of our college friends also had very similar goals and outcomes, we had many a long midnight discussion session back in the day coming up with our amounts and strategies.
How much do you have in retirement accounts?
Quite a bit more than that now.
How long until retirement?
We "retired" ~12 years ago, in our mid-30s.
My wife and I's goal was to have $2 million in income-producing investments and our home paid for, and then devote our lives to public service. Many of our college friends also had very similar goals and outcomes, we had many a long midnight discussion session back in the day coming up with our amounts and strategies.
Quite a bit more than that now.
Same here, but just a bit more. Well and that part about devoting our lives to public service.
What you need to retire depends a lot on your current earnings and what your expectations of retirement might be.
Many people will be happy to have a bedsitting room in a comfortable home with all amenities within walking distance, others want planes and travel with most people inbetween.
One can scale one's living expenses to meet current resources within reason.
What you need to retire depends a lot on your current earnings and what your expectations of retirement might be.
Many people will be happy to have a bedsitting room in a comfortable home with all amenities within walking distance, others want planes and travel with most people inbetween.
One can scale one's living expenses to meet current resources within reason.
Its not so much your current earnings that matter, its your spending. After being retired now for the last 5 years and having tracked our spending for 7 or 8 years, we realized that or net worth keeps growing and we can afford more if we so chose. We saved for years to be financially secure and now we can reap the rewards. But we also realize that we have to be careful as I cant go back to work and the money has to last us till we are gone. And we should leave a nice chunk for the kids.
loosechickens
3-22-12, 12:02am
Well, we've been more or less retired for about twenty years now, since ages 42 and 50, but until recent years, we never touched any savings or investments, and instead, allowed all the dividends and interest to be reinvested, so those funds would continue to grow, and lived nomadically, very frugally, and earned whatever money we needed by short term employment, seasonal stuff, etc. for parts of the year, as we felt we were too young to start putting any burden on our "retirement savings".
In the last half dozen years or so, those investments, grew to the point where they were producing considerable income, plus my mother passed away and left some money, so gradually, over time, we've dropped the paid gigs, do more volunteering only, and have started living on the income from the investments, plus now, we get small Social Security checks as well.
We are more than comfortable, our income is more than adequate.....we've had more of a problem learning to SPEND, than we ever had SAVING. Saving and investing became such a habit over the years, plus living very frugally as a habit as well, that now that the time for which we saved all that money has arrived, and we have trouble allowing ourselves to spend it.
At this point, dividends, interest and SS provides considerably MORE than we are spending, and we continue to reinvest some of our income, so unless something catastrophic happens, to us or to the economy, we don't foresee ever having to touch our principal....but it's nice knowing that it is there, just in case.
Incidentally, we NEVER ever, in any year, earned as much as the median household income in this country, and often considerably less, so it was more that we were awesome savers, had good financial advice and help steering our little financial ship from an honest and dedicated broker, and were awesome frugal livers that we ended up with so much in assets, rather than having had highly paid jobs, etc. We always hated debt, considered interest something to be earned, not something you paid, and that has helped us more than anything else, I think.
iris lily
3-22-12, 12:26am
Category #2. Healthcare is the biggest unknown to me, so I don't try to figure out what we need, I just save. With no health insurance to pay, we could survive for 20 years on our savings with no other income, no Soc Security or pensions. But I'm sure many people could say the same, it's the health insurance that's bugaboo.
crunchycon
3-22-12, 4:12am
What Iris Lily said....healthcare is the 800 pound gorilla in our house. We're thankfully pretty healthy in our fifties, but I have one of those attractive pre-existing conditions, so buying our own healthcare would be a bit prohibitive. I basically work for our benefits (DH is self-employed).
What you need to retire depends a lot on your current earnings and what your expectations of retirement might be.
Many people will be happy to have a bedsitting room in a comfortable home with all amenities within walking distance, others want planes and travel with most people inbetween.
One can scale one's living expenses to meet current resources within reason.
My retirement plans are "to have a bedsitting room in a comfortable home with all the amenities within walking distance" WHILE travelling :-)! Of course it's budget travel - which is very doable if you can stay in an inexpensive bedsit (in Paris?) for a few months a year, then a bedsit (in Italy?) for a few months, and then maybe in Thailand for a few more (especially if you don't own a permanent home you are paying for at the same time) rather than spend the same amount of money to stay at a luxury spa hotel for just a couple of weeks a year. I agree though, that how one chooses to live, and what their needs as well as their wants are, will be the main factor determining how much money they need to retire, as well as how much they can save and when they can retire. And of course if you live frugally WHILE you are earning money, you can sock away that much more and therefore have more when you retire - or, like me, retire earlier. I also plan to buy another permanent home (small condo probably) once I'm more ready to settle down. I have money set aside for that specificly.
