How much do you need for an UMC retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Another total joke are these people who think they need to fund three generations before they retire: themselves, their kids, and their grandchildren. I’m not working extra so that the two generations after me don’t have to. It’s fine if you have good fortune and want to share the wealth, but this is not “saving for retirement.”

+1, some people are trying to build true generational wealth. That's fine but a different goal than OP's question about how much you need to maintain an UMC lifestyle in retirement.

The funny thing is that because a lot of people will automatically spend more if they have more, a lot of people who amass small fortunes by the time they retire will squander most of it (on vacation homes and subzero refrigerators and first class plane tickets). Meanwhile you could save a more modest amount, live a perfectly nice retirement on 100-150k a year, and wind up leaving a paid off home and a good chunk if change to kids if you don't wind up with major LTC costs (which lots of people don't-- neither of my ILs wound up in LTC unless you count the 6 months my FIL spent in hospice before he died (paid for by Medicare and the VA). My dad spent 2 years on LTC but so far my mom hasn't needed it (she's 85 and lives in a condo in a retirement community but it's very economical ).

It's not "squandering" on vacation homes, subzero and first class tickets if you plan to spend on that. For some of us, those items are just a "drop in the bucket". If you have $10M+, why wouldn't you splurge on things that give you pleasure? Sure I don't need a subzero, but it's an awesome fridge, keeps food fresher (with 2 compressors) and we can easily afford it. Same for business class travel. Don't have to have it, but I can't take my $$$ with me when we die. Kids don't need $10M+ each, so why shouldn't we enjoy it

I have known several couples who took this approach to retirement and then discovered they needed to scale back if they didn't want to spend it all. The problem with this kind of spending is that it begets more spending. The 20k fridge leads to a 100k kitchen reno. Which leads to Getting dissatisfied and buying a new house or putting in a pool or whatever. Getting used to first class and luxury travel means getting bored with it and pursuing even pricier and more expensive travel. Then the market has a bad 6 months and suddenly these folks claim poverty.

I have enough in "cash only" investments to earn 7 figures in interest last year from just that. I think we will be just fine.

But yes, spending does beget more spending. And you should only do it if you are sure you can afford it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Another total joke are these people who think they need to fund three generations before they retire: themselves, their kids, and their grandchildren. I’m not working extra so that the two generations after me don’t have to. It’s fine if you have good fortune and want to share the wealth, but this is not “saving for retirement.”

+1, some people are trying to build true generational wealth. That's fine but a different goal than OP's question about how much you need to maintain an UMC lifestyle in retirement.

The funny thing is that because a lot of people will automatically spend more if they have more, a lot of people who amass small fortunes by the time they retire will squander most of it (on vacation homes and subzero refrigerators and first class plane tickets). Meanwhile you could save a more modest amount, live a perfectly nice retirement on 100-150k a year, and wind up leaving a paid off home and a good chunk if change to kids if you don't wind up with major LTC costs (which lots of people don't-- neither of my ILs wound up in LTC unless you count the 6 months my FIL spent in hospice before he died (paid for by Medicare and the VA). My dad spent 2 years on LTC but so far my mom hasn't needed it (she's 85 and lives in a condo in a retirement community but it's very economical ).

It's not "squandering" on vacation homes, subzero and first class tickets if you plan to spend on that. For some of us, those items are just a "drop in the bucket". If you have $10M+, why wouldn't you splurge on things that give you pleasure? Sure I don't need a subzero, but it's an awesome fridge, keeps food fresher (with 2 compressors) and we can easily afford it. Same for business class travel. Don't have to have it, but I can't take my $$$ with me when we die. Kids don't need $10M+ each, so why shouldn't we enjoy it

I have known several couples who took this approach to retirement and then discovered they needed to scale back if they didn't want to spend it all. The problem with this kind of spending is that it begets more spending. The 20k fridge leads to a 100k kitchen reno. Which leads to Getting dissatisfied and buying a new house or putting in a pool or whatever. Getting used to first class and luxury travel means getting bored with it and pursuing even pricier and more expensive travel. Then the market has a bad 6 months and suddenly these folks claim poverty.

I have enough in "cash only" investments to earn 7 figures in interest last year from just that. I think we will be just fine.

But yes, spending does beget more spending. And you should only do it if you are sure you can afford it.

