How much do people have saved for retirement?

[Anonymous]

Anonymous wrote:I have friends living large on social security plus a little down in Argentina and Colombia and I have friends barely getting by in ny suburbs on 5-10 million portfolios. It depends on what you need to spend to make you happy.

what does a little down mean?

[Anonymous]

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Anonymous wrote:This is a dumb question. On dcum, it turns into a pissing match and everyone on here seems to have $1+ million by late 20s/30s, which is an absolute farce.

Median numbers are easily searchable. Your avg American has way less than $200k by their 40s.

Not in this area. OP will struggle with what she has.

Except you'd have to be a moron to stay in this area during retirement.

Why? If your house is already paid for when you retire, your housing expense will be limited to taxes + utilities. Not much different than anywhere else, considering there are many parts of the country with property tax rates higher than DC metro. Most retirees aren't heading out to the pricey trendy bars and restaurants. If you can afford it, DC is a great place to be a retiree - tons of free cultural activities that you can take advantage of when you have time on your hands.

There are states where there are 0% taxes on retirement account withdrawals or 0% income taxes. Plus done states have other perks like reduced property taxes, lower rates for insurance on basically everything, and much lower cost of living overall. Paying 0% income tax on 401k income is huge amounts of money to consider. It isn't worth it at all to stay in this region in retirement to pay 3x sticker price on everything just to have access to amenities and a job market you no longer need.

Where is that?

Here you go: https://www.kiplinger.com/slideshow/retirement/t054-s001-taxes-in-retirement-how-all-50-states-tax-retirees/index.html

Well, there's 0 state tax occasionally, often made up by higher sales or income taxes in places, but of course there's still federal which is the far bigger tax issue.

The best states for retirees have special rules for retirement income & property tax for seniors. States like Texas, with zero income tax for everyone, but high property taxes, are not good for retirees. However, a state that, for example, does not tax pensions, waives state property tax for seniors and has very low property tax, would be really good. You need to read the fine print.

Actually Texas has an over-65 Homestead exemption that keeps property taxes in check for seniors.

[Anonymous]

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Anonymous wrote:This is a dumb question. On dcum, it turns into a pissing match and everyone on here seems to have $1+ million by late 20s/30s, which is an absolute farce.

Median numbers are easily searchable. Your avg American has way less than $200k by their 40s.

Not in this area. OP will struggle with what she has.

Except you'd have to be a moron to stay in this area during retirement.

Why? If your house is already paid for when you retire, your housing expense will be limited to taxes + utilities. Not much different than anywhere else, considering there are many parts of the country with property tax rates higher than DC metro. Most retirees aren't heading out to the pricey trendy bars and restaurants. If you can afford it, DC is a great place to be a retiree - tons of free cultural activities that you can take advantage of when you have time on your hands.

There are states where there are 0% taxes on retirement account withdrawals or 0% income taxes. Plus done states have other perks like reduced property taxes, lower rates for insurance on basically everything, and much lower cost of living overall. Paying 0% income tax on 401k income is huge amounts of money to consider. It isn't worth it at all to stay in this region in retirement to pay 3x sticker price on everything just to have access to amenities and a job market you no longer need.

Where is that?

Here you go: https://www.kiplinger.com/slideshow/retirement/t054-s001-taxes-in-retirement-how-all-50-states-tax-retirees/index.html

Well, there's 0 state tax occasionally, often made up by higher sales or income taxes in places, but of course there's still federal which is the far bigger tax issue.

The best states for retirees have special rules for retirement income & property tax for seniors. States like Texas, with zero income tax for everyone, but high property taxes, are not good for retirees. However, a state that, for example, does not tax pensions, waives state property tax for seniors and has very low property tax, would be really good. You need to read the fine print.

Actually Texas has an over-65 Homestead exemption that keeps property taxes in check for seniors.

The freeze on property taxes at 65 doesn’t help if you move in from somewhere else. There is an additional reduction, but it varies from place to place & generally doesn’t offset How high the taxes are to begin with (unless you’re moving in from somewhere like Westchester County, in which case, they may not look so bad).

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have friends living large on social security plus a little down in Argentina and Colombia and I have friends barely getting by in ny suburbs on 5-10 million portfolios. It depends on what you need to spend to make you happy.

what does a little down mean?

An income of 2500/month. Social security plus some retirement bucks for upper middle class lifestyle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I always feel that DCUM oversaves

I don't get why people need over 100k in retirement. For most people SS almost gets you halfway there. And SS isn't going away, the age might go up and benefits might slightly decrease but most people should be expecting at least 2500 a month if they are working

Main point being 1-3 million retirement account fund at age 60-65 is plenty.

Some realistic benchmarks 1 million at 55

500k at 45

250k at 35

Because I like to take at least one ski trip out west each year. Because I plan on spending a month in Europe every year. Because I live cooking nice dishes and eating out at good restaurants. Because I plan to have a seasonal home. Because I want to enjoy myself, after busting my ass working.

