What is your net worth if you are 55 years of age

[Anonymous]

About $4M in retirement accounts, $2.5M in real estate, 500K in nonretirement savings, $300 in college savings. So $7.3M total. Ages 55 and 58. Would really like to get to $9-10M before we start tapping it, but that may not happen. Two parents will soon need elder care, and DH wants to retire soon.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Late 50s and retired for a half dozen years or so. Net worth as of today: $7.3 million. $4.1 million in retirement accounts, $1.4 million in brokerage/savings accounts, $1.8 million in home equity. Kids have all graduated college already.

What do you do for healthcare and how much does it cost all in?

We were lucky. My former employer let us stay on the company group plan and pay the full premium. It's about $1300 a month. Our total health care costs are about $25k a year for premiums and out of pocket expenses combined. A good portion is deductible because it's more than 7.5 percent of our gross income. It's our single biggest expense but very doable.

That is eye-opening.

It sure is. And we're both healthy. But it's also worth noting that it can't get much higher than this either. We hit the deductibles every year, and that's that. And for further context, we draw down about $200k a year to live on, and our federal taxes most years are zero. So $25k is, again, pretty doable.

Could you provide some thoughts on the 200K$ expense during retirement? What do you spend it on? I estimated around $180K$ per year but I was told this estimate may be too low.

NP here but I've tried to think about some of this but haven't done a detailed budget. We currently put at least $10k/month on credit cards for a range of expenses - home related, travel, etc. So assuming that keeps up that's $120k to start with. RE taxes are $20k (2 houses). We spend about $8000/year on a cleaning service. We spend a lot on landscaping for both houses too - probably $10k/year with no special projects. We currently spend a ton on insurance and deductibles ($25k+/year) but I assume Medicare will actually be less expensive. Car maintenance and insurance for 2 cars. Home repairs always seem to come up, or home improvement projects - I'd guess they'd average at least $10-20k/year.

Maybe if we sell one of the houses and move to a condo some of the maintenance is lower but then it gets replaced with a condo fee. Or we could do our own cleaning and landscaping, but the reality is it wouldn't be feasible for that long.

I'm sure I'm missing big categories. Anyway I am assuming we will need $200-250k after tax (which is less than we have today).

[Anonymous]

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Anonymous wrote:

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Anonymous wrote:Seriously starting to worry since you all have such high numbers. At 55 and 47, we have $220k income and $1.4M net worth that includes retirement, brokerage, home equity, and 529. Will have $100k pension (pretax). My greatest worry is elder care because the costs are astronomical.

PP, you have a $100,000 pension!! Relax, you have nothing to worry about.

But the entire thing can be easily consumed by elder care. I’m seeing it now with my parents.

Not for the first 20 years!

Sadly, a lot of people need care starting in their late 60s or early 70s.

Have these people not taken care of their health, or just had bad luck? Look at Biden -- he is 78 years old and not in need of elder care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Seriously starting to worry since you all have such high numbers. At 55 and 47, we have $220k income and $1.4M net worth that includes retirement, brokerage, home equity, and 529. Will have $100k pension (pretax). My greatest worry is elder care because the costs are astronomical.

PP, you have a $100,000 pension!! Relax, you have nothing to worry about.

But the entire thing can be easily consumed by elder care. I’m seeing it now with my parents.

Not for the first 20 years!

Sadly, a lot of people need care starting in their late 60s or early 70s.

Have these people not taken care of their health, or just had bad luck? Look at Biden -- he is 78 years old and not in need of elder care.

DP, but I think this is about hedging bets. You can't count on not needing elder care. If you don't need it, great. But if you do, it can be disastrous. My mother's elder care right now is 12K/month and she's 82. My DH's mother lived to 90 and didn't need any elder care ever. Our solution is to do the best we can to take care of ourselves and pay for PPO healthcare and LTC insurances, on top of investments.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Late 50s and retired for a half dozen years or so. Net worth as of today: $7.3 million. $4.1 million in retirement accounts, $1.4 million in brokerage/savings accounts, $1.8 million in home equity. Kids have all graduated college already.

What do you do for healthcare and how much does it cost all in?

We were lucky. My former employer let us stay on the company group plan and pay the full premium. It's about $1300 a month. Our total health care costs are about $25k a year for premiums and out of pocket expenses combined. A good portion is deductible because it's more than 7.5 percent of our gross income. It's our single biggest expense but very doable.