DP. Just to be clear, OP’s question was about resources for a UMC retirement. Clearly, you’re beyond UMC. There’s no problem with that, but the experience you’re sharing is not what is needed for OP’s goal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As others have said, the cost of care is exorbitant. My mother in law is paying $15k a month for my father in law’s nursing home (technically a rehab, but he cannot do physical therapy anymore and is just in bed for the past year.) they are Umc but not very rich.

OP here. Thanks for mentioning the cost of nursing home care. $15k a month for 2 people would mean $360k a year. It seems like it would take $10m in investments to pay for that. DH also wants both of us, and our parents, to avoid nursing homes but instead have in-home care. Who knows how much that would run.

Find a top notch CCRC and enter while still healthy enough (ideally by 75). Sure you pay $300-500K+ in entry fees, but that covers your nursing/memory/assisted living care when you need it. Good ones mean if you "run out of money/investments" you don't owe anything else---they cannot touch your SS, only your other investments.
My parents are in one, and there are currently 4 people (all widowed women) who are late 90s/over 100 who "have run out of $". They no longer pay anything. Two are still in independent living, the others are in higher level care.
My parents pay their $7K/month for their apartment and that covers 1-2 meals per day and all utilities/cable/etc. All they pay is renters insurance.
Should they need advanced care, all we pay more is for the full 3 meals a day (so extra $300/month/person).

Everyone I know who suggests one of these facilities is a HUGE spender and terrible with money management.

$7k a month for rent on top of 300-500k to buy in? That’s laughable.

The average American is in LTC 2 years max. Most people do not spend anywhere close to what you’re suggesting.

I particularly don't understand people who insist on working longer to hit numbers like 10m in retirement assets so that they can afford expensive LTC facilities because the question of LTC is a quality of life issue -- it's driven by the fear of winding up in a substandard care facility. Which I agree is a concern. However working well into my 60s or 70s in order to afford a luxury LTC facility makes no sense because that's a huge decline in my quality of life in my 60s and 70s.

We'll have an 80k per year pension and about 2.5m in retirement assets at 58. College and house will be paid for by then. Good enough for us. I want to enjoy my life for the next couple decades after that. If or when we have to enter LTC we will have the option of selling our home to do it. Good enough. I'm not going spend my 60s working so I can be in the cadillac version of LTC in my 80s with dementia. Willing to roll the dice in order to enjoy my life while I'm young enough for it to really count.

The issue many elderly find is when one spouse needs care and the other doesn't. One needs a nursing home and the other needs to stay in the home, so you can't sell the home. Then there is no money to pay for the spouse who needs the care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Health care costs in our country are a disgrace. Unfortunately people do underestimate this X factor. As Americans we do not age well. As early as our 40s we start developing chronic health issues. In my opinion, your current health and your best guess about your future health are the most important factor as far as how much you need for retirement.

Can you elaborate?

My parents have both had serious health issues in their 60s and 70s but the costs have really not been hard to handle. And they live in a fairly rural place where they sometimes have to go 4 hours to see a specialist. That part sucks but the costs are covered by Medicare and a supplemental plan that is $150 per month. They've had one issue with an expensive prescription but we're able to resolve it by comparison shopping pharmacies. Despite my dad having chronic hear issues and my mom having diabetes, their medical costs are really not a big deal.

If you talk to my parents about the biggest cost increases in retirement they will tell you the cost of cable and Internet (I've tried to get them to cord cut but they love cable) and the price of travel (flights and hotels). And those things have all seem a lot of inflation. But it's not this scary issue of being hit with medical bills for tens of thousands because something isn't covered. Everything is covered.

DP. It is the help when they can no longer live in their homes, either at all, or without help. Assisted Living, Skilled Nursing, or at home care can easily run 200K+.

I know several people who were depending on an inheritance, and now watching that money get drained with eldercare.

That's the thing about planning to have an "UMC" retirement -- if you plan to spending $350-400k a year in retirement, then the $200k in care is covered. The money that you spent on cars and travel when you were healthier gets shifted to care.

This. Many people on this board are vastly overestimating what they need because they fear long term care costs

You clearly haven't had to deal with parents who needed LTC. My parents assumed they wouldn't need it, just never gave it thought. Their kids are now paying for their lack of planning.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As others have said, the cost of care is exorbitant. My mother in law is paying $15k a month for my father in law’s nursing home (technically a rehab, but he cannot do physical therapy anymore and is just in bed for the past year.) they are Umc but not very rich.