Bedsits - for you americans - is a rented room in someone's home or a room in a boarding house type setting.
Option 2...I have been saving as much as I can.
I have about $170K,a small pension, and enough with social security(if it will be aound by the time I reach 67!). Once Matt is done with child support and college in 6 years, we will have a lot more to sock away. We plan on living off one income next year and socking away my income into a SEP IRA. We are also paying extra on the mortgage and all the renovations have been paid off and everything replaced as well.
My goals are similar to bae's. My number is higher, though.
We are currently about 4% of the way there (ha!), but we are only 35/40 and both working and we don't plan on stopping.
You could say that we are doing the work of our retirement. Our lifestyle is SO good, and we are doing exactly what we want to do.
Once the student loan debt is paid off, we'll be much closer to it. I really only put in the savings amount that we have so far and our retirement, but not the value of the business and not our current earnings/income and so on -- because those are just sustainability at this point. And, it's off-set by the debt.
I mean, I've considered, for example -- paying off the debt with this money and then starting over with the retirement, but DH doesn't feel too happy about this at this point.
But, hmm. I don't know. Lots of ways of getting there.
Our plans are starting to get more specific, though they are still in the #2 category. Our biggest issue right now is not lack of income or savings, but living in a high-cost area. We've accepted that we're not in a position to pay our house off before retiring while keeping it from falling down. I'd like to double my retirement plan balance before retirement, though I have a traditional pension as well.
Relocation, even if we go 50 miles or less, is definitely in our plans. Staying fairly close to our current home would cost more money, but opens up part-time work opportunities in retirement.
We expect that my wife will retire as soon as our daughter finishes college, due to health. I expect to work for 3 to 5 years after she retires. We are basically urban people and bound to being fairly close to a teaching hospital. Both are major limits on relocation.
Do you have a retirement $$ goal? $2MM.
How much do you have in retirement accounts? +$2MM + very small pension +SS
How long until retirement? That is the interesting thing; since I am no longer a "wage slave" as such; I can retire now, if I desire; the "boss" knows these things; I find that I really enjoy life in general and what I do.
Just my particular situation.
eleighj
We're an odd combination of #2 and #3. We retired the first time at ages 36 and 42, but then both returned to work in start-ups when we found stuff we were passionate about. Our incomes are low because of the start-up factor, which means we're still tapping the retirement funds in order to live, but we're okay with that. We're having fun and knew it was unlikely that we would retire in a permanent way the first time around. We're not risk averse so we've invested in a bunch of stuff that may totally implode, including a restaurant and an urban farm store. :D
Our attitude is that we can always make more money if we really need to. We both know how to hunker down and work super hard and we've built vast personal and professional networks so that is an investment in its own right.
Life_is_Simple
3-24-12, 11:31am
Yea, something screwed up about money and how we think about it when 100k isn't a lot? Don't get me wrong for many things it *isn't* a lot, I know all about housing prices etc. etc.. But it's also maybe 2 people working 40 hours a week for you for a year full time to do anything you want them to do? Really. :) Maybe even 100k is more power than you ever imagined.
Yeah, for now, I'm going to think it is a lot ;)
cattledog
3-24-12, 11:41am
Yeah, for now, I'm going to think it is a lot ;)
I think it is a lot. It's one of those big milestones too. Things seem to steamroll quickly after 100K for some reason.
I'm thinking that if I were to run out of money in my old age maybe I could just go back to school. I could load up on school loans, why let all the kids get all the easy money . That should cover a few years. Then if I couldn't get a job, probably due to age discrimination, Id just defer the loans and go after another degree.
"I have a retirement goal. I am X% of the way to it with Y years left to retirement."
I think we have a plan, but need to get rid of a big mortgage. We are 52/54 with two kids in college at the same time. Stupid us in our twenties! Anyway, two small pensions that we can't get at until we are 65, but plans to retire to service and part time jobs at 57 and 59. We still owe 98,000 on a house (originally 250 7 yrs ago) with 550,000 in retirement plans. It feels like after all this saving we should be able to retire...like, right now....but nope. If we can downsize and have no mortgage and get the kids out of college, all will be better. I like saying the numbers out loud because I am alternately discouraged and then proud of myself. Would you guys be able to retire with 550,000???
