What's your "number"?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am 50. My retirement plan is to work to 65, and retire with 3x my current 401K balance, or about 2 mil. We will move to a lower cost of living area, and get a new house with the equity in our house (another 500K by then in today's dollars).

That plus soc. sec. should be enough. 2 million will give me about 7000/mo, and soc sec should be another 2K per month.

How is $2M giving you $7000 month? serious question.

5% return or so? SP500 long term average is superior to that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Currently 45, a fed, making $160K a year and saving about 10% of my salary in the Federal retiree system.

My goal is to retire at at 60. At that point, I expect to have college paid for and done for two kids, and have about $1 million in home equity. That will allow us plenty of options to stay in place, sell and move to smaller condo and buy vacation home, or sell and just put the equity into savings.

I will have earned a federal pension - which I will be able to collect at 60 - of about $75,000 per year.

Based on current retirement savings - about $400,000 - plus saving 10% more per year - I expect to have about $1.7 million saved. Figure using about 4% of that annually gives me an annual income from savings of about $70,000

Add in Social Security for me and DW and that gets us right to about $170,000 a year.

It's not the $10-25 million that other posters are talking about, but I think we can retire well and be happy with what I describe above.

PP, can you please explain how federal pensions work? Are they still being offered for new employees? How long does it take to earn one? How is it determined how much it will pay out and for how long? Thanks.

Quick summary:

You must work at least five years in federal service to qualify.

The value of the pension = 1.1% of your average highest three-year salary X your years of service

You can begin collecting at age 62, and there is a cost of living adjustment

Details here: https://www.opm.gov/retirement-services/fers-information/

So if your average high salary is 150k and you work for 20 years for the govt your pension is only 33000? 150k x 1.1% x 20?

Correct. The pension is set so if you work for the government for 30 years you would collect about a third of your salary at age 62, and then it would adjust upward with inflation.

Confused about this. My spouse is a federal employee and contributes to the TSP program. Our understanding is that is the only pension he will be eligible, what we have saved ourselves. From the link you provided , it mentions a Basic Benefit or Service plan. What the heck is that? Spouse works for Department of Veteran's affairs, if it matters.

When was he hired? Doesn't he have funds taken out of his paycheck for this? Check his leave and earnings statement. Look for "Retire, FERS with a code "k" on his leave slip under Deductions. That would be the 1.1% times years. -- it works out to about 1/3 of whatever you make now. It's taxed as income, remember. Your TSP adds to that.

How many years do they pay you the pension for? Until you die?

Yes. And there is spousal survivor benefits too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am 50. My retirement plan is to work to 65, and retire with 3x my current 401K balance, or about 2 mil. We will move to a lower cost of living area, and get a new house with the equity in our house (another 500K by then in today's dollars).

That plus soc. sec. should be enough. 2 million will give me about 7000/mo, and soc sec should be another 2K per month.

How is $2M giving you $7000 month? serious question.

5% return or so? SP500 long term average is superior to that.

Historically, yes but most experts expect future real return from stocks to be 5% or less. Also, in retirement most people have less than half of their portfolio in equities, meaning your overall portfolio return will be less than the SP500. Also, most experts consider a withdrawl rate of 3-4% safe. So if you want to be relatively certain you won't deplete your retirement savings, you shouldn't take more than 80k/year = $6500/month (before tax) = $5000/month after tax. Check your numbers.

[Anonymous]

Anonymous wrote:This thread is completely depressing. It makes me wonder again if we should ask jeff to make a separate money thread for the crazy rich so that normal people can discuss normal issues without getting sidetracked with this kind of bullshit.

I'd ignore most of these ludicrous targets.

We both retired in our late 40s', we've put three children through college - one at a state school and two at private colleges where the tuition based on today's cost would be well over $50K annually.

We live in a house that is valued at $1.5 million and are still making mortgage payments and have a second home abroad, that we own outright. We are looking to downsize our primary home because we don't need such a large house.

We live well, vacation overseas a couple of times a year.

And here is the clincher: we did not have a net worth resembling anything like the numbers stated on this thread when we retired and our net worth today is about half what it was when we retired. We don't ever worry about whether we will have enough money down the line. Absent any financial catastrophe we will be fine.

So my advice for anyone who is even mildly disillusioned because they are not and will not reach these targets is to use one of the calculators available for estimating what you will need when you retire to maintain whatever lifestyle you think is appropriate for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If people here have and anticipate this much, what about the rest of the country. I am linking this thread to the regional papers.

This thread is comical. I still do t understand what these people are going to be spending all that money on.