OP here. Thanks for mentioning the cost of nursing home care. $15k a month for 2 people would mean $360k a year. It seems like it would take $10m in investments to pay for that. DH also wants both of us, and our parents, to avoid nursing homes but instead have in-home care. Who knows how much that would run.

Find a top notch CCRC and enter while still healthy enough (ideally by 75). Sure you pay $300-500K+ in entry fees, but that covers your nursing/memory/assisted living care when you need it. Good ones mean if you "run out of money/investments" you don't owe anything else---they cannot touch your SS, only your other investments.
My parents are in one, and there are currently 4 people (all widowed women) who are late 90s/over 100 who "have run out of $". They no longer pay anything. Two are still in independent living, the others are in higher level care.
My parents pay their $7K/month for their apartment and that covers 1-2 meals per day and all utilities/cable/etc. All they pay is renters insurance.
Should they need advanced care, all we pay more is for the full 3 meals a day (so extra $300/month/person).

Everyone I know who suggests one of these facilities is a HUGE spender and terrible with money management.

$7k a month for rent on top of 300-500k to buy in? That’s laughable.

The average American is in LTC 2 years max. Most people do not spend anywhere close to what you’re suggesting.

I particularly don't understand people who insist on working longer to hit numbers like 10m in retirement assets so that they can afford expensive LTC facilities because the question of LTC is a quality of life issue -- it's driven by the fear of winding up in a substandard care facility. Which I agree is a concern. However working well into my 60s or 70s in order to afford a luxury LTC facility makes no sense because that's a huge decline in my quality of life in my 60s and 70s.

We'll have an 80k per year pension and about 2.5m in retirement assets at 58. College and house will be paid for by then. Good enough for us. I want to enjoy my life for the next couple decades after that. If or when we have to enter LTC we will have the option of selling our home to do it. Good enough. I'm not going spend my 60s working so I can be in the cadillac version of LTC in my 80s with dementia. Willing to roll the dice in order to enjoy my life while I'm young enough for it to really count.

The issue many elderly find is when one spouse needs care and the other doesn't. One needs a nursing home and the other needs to stay in the home, so you can't sell the home. Then there is no money to pay for the spouse who needs the care.

You can still sell the house in this situation. If you are UMC your house is likely worth a decent amount at this point-- you sell it and buy or rent a small apartment and use the rest of the proceeds for care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As others have said, the cost of care is exorbitant. My mother in law is paying $15k a month for my father in law’s nursing home (technically a rehab, but he cannot do physical therapy anymore and is just in bed for the past year.) they are Umc but not very rich.

OP here. Thanks for mentioning the cost of nursing home care. $15k a month for 2 people would mean $360k a year. It seems like it would take $10m in investments to pay for that. DH also wants both of us, and our parents, to avoid nursing homes but instead have in-home care. Who knows how much that would run.

Find a top notch CCRC and enter while still healthy enough (ideally by 75). Sure you pay $300-500K+ in entry fees, but that covers your nursing/memory/assisted living care when you need it. Good ones mean if you "run out of money/investments" you don't owe anything else---they cannot touch your SS, only your other investments.
My parents are in one, and there are currently 4 people (all widowed women) who are late 90s/over 100 who "have run out of $". They no longer pay anything. Two are still in independent living, the others are in higher level care.
My parents pay their $7K/month for their apartment and that covers 1-2 meals per day and all utilities/cable/etc. All they pay is renters insurance.
Should they need advanced care, all we pay more is for the full 3 meals a day (so extra $300/month/person).

Everyone I know who suggests one of these facilities is a HUGE spender and terrible with money management.

$7k a month for rent on top of 300-500k to buy in? That’s laughable.

The average American is in LTC 2 years max. Most people do not spend anywhere close to what you’re suggesting.

I particularly don't understand people who insist on working longer to hit numbers like 10m in retirement assets so that they can afford expensive LTC facilities because the question of LTC is a quality of life issue -- it's driven by the fear of winding up in a substandard care facility. Which I agree is a concern. However working well into my 60s or 70s in order to afford a luxury LTC facility makes no sense because that's a huge decline in my quality of life in my 60s and 70s.