DH and I are both retired federal employees and we have DH's good pension plus my piddly one, plus my SS (DH never paid into SS so doesn't get any). We also have medicare advantage insurances, plus DH kept his federal insurance (which I'm on as dependent) so there aren't any medical worries SO FAR. We have no debt at all, except of course monthly utilities and expenses. Our home, car, truck, and RV are all paid for. We do of course have investments which we don't intend to touch and so far haven't needed to. Time will tell. We can't spend willy-nilly but are able to take our trailer RVing a lot during the summer, which we enjoy. Well, when we aren't too busy with church stuff :-D. We'll be going to Phoenix for a week in June (:-O) for our church's Annual General Meeting, but we've saved for that. And we're involved with a group looking at starting a cohousing community in Boise, which we know will not necessarily be cheaper than living as we do now, but we know the benefits will outweigh any "problems". We hope. ### Right now our biggest expense seems to be CAT FOOD! We have three cats and GOOD LORD those fuzzy critters eat a lot during the winter! But we love them and they're worth it! We also feed two strays. Sigh.
Blackdog Lin
3-25-12, 8:51am
I am getting ready to retire this year with about $110,000 socked away in retirement accounts. I don't see why it won't see us through as I really don't plan or see any need to tap into these monies for a long time to come. My reasoning:
- I will have a decent federal pension, added to DH's SS of about half the pension amount.
- we already today live quite nicely on that monthly amount, or less. There's room in the budget for inflation (though I worry about health insurance costs rising too dramatically).
- we have no debt, and I am confident in our ability to keep it that way.
- one of my plans for retirement is to live even more simply and save even more money, as in more gardening/canning, more from-scratch cooking, more garage-saling for needs etc. And y'all on this forum have inspired me over the last few years that one can have a rich and satisfying lifestyle even without "all the bells and whistles".
- retirement travel isn't a big consideration, as DH is physically unable to do too much in the way of traveling.
- the house is paid for, worth $120,000+, and really I see us in 10-12 years deciding to sell out and downsize. I think the house and barn and 7 acres will eventually get to be too much for us to handle and care for as we age. So at least 50% of those proceeds would go into retirement savings as well, depending on what living arrangements we ended up with. But I also feel comfortable that we wouldn't ever HAVE to sell the property.
- I don't know but what I might end up WANTING to get at least a part-time (and low-wage) job, to get me out of the house. I see lots of possibilities for this even in my small town. I even have a few ideas for home-based income. We'll see.....
So even without the mythical $1M in retirement savings, I feel okay about getting out of the rat race at my relatively young age (55). Everyone's situation is different, but for ours I think we have enough. Hope I'm right! :)
I think having a pension is huge. Ours will be small because we won't have put in 30 years or worked until 65, but it sounds like you got your 30 in. Congratulations, Blackdog Lin. I am hoping to spend some time this spring and summer purging and decluttering so we can downsize the house and upsize the yard so we can also do more gardening, canning, etc.
Blackdog Lin
3-25-12, 9:11pm
Thanks Paige for the congrats. Yeah, I got my 30 in - 32 if you're counting, and I am! :) I am grateful, and proud even, to have stuck it out all these years. It wasn't easy, and I went through many new employees who were "3 years and out", 'cause they couldn't handle the stress and the hard work. And a few of them are still in my small town who say to me "you're so lucky, that you get that pension, and I wish I was so lucky". And I want to tell them "it ain't luck, you could have done the same thing, only you didn't want to put in the long hours and the hard work".
I feel somewhat that "you get what you pay for".....
We're probably a combination of 2 and 3. I left my career when I was 23, the year before I met and married DH to work part-time at Starbucks and hang out at the beach. :) I've been mostly home with my kids since I was 25, although SAHM to 5 is not exactly "retirement" in the shuffleboard and margaritas sense. :) I love it, though, and I have a crazy awesome and amazing life. I am beyond blessed, and I do spend more time than the average person sitting by the pool with a margarita and sipping coffee on the dock with my feet in the water.
I have occasionally gotten a part-time job to get my extroverted self out of the house and I'm sure at various points in the future I will hit spells like that again and reenter the workforce here and there.
DH has worked seasonal construction since we moved home to MN 6 years ago. He works summers and is off in the winters, but his summer income and health benefits carry us through the year. He is working on moving into a different construction job that would be a bit less seasonal and make it easier for him to run his own business eventually. Retirement feels a lot less urgent of a priority for us because we already have a lot of time for the things we want to do like travel, personal projects, family time and relaxation and DH likes his work. He's 29 years old, so official retirement isn't really in the forefront of our planning right now. I've never had a plan any longer than 5 years out that I stuck to anyway. :) Life just has so many potential variables.