I'm the OP. I said $6mm. Here's how I get there:

3x kids under 4. Assume 14-18 years from now, 4-year college will cost close to $200k/year = $800k per kid = $2.4mm.
I want (don't need, but this is an aspirational post) a nice vacation home = $1mm.
I want to retire by 55 ... assuming $80k min per year living expenses and 30+ years of coverage = $2.4mm.

That's $5.8mm and there's plenty left I'd like to do, let alone leave some for my kids or hopefully grandkids. Now, that doesn't assume any investment return on that money, but then again, with inflation that $80k/year could easily be more like $200k in 20 years.

I don't think any of that is comical at all ... and certainly not likely to raise some firestorm of controversy as implied by the PP that wants to "link this thread to regional papers."

OP CNN calculator said we needed $6M to retire in 3 years and still pay 2 college tuitions. I must say I did not find that comical. Our MS principal said at this time takes over $2M per child in this area to raise from baby (and send to college? he wasn't clear)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If people here have and anticipate this much, what about the rest of the country. I am linking this thread to the regional papers.

This thread is comical. I still do t understand what these people are going to be spending all that money on.

I'm the OP. I said $6mm. Here's how I get there:

3x kids under 4. Assume 14-18 years from now, 4-year college will cost close to $200k/year = $800k per kid = $2.4mm.
I want (don't need, but this is an aspirational post) a nice vacation home = $1mm.
I want to retire by 55 ... assuming $80k min per year living expenses and 30+ years of coverage = $2.4mm.

That's $5.8mm and there's plenty left I'd like to do, let alone leave some for my kids or hopefully grandkids. Now, that doesn't assume any investment return on that money, but then again, with inflation that $80k/year could easily be more like $200k in 20 years.

I don't think any of that is comical at all ... and certainly not likely to raise some firestorm of controversy as implied by the PP that wants to "link this thread to regional papers."

OP CNN calculator said we needed $6M to retire in 3 years and still pay 2 college tuitions. I must say I did not find that comical. Our MS principal said at this time takes over $2M per child in this area to raise from baby (and send to college? he wasn't clear)

Right and obviously none who makes under 50k a year can "afford" children. You're out of touch.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Currently 45, a fed, making $160K a year and saving about 10% of my salary in the Federal retiree system.

My goal is to retire at at 60. At that point, I expect to have college paid for and done for two kids, and have about $1 million in home equity. That will allow us plenty of options to stay in place, sell and move to smaller condo and buy vacation home, or sell and just put the equity into savings.

I will have earned a federal pension - which I will be able to collect at 60 - of about $75,000 per year.

Based on current retirement savings - about $400,000 - plus saving 10% more per year - I expect to have about $1.7 million saved. Figure using about 4% of that annually gives me an annual income from savings of about $70,000

Add in Social Security for me and DW and that gets us right to about $170,000 a year.

It's not the $10-25 million that other posters are talking about, but I think we can retire well and be happy with what I describe above.

PP, can you please explain how federal pensions work? Are they still being offered for new employees? How long does it take to earn one? How is it determined how much it will pay out and for how long? Thanks.

Quick summary:

You must work at least five years in federal service to qualify.

The value of the pension = 1.1% of your average highest three-year salary X your years of service

You can begin collecting at age 62, and there is a cost of living adjustment
Details here: https://www.opm.gov/retirement-services/fers-information/

Incorrect about age 62 -- it's actually in a table according to when you were born. For me, the age is 56. There is also a small supplemental social security payment between that age and 62, about half of whatever your SS will be in the future. It makes up for the difference between the CSRS and FERS systems.

You can retire earlier based on the minimum retirement age in the table, but then you only get 1% of your high three for each year of service (instead of 1.1%).

https://www.opm.gov/retirement-services/fers-information/computation/

Also you need at least 30 years of service at that minimum age, otherwise your benefit will be reduced.

https://www.opm.gov/retirement-services/fers-information/eligibility/

[Anonymous]

about 50. Most when I was a slut in college and late 20s. Settled down mid 30s and have been good since.

[Anonymous]

Sitting here with the $2M. Stocks that pay dividends? Do they still exist? It seems like most of you have pensions of one kind or another. Without a pension, in your 50s, it seems like there are many expense and it is not enough. If you take stocks that went up 5% and sell them remember you have to pay a fee and then tax on the "income" so a 5% rise doesn't equal 5% total. And nobody here has any stocks that went down....?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If people here have and anticipate this much, what about the rest of the country. I am linking this thread to the regional papers.

This thread is comical. I still do t understand what these people are going to be spending all that money on.