We'll have an 80k per year pension and about 2.5m in retirement assets at 58. College and house will be paid for by then. Good enough for us. I want to enjoy my life for the next couple decades after that. If or when we have to enter LTC we will have the option of selling our home to do it. Good enough. I'm not going spend my 60s working so I can be in the cadillac version of LTC in my 80s with dementia. Willing to roll the dice in order to enjoy my life while I'm young enough for it to really count.

The issue many elderly find is when one spouse needs care and the other doesn't. One needs a nursing home and the other needs to stay in the home, so you can't sell the home. Then there is no money to pay for the spouse who needs the care.

Can't you first spend down all the assets (retirement or other accounts) solely in their name before you move to sell the house? I don't like the idea of using up joint assets or the healthy spouse’s assets as they may live much longer…

[Anonymous]

Anonymous wrote:I approach it from the expense side. I think for us, we will need $14K per month to stay here in a home mortgage free.

We have a pension that will generate $6K (if taken today at age 55), another $6K (today) in SS for two at FRA. Not all of that income will be there the day we retire.

So for a certain number of years our funding gap is $8K per month or $96K annually. And then that gap goes down to $2K.

We have $4.5M in retirement, brokerage and cash. Assuming a 3% withdraw rate to be conservative.

Why would you want to be mortgage free at that income level? You’ll need the mortgage interest tax deduction and you can free up cash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Fridge 1 - $1200 lasted 10 years
Fridge 2 - $1400 current but on 10th year and will be swapped out at upcoming kitchen remodel.

I’m pretty sure both kept food same cold temperatures as your subzero. Plus I got $17400 to play with. 😁

DP but there is a coolness factor to Sub-Zero fridges. Mine has a glass door and a blue LED light - I've had it for 10 years and sometimes, when entering my kitchen, I still stop and think how cool it is. It's my favorite thing in my entire house. Of course it's not a necessity, but neither is anything besides basic food, clothes, and a roof over one's head. Also, $20K is at the very top of the price range, even for Sub-Zero fridges.

Nothing tastes as good as skinny feels. Stop worshipping your refrigerator

Fruits and vegetables are in the fridge, dingus

[Anonymous]

Anonymous wrote:If you have a paid off house, your expenses during retirement are gonna be absurdly lower than your expenses during your work years. All these people in this thread are over-saving for their needs. Which is not bad, but they’re not optimizing for their own retirement goals, per se.

Retirement expense means long term care for invalid years, not "UMC lifestyle" costs, unless you are adopting your grandkids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Health care costs in our country are a disgrace. Unfortunately people do underestimate this X factor. As Americans we do not age well. As early as our 40s we start developing chronic health issues. In my opinion, your current health and your best guess about your future health are the most important factor as far as how much you need for retirement.

Can you elaborate?

My parents have both had serious health issues in their 60s and 70s but the costs have really not been hard to handle. And they live in a fairly rural place where they sometimes have to go 4 hours to see a specialist. That part sucks but the costs are covered by Medicare and a supplemental plan that is $150 per month. They've had one issue with an expensive prescription but we're able to resolve it by comparison shopping pharmacies. Despite my dad having chronic hear issues and my mom having diabetes, their medical costs are really not a big deal.

If you talk to my parents about the biggest cost increases in retirement they will tell you the cost of cable and Internet (I've tried to get them to cord cut but they love cable) and the price of travel (flights and hotels). And those things have all seem a lot of inflation. But it's not this scary issue of being hit with medical bills for tens of thousands because something isn't covered. Everything is covered.

DP. It is the help when they can no longer live in their homes, either at all, or without help. Assisted Living, Skilled Nursing, or at home care can easily run 200K+.

I know several people who were depending on an inheritance, and now watching that money get drained with eldercare.

That's the thing about planning to have an "UMC" retirement -- if you plan to spending $350-400k a year in retirement, then the $200k in care is covered. The money that you spent on cars and travel when you were healthier gets shifted to care.

This. Many people on this board are vastly overestimating what they need because they fear long term care costs

You clearly haven't had to deal with parents who needed LTC. My parents assumed they wouldn't need it, just never gave it thought. Their kids are now paying for their lack of planning.