We keep our spending pretty low and in 2-3 years we will be debt free including mortgage. We are already mortgage-free, but I am paying off my last student loan.
We're also between #2-3... I am effectively retired, as I left my engineering career after DD was born 9 years ago (though as a SAHM and active volunteer, my current work takes even more hours but is far more rewarding). DH still works, but he chose a different career path after a few years in industry and went back for a PhD, then a post-doc... and now still earns less than either of us did 10 years ago. We saved a lot back then (but had to spend some of our savings for living expenses during a few very lean years), and now live under our means while saving what we can. We were substantially hurt by the tech crash in 2000-01 and the market in general in 2008-09, so my ideas of safe investments, a reasonable rate of return, and a retirement target have all been changed over the years.
In fact, my view of retirement has changed over time, too. My dad had a pension and healthcare that he could count on - from the same industry in which I worked. I know that neither DH nor I can expect that (my first employer phased out pensions in 1994, the year I hired on. Maybe it was a good thing since there was no way I wanted to stay there for a quarter century). As a result, I don't know that we could set a target for retirement. And if we could, our current income would probably not allow us to meet it 'early.' But that was part of the choices we made when we both changed our career paths - these days we enjoy life much more, and neither of us needs to peruse graphs to determine when we can escape anymore.
Just wanted to thank Life_is_Simple for starting this thread.
I often miss being able to read success stories (that topic seems to have been far more active on the old board). It truly is inspiring to read that there are so many different versions/interpretations of FI and success in living simpler. I often wonder why I don't get depressed or envious when I read about people (often far younger than me) who have achieved (or are far closer) to their goals, but instead I find it just plain inspiring and admirable.
Keep up the good work people and I hope that everyone (including me) start posting more about their successes (and what they have learned while reaching those successes). Most of the responses to this topic have given me a real boost of energy and hope.
We are at #2.
DH and I are FI, and all my income is currently going into a savings account (not retirement account). Dh has lost faith in retirement accts, and my savings vehicle pays a higher interest rate.
We are under 50, so retirement is a hop, skip and jump for us. I originally wanted to stop working at 40, but have now changed that viewpoint. Our combined retirement and savings at this point is still under $100K, and our goal is about $250K - which is probably not achievable without an inheritance and renting out our vacation property. All choices we are yet to make, but simmer nicely on the back burner.
wtg, stella! :)
Thanks Zoebird!
Finding this board when I was really young was the biggest stroke of luck ever for me. It helped me, as both Rosemary and Zoebird have noted, to craft a life I'm not itching to escape and keep out of debt as much as possible. You all don't know how much this place has meant to me. The plain good sense, critical thinking and self examination of the people here has been a major source of "adult" guidance when I was young and transitioning into adulthood. You guys rock!
Technically, we have enough set aside or in assets to retire now if either of us chose to, but I love what I do and so does DW so we have no intention of ever really retiring. Cutting back a little just to relax, sure. Slowing down as we get older, inevitable. Taking some time off to travel when DD2 heads off to college, you bet. Retire? Would bore the **** out of me. Kind of funny to think of saving for something you don't ever want to have.
flowerseverywhere
3-26-12, 12:57pm
Technically, we have enough set aside or in assets to retire now if either of us chose to, but I love what I do and so does DW so we have no intention of ever really retiring. Cutting back a little just to relax, sure. Slowing down as we get older, inevitable. Taking some time off to travel when DD2 heads off to college, you bet. Retire? Would bore the **** out of me. Kind of funny to think of saving for something you don't ever want to have.
but in your situation you are sitting so well if something happens beyond your control. In these days of cost cutting I don't think anyone's job is really secure, and a medical problem can hit at any time no matter how well you take care of yourself.
We became FI in our early 50's but worked longer to provide a cushion. Since pulling the plug we have both worked however we do what we want and that feeling of dragging into a job that you don't like is gone.
I find the key for us was being happy with where we lived, our friends, our hobbies, our limitations and not always striving for the bigger and better "grass is always greener on the other side of the fence" attitude. Being happy in your own skin is priceless.
but in your situation you are sitting so well if something happens beyond your control. In these days of cost cutting I don't think anyone's job is really secure, and a medical problem can hit at any time no matter how well you take care of yourself.
Its true that jobs are not secure as they were in the past. We don't have traditional jobs so kind of skirt around the issue. The company I 'work for' is one I started a while back. When it gets boring or peters out we will sell it, give it away or close the doors and start something else. That lifestyle absolutely wouldn't work for everyone, but works great for us.