For me, the point of retirement isn't simply to stop working; it's to enjoy myself and do the things that I couldn't do because I was working. Many of those things cost money. I am 48, with a NW of $2.5m, and theoretically could stop working now. It wouldn't be dying, but it would sure feel like it.

Do you have health insurance if you retire at 48? If you have that, not sure what you are waiting.

[Anonymous]

46 and 47.

I have about 700k. I started saving 14% in my 401k in a fund tracking the S&P at my first job post college ($35k salary). Had about a 5 year hiatus when I went on some adventures. Then back to it. Last 5 years have been maxing it out. Changed it to about 20% bonds then, too.

Spouse has about $300k. Late start at job paying beyond paycheck to paycheck living.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I always feel that DCUM oversaves

I don't get why people need over 100k in retirement. For most people SS almost gets you halfway there. And SS isn't going away, the age might go up and benefits might slightly decrease but most people should be expecting at least 2500 a month if they are working

Main point being 1-3 million retirement account fund at age 60-65 is plenty.

Some realistic benchmarks 1 million at 55

500k at 45

250k at 35

Because I like to take at least one ski trip out west each year. Because I plan on spending a month in Europe every year. Because I live cooking nice dishes and eating out at good restaurants. Because I plan to have a seasonal home. Because I want to enjoy myself, after busting my ass working.

For me, the point of retirement isn't simply to stop working; it's to enjoy myself and do the things that I couldn't do because I was working. Many of those things cost money. I am 48, with a NW of $2.5m, and theoretically could stop working now. It wouldn't be dying, but it would sure feel like it.

Do you have health insurance if you retire at 48? If you have that, not sure what you are waiting.

Not pp, but you do realized that the 4-5% spend rate rule of thumb assumes that you're retiring at 65 (or later) and depleting capital? If you're retiring at 48, you can spend a far smaller percentage and expect your money to last your entire life. So, instead of $125,000 a year, it's more like $75,000 a year (pre-tax). This is even before you take into account the cost of health care when you don't qualify for Medicare. Forget ski trips, spending a month in Europe and a second home (although you wouldn't do that on $125k pre-tax, anyway).

[Anonymous]

40 and 46 with about 850k in retirement, 100k in equity, and 150k per a child in college savings. We have a lot of student loan debt but that along with the house should be paid off before retirement. We are not depending on any SS.

[Anonymous]

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Anonymous wrote:You need to think about long term care. These unexpected expenses can wipe you out. Don't rely on Medicaid because you could end up in a horrible facility.

This a hundred times over. My MIL's expenses are 10K a month. My fathers are 25K. DH and I are trying to save a million dollars just to be used for this when our time comes. Not even sure that will be enough but that is the best we can do.

I'm sorry, but that's not real life if one needs $25k/month just to breathe, with a tube down the throat and mind gone. My former coworkers' family kept their 96 y/o aunt with emphysema stuck in bed for years with an oxygen tank. She was lucid and would beg them to let her go.

$25k seems incredibly high. Is that for in-home care?
FIL is in a nice facility in a flyover state that costs a bit less than $8k per month.

[Anonymous]

I agree that $25k per month seems incredibly high. We recently went through LTC for a parent with Alzheimers. We spent about a little over $100k per year for 3 years for a really nice facility in La Jolla, CA. During that time, real life expenses dropped by a lot since there wasn't any travel, eating out, events to go to, etc. Most people don't spend 3 years in a facility, especially if there is a spouse or family nearby.

[Anonymous]

Anonymous wrote:I agree that $25k per month seems incredibly high. We recently went through LTC for a parent with Alzheimers. We spent about a little over $100k per year for 3 years for a really nice facility in La Jolla, CA. During that time, real life expenses dropped by a lot since there wasn't any travel, eating out, events to go to, etc. Most people don't spend 3 years in a facility, especially if there is a spouse or family nearby.

I think the average stay in a long term care facility is 28 months. About 12% stay 5 years or longer. It does happen -- I had an otherwise healthy grandmother with dementia who needed in home care for about five years, and needed to be in a memory care facility for over ten years (she lived to be 95).

[Anonymous]

I just used a retirement calculator available online and it said that we need to save $1,330 per month for retirement based on what we have saved now. We are beating that significantly annualized. It expects that we will need 9M to retire! That seems overly optimistic and a bit nuts. I feel like you can drive yourself crazy with these calculators, esp. if you are under age 40.

[Anonymous]

I save a lot because I know home care for elderly is $$$$.

[Anonymous]

Anonymous wrote:I save a lot because I know home care for elderly is $$$$.

Yes but the vast majority of Americans could never afford that level of care. I do not want to save every penny for 65 years only to watch it all go down the drain in My last three years of life where I don’t even appreciate it.

[Anonymous]

Anonymous wrote:I just used a retirement calculator available online and it said that we need to save $1,330 per month for retirement based on what we have saved now. We are beating that significantly annualized. It expects that we will need 9M to retire! That seems overly optimistic and a bit nuts. I feel like you can drive yourself crazy with these calculators, esp. if you are under age 40.

Garbage in, garbage out.

You did not put in accurate numbers if you got $9M out. Unless you have multiple homes and expect to need a ton of disposable income.