There's a balance between "I must have 10m+ to retire or I'll never be able to afford 15 years in the nicest LTC facility I can find" and "who cares, the kids will figure it out."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As others have said, the cost of care is exorbitant. My mother in law is paying $15k a month for my father in law’s nursing home (technically a rehab, but he cannot do physical therapy anymore and is just in bed for the past year.) they are Umc but not very rich.

OP here. Thanks for mentioning the cost of nursing home care. $15k a month for 2 people would mean $360k a year. It seems like it would take $10m in investments to pay for that. DH also wants both of us, and our parents, to avoid nursing homes but instead have in-home care. Who knows how much that would run.

Find a top notch CCRC and enter while still healthy enough (ideally by 75). Sure you pay $300-500K+ in entry fees, but that covers your nursing/memory/assisted living care when you need it. Good ones mean if you "run out of money/investments" you don't owe anything else---they cannot touch your SS, only your other investments.
My parents are in one, and there are currently 4 people (all widowed women) who are late 90s/over 100 who "have run out of $". They no longer pay anything. Two are still in independent living, the others are in higher level care.
My parents pay their $7K/month for their apartment and that covers 1-2 meals per day and all utilities/cable/etc. All they pay is renters insurance.
Should they need advanced care, all we pay more is for the full 3 meals a day (so extra $300/month/person).

Everyone I know who suggests one of these facilities is a HUGE spender and terrible with money management.

$7k a month for rent on top of 300-500k to buy in? That’s laughable.

The average American is in LTC 2 years max. Most people do not spend anywhere close to what you’re suggesting.

I particularly don't understand people who insist on working longer to hit numbers like 10m in retirement assets so that they can afford expensive LTC facilities because the question of LTC is a quality of life issue -- it's driven by the fear of winding up in a substandard care facility. Which I agree is a concern. However working well into my 60s or 70s in order to afford a luxury LTC facility makes no sense because that's a huge decline in my quality of life in my 60s and 70s.

We'll have an 80k per year pension and about 2.5m in retirement assets at 58. College and house will be paid for by then. Good enough for us. I want to enjoy my life for the next couple decades after that. If or when we have to enter LTC we will have the option of selling our home to do it. Good enough. I'm not going spend my 60s working so I can be in the cadillac version of LTC in my 80s with dementia. Willing to roll the dice in order to enjoy my life while I'm young enough for it to really count.

The issue many elderly find is when one spouse needs care and the other doesn't. One needs a nursing home and the other needs to stay in the home, so you can't sell the home. Then there is no money to pay for the spouse who needs the care.

Highly recommend planning for a CCRC. You both go into independent living by 70/75ish. Then when one needs more advanced care, you don't pay much more for that (typically only cost for full 3 meals a day/food). Both are in the same complex and can typically easily walk and visit the other. It means selling your home and paying an entry fee, but it's the safest path to "most affordable" LTC if you have enough money.
My own parents did it. We had to pay the $350K entry fee but for people never making more than $45K/year they had enough otherwise to qualify. If you have $1.1M+ in all assets, you would qualify.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People over-budget for and over-idealize travel. I’ve done my fair share of exotic travel and found that people everywhere are pretty much doing the same thing (imagine that!). My own bed, couch, food and car are great for me - I don’t need to rent someone else’s to be happy. Sure, I like a trip every now and then, but I’m not going to work longer to spend $25-50k year on travel.

As a retired person who spends a lot on travel, relatively little of it is globe trotting. We travel to see family, we travel to take grandchildren to a sporting event, we travel to help a younger family member move to a new town, we travel within the US to be in a better climate at certain times of the year, etc etc. It adds up.

This is my parents' experience--travelling to see kids and grandkids spread across the country eats up more than their 1x a year "vacation" (and we all travel to see them at the holidays).

[Anonymous]

What is UMC?

[Anonymous]

Anonymous wrote:What is UMC?

Upper middle class. Well off but not wealthy. It's fuzzy though because a lot of people on this forum consider themselves upper middle class when a lot of us consider them wealthy. Like the people in this thread who insist your retirement plans accommodate the ability to spend 20k+ on a sub zero fridge.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What is UMC?

Upper middle class. Well off but not wealthy. It's fuzzy though because a lot of people on this forum consider themselves upper middle class when a lot of us consider them wealthy. Like the people in this thread who insist your retirement plans accommodate the ability to spend 20k+ on a sub zero fridge.

Ha thanks that's me and i asked the question lol.