I'm the OP. I said $6mm. Here's how I get there:

3x kids under 4. Assume 14-18 years from now, 4-year college will cost close to $200k/year = $800k per kid = $2.4mm.
I want (don't need, but this is an aspirational post) a nice vacation home = $1mm.
I want to retire by 55 ... assuming $80k min per year living expenses and 30+ years of coverage = $2.4mm.

That's $5.8mm and there's plenty left I'd like to do, let alone leave some for my kids or hopefully grandkids. Now, that doesn't assume any investment return on that money, but then again, with inflation that $80k/year could easily be more like $200k in 20 years.

I don't think any of that is comical at all ... and certainly not likely to raise some firestorm of controversy as implied by the PP that wants to "link this thread to regional papers."

OP CNN calculator said we needed $6M to retire in 3 years and still pay 2 college tuitions. I must say I did not find that comical. Our MS principal said at this time takes over $2M per child in this area to raise from baby (and send to college? he wasn't clear)

Right and obviously none who makes under 50k a year can "afford" children. You're out of touch.

In this area that is poverty. No one said you could not live in poverty with your kids-- go right ahead.

[Anonymous]

8 million

I don't know if we'll get there or not. We're early-mid thirties and are only at 2 million.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Currently 45, a fed, making $160K a year and saving about 10% of my salary in the Federal retiree system.

My goal is to retire at at 60. At that point, I expect to have college paid for and done for two kids, and have about $1 million in home equity. That will allow us plenty of options to stay in place, sell and move to smaller condo and buy vacation home, or sell and just put the equity into savings.

I will have earned a federal pension - which I will be able to collect at 60 - of about $75,000 per year.

Based on current retirement savings - about $400,000 - plus saving 10% more per year - I expect to have about $1.7 million saved. Figure using about 4% of that annually gives me an annual income from savings of about $70,000

Add in Social Security for me and DW and that gets us right to about $170,000 a year.

It's not the $10-25 million that other posters are talking about, but I think we can retire well and be happy with what I describe above.

PP, can you please explain how federal pensions work? Are they still being offered for new employees? How long does it take to earn one? How is it determined how much it will pay out and for how long? Thanks.

Quick summary:

You must work at least five years in federal service to qualify.

The value of the pension = 1.1% of your average highest three-year salary X your years of service

You can begin collecting at age 62, and there is a cost of living adjustment
Details here: https://www.opm.gov/retirement-services/fers-information/

Incorrect about age 62 -- it's actually in a table according to when you were born. For me, the age is 56. There is also a small supplemental social security payment between that age and 62, about half of whatever your SS will be in the future. It makes up for the difference between the CSRS and FERS systems.

You can retire earlier based on the minimum retirement age in the table, but then you only get 1% of your high three for each year of service (instead of 1.1%).

https://www.opm.gov/retirement-services/fers-information/computation/

Also you need at least 30 years of service at that minimum age, otherwise your benefit will be reduced.

https://www.opm.gov/retirement-services/fers-information/eligibility/

NP. Thank you for this awesome helpful post. DH makes the minimum age for retirement!

[Anonymous]

Anonymous wrote:about 50. Most when I was a slut in college and late 20s. Settled down mid 30s and have been good since.

Awesome! Can we take this over to the adult talk board? Especially the college years!

[Anonymous]

Anonymous wrote:

Anonymous wrote:This thread is completely depressing. It makes me wonder again if we should ask jeff to make a separate money thread for the crazy rich so that normal people can discuss normal issues without getting sidetracked with this kind of bullshit.

I'd ignore most of these ludicrous targets.

We both retired in our late 40s', we've put three children through college - one at a state school and two at private colleges where the tuition based on today's cost would be well over $50K annually.

We live in a house that is valued at $1.5 million and are still making mortgage payments and have a second home abroad, that we own outright. We are looking to downsize our primary home because we don't need such a large house.

We live well, vacation overseas a couple of times a year.

And here is the clincher: we did not have a net worth resembling anything like the numbers stated on this thread when we retired and our net worth today is about half what it was when we retired. We don't ever worry about whether we will have enough money down the line. Absent any financial catastrophe we will be fine.

So my advice for anyone who is even mildly disillusioned because they are not and will not reach these targets is to use one of the calculators available for estimating what you will need when you retire to maintain whatever lifestyle you think is appropriate for you.

We have no mortgage or other debt and negligible childcare expenses, and we still burn through 100K a year. I don't think the targets are ridiculous if you're not pretty frugal. And why would I retire if I had to be frugal?

[Anonymous]

Anonymous wrote:8 million

I don't know if we'll get there or not. We're early-mid thirties and are only at 2 million.

You will. We hit 2 million at ages 44 and 46 and we're aiming for 6 million total.