As far as medical issues go, insurance is our chosen method to cover high cost procedures. Since we started the company we can pick and choose the plan that works best for us. Its a nice advantage. Other insurance as a primary part of planning is something that I think most people overlook. I'm speaking strictly from a financial planning pov, other than that I can not stand to even talk about insurance. Anyway, health care coverage is only part of the plan. Long term care insurance, disability insurance and life insurance should all be calculated in as well. It is expensive and I fully realize a lot of folks can't afford to do it all, especially when they are younger. But if you're thinking about retiring it should all be on the radar.
frugal-one
3-26-12, 10:24pm
I retired February 2011 and DH retired 4 years prior. We saved and lived WAY below our means for years to reach the # we thought we needed to retire and then I worked one more year based on fear of the economy. As LC stated, being frugal and saving is so ingrained that now it is sometimes hard to SPEND. Finding ways to save money has always been a game. It is so rewarding and fun to get the things you need and want at a fraction of the cost. I also believe the amount needed for retirement is based on where and how you live.
militaryman
3-29-12, 11:30am
44 yrs old married couple with 2 college age kids at home
-- Paid for house -- no debt ----
We have a retirement goal.
Kinda vague but the goal is to juggle saving as much as I can while at the same time living a comfortable life that keeps the DW and 2 kids satiated and happy. Another words, I can't be Mr. Money Bags and doal out $$ for anything and everything but I can incentivise the kids to do well in college and life in general by providing some college funds and living expenses without paying for the whole deal. So far it is working well... Of Course, it helps immensely that DW is pretty dang frugal too and is "onboard" with savings goals.
So far savings rate is about $25K per year into 401K's between the two of us. Balance is about 350k currently --- I have about $8k/year pension from retired military reserves that will start at age 60. At age 57 I (federal employee ) will have 39 years of service and if Congress does not gut Fed. Retirement I will draw a pension of about $30,000 per year . SS will provide $28,000 @ age 62 (between the two of us) according to SS calculator but I always only consider about 60% of the SS amount --- I will use a "bucket" approach and retire at 57 and use my 401k funds to replicate the military and SS funds until they kick in which should result in a yearly amount of about 55,000 starting at 57 --- I will also use the 401k's to allow the purchase of a retirement beach home and hopefully still have a few hundred thousand left to pull, say, 3% interest off of per year to bump income above 60K mark which should be all we need to live comfortably. If Fed. would offer VERA (early retirement authorization) for me I would be sore tempted to try to go out now (26 year pension of $19,000) but inflation could eat me alive..... Still I know me parents survive on $24k per year with a small paid for house. That is before the 4k health benefits premium is deducted too. So if we had the 19k and drew off about 2.5% of the 350K that we currently have then we would be looking at 27,750 per year --- add in a couple parttime gigs and we could do it. Anyways--- for now we are on a 13 year countdown without any early buyout offer.
I would say I am 67% of the way with 13 years left to retirement.
Blackdog Lin
3-29-12, 8:37pm
miitaryman: oh, you mentioned VERA. I am so there with hoping for a VERA for my job-description. I'm going anyway, May 31st was s'posed to be my retirement date, but now I'm on hold with the "word on the street" of a buyout later this year for my job-description. So I think I'd be a ninny to not wait for a few months with the possibility of a chunk-o'-change to get out when I'm planning on getting out anyway.
I'm hoping for a newer-retirement-vehicle fund, using a VERA inducement.
And congrats on your retirement finance planning - it sounds as if you've got it going on, better than many of us.....
--- I will use a "bucket" approach and retire at 57 and use my 401k funds to replicate the military and SS funds until they kick in which should result in a yearly amount of about 55,000 starting at 57 ---
Just remember that you'll pay a penalty for withdrawl of 401k funds prior to age 59.5, I believe it's currently 10%.
militaryman
3-30-12, 9:23am
Just remember that you'll pay a penalty for withdrawl of 401k funds prior to age 59.5, I believe it's currently 10%.
Additional 10% penalty tax if you are under age 59½.
If you receive a TSP distribution before you reach age
59½, in addition to the regular income tax, you may have
to pay an early withdrawal penalty tax equal to 10% of
any portion of the distribution not transferred or rolled
over. The additional 10% tax generally does not apply to
payments that are:
• Paid after you separate from service during or after
the year you reach age 55
So basically if you retire from Federal service at or after your official Min. retirement age (which varies according to birth year from 55-57 currently) then you pay no penalty
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