How much do you need for an UMC retirement?

[Anonymous]

I know the answer will depend on a lot of factors, but how much invested do you think would be enough in the DMV area for a couple? When I was given a presentation by a financial advisor in 2010, the answer was $2M, presumably to generate $80k of income per year in retirement at a 4% withdrawal rate. So is it $3M now, or more?

[Anonymous]

I like to read the financial samurai as a guide for UMC investments and savings. There’s a good post there on 401k savings by age.

[Anonymous]

UMC income is likely $250,000, so you will need over $6 million in income generating assets.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:UMC income is likely $250,000, so you will need over $6 million in income generating assets.

Two spouses earning max social security benefit is about 92k annually. That brings the asset side to about 4M.

On the other hand, the actuarial rate of return is significantly overestimated in most retirement planning calculators.

[Anonymous]

Anonymous wrote:UMC income is likely $250,000, so you will need over $6 million in income generating assets.

Do you really need that as a senior citizen? House is paid for. If it’s a large house it’s a good time to downsize. You’d be debt free. Your bills would be taxes, cars, utilities, travel if you want. Not all that much in expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:UMC income is likely $250,000, so you will need over $6 million in income generating assets.

Do you really need that as a senior citizen? House is paid for. If it’s a large house it’s a good time to downsize. You’d be debt free. Your bills would be taxes, cars, utilities, travel if you want. Not all that much in expenses.

+1 and you are no longer setting aside my ney for college or retirement. When I see people who feel they need 200k or more in retirement, I assume they are planning for certain unusual expenses-- vacation home, a boat, high end travel (flying first class, 5 star hotels). You're really getting into the upper end of a UMC lifestyle there, if not just UC.

DH and I have discussed this extensively and our wants are simpler than that. Travel for sure, but we don't care about first class anything and a lot of our bucket list trips are things where plane tickets are a bit spendy but otherwise the thing holding us back from doing it is time. Stuff like hiking in Peru or visiting Southeast Asia where it's just very hard to take enough consecutive days from work to travel how we want. But we aren't looking to spend a lot of time at high end beach resorts or 5-star hotels in Paris or London. We don't even like fine dining that much.

My other wants are so prosaic. Room to garden. I definitely want to be able to afford a weekly housecleaner no matter what. We want to be able to buy high quality groceries. I would like to have annual memberships to a museum or two.

When we've added it all up we're barely breaking 90k or so in expenses. With certain big trips we could go up to 130-150k (safari or going all out on a Hawaiian vacation). But with a paid off house we live i just don't know what we'd spend 200k on.

[Anonymous]

My planned expenses are driven up by my desire to fund any grandchildren’s Montessori school through elementary school. Also, I want to find their college education. I have no grandchildren but estimate 2-3 which means easily another $50k/year over my base expenses of $100k. Adding health insurance at $20k and tax at $25k gives me roughly $200k total required. SS will cover $60k eventually so I am shooting for $4m-$5m. And that’s realistic for us.

[Anonymous]

Anonymous wrote:My planned expenses are driven up by my desire to fund any grandchildren’s Montessori school through elementary school. Also, I want to find their college education. I have no grandchildren but estimate 2-3 which means easily another $50k/year over my base expenses of $100k. Adding health insurance at $20k and tax at $25k gives me roughly $200k total required. SS will cover $60k eventually so I am shooting for $4m-$5m. And that’s realistic for us.

I can see that. Not the Montessori thing which wouldn't matter to me but wanting to spend more on grandkids. Though we aren't factoring SS into our budget so that also gives us more wiggle room. We'll have 80k in pension income and are looking to have another 80k in retirement income (about 2m in retirement assets). SS will be on top of that.

[Anonymous]

We need $250k. This will enable us to travel business class to Europe twice a year and maintain our two homes. Beyond that we don’t have expensive tastes. Old cars etc.

[Anonymous]

We are aiming for $10m in invested assets.

[Anonymous]

We should have about 100k a year in combined fed pensions. Current dividends on my non-retirement portfolio are about $30,000. This is enough for our expected expenses in retirement. My parents are living (late 70s) but have 3 homes, each worth roughly 5 million dollars, and my siblings and I will divvy those up, each taking one. Two are in popular retirement destination and DH and I will either keep one or use the money from that fine sale to buy a second home or travel.

I’ve told DH that I’d like to earmark 1 million per future grandkid for schooling and a small investment account to help with a first apartment or whatever, so we are planning to use an anticipated inheritance for that.

[Anonymous]

You’ll get such a wide range of answers here. For example, 250k is a lot.

I’m part of a financial forum and most who have been retired a while say they spend less than they planned. Some do choose to pay a lot for health insurance plans. Those on the ACA are paying low costs for good care.

I’d consider:
Any deferred maintenance (roof, etc)
Mortgage and property taxes
Travel
Utilities
Groceries
Cars
Etc

I added ours up and could barely get past $50k / year and that included traveling.

If you don’t calculate correctly, you might end up thinking you have to work longer than you do. No problem working longer if that’s your life goal but most want to have more time for other pursuits.

[Anonymous]

From my parents’ recent experience: too many people do not budget in the astronomical costs of assisted living, nursing homes, memory care, etc. $100k/year could be great for a healthy couple in their 60s, but it won’t cover even half the costs of good care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:UMC income is likely $250,000, so you will need over $6 million in income generating assets.

Do you really need that as a senior citizen? House is paid for. If it’s a large house it’s a good time to downsize. You’d be debt free. Your bills would be taxes, cars, utilities, travel if you want. Not all that much in expenses.

If only elder people would downsize. Most don't until there is an emergency.