That is eye-opening.

It sure is. And we're both healthy. But it's also worth noting that it can't get much higher than this either. We hit the deductibles every year, and that's that. And for further context, we draw down about $200k a year to live on, and our federal taxes most years are zero. So $25k is, again, pretty doable.

Could you provide some thoughts on the 200K$ expense during retirement? What do you spend it on? I estimated around $180K$ per year but I was told this estimate may be too low.

NP here but I've tried to think about some of this but haven't done a detailed budget. We currently put at least $10k/month on credit cards for a range of expenses - home related, travel, etc. So assuming that keeps up that's $120k to start with. RE taxes are $20k (2 houses). We spend about $8000/year on a cleaning service. We spend a lot on landscaping for both houses too - probably $10k/year with no special projects. We currently spend a ton on insurance and deductibles ($25k+/year) but I assume Medicare will actually be less expensive. Car maintenance and insurance for 2 cars. Home repairs always seem to come up, or home improvement projects - I'd guess they'd average at least $10-20k/year.

Maybe if we sell one of the houses and move to a condo some of the maintenance is lower but then it gets replaced with a condo fee. Or we could do our own cleaning and landscaping, but the reality is it wouldn't be feasible for that long.

I'm sure I'm missing big categories. Anyway I am assuming we will need $200-250k after tax (which is less than we have today).

NP. This is my thought as well that we'll need somewhere between $200-$250K to live decently. This also doesn't include giving some sort of gifts/big vacation with kids, new cars etc. that would be required. Not sure what I'm missing and so would love to hear from others.

I'm also not sure if we have enough for that kind of income and also my fear is that the market is high now but what if it falls? Do you have to withdraw significantly less and will we have to live on significantly less money (I know people say to keep 3 years worth of costs in cash to mitigate that concern but not sure if that works in what % of downturns).

Good discussion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Late 50s and retired for a half dozen years or so. Net worth as of today: $7.3 million. $4.1 million in retirement accounts, $1.4 million in brokerage/savings accounts, $1.8 million in home equity. Kids have all graduated college already.

What do you do for healthcare and how much does it cost all in?

We were lucky. My former employer let us stay on the company group plan and pay the full premium. It's about $1300 a month. Our total health care costs are about $25k a year for premiums and out of pocket expenses combined. A good portion is deductible because it's more than 7.5 percent of our gross income. It's our single biggest expense but very doable.

That is eye-opening.

It sure is. And we're both healthy. But it's also worth noting that it can't get much higher than this either. We hit the deductibles every year, and that's that. And for further context, we draw down about $200k a year to live on, and our federal taxes most years are zero. So $25k is, again, pretty doable.

Could you provide some thoughts on the 200K$ expense during retirement? What do you spend it on? I estimated around $180K$ per year but I was told this estimate may be too low.

NP here but I've tried to think about some of this but haven't done a detailed budget. We currently put at least $10k/month on credit cards for a range of expenses - home related, travel, etc. So assuming that keeps up that's $120k to start with. RE taxes are $20k (2 houses). We spend about $8000/year on a cleaning service. We spend a lot on landscaping for both houses too - probably $10k/year with no special projects. We currently spend a ton on insurance and deductibles ($25k+/year) but I assume Medicare will actually be less expensive. Car maintenance and insurance for 2 cars. Home repairs always seem to come up, or home improvement projects - I'd guess they'd average at least $10-20k/year.

Maybe if we sell one of the houses and move to a condo some of the maintenance is lower but then it gets replaced with a condo fee. Or we could do our own cleaning and landscaping, but the reality is it wouldn't be feasible for that long.

I'm sure I'm missing big categories. Anyway I am assuming we will need $200-250k after tax (which is less than we have today).

NP. This is my thought as well that we'll need somewhere between $200-$250K to live decently. This also doesn't include giving some sort of gifts/big vacation with kids, new cars etc. that would be required. Not sure what I'm missing and so would love to hear from others.

I'm also not sure if we have enough for that kind of income and also my fear is that the market is high now but what if it falls? Do you have to withdraw significantly less and will we have to live on significantly less money (I know people say to keep 3 years worth of costs in cash to mitigate that concern but not sure if that works in what % of downturns).

Good discussion.

DP here as well, and this is where we are. Our money doesn't yet spin off enough to not dip into principle to pay for the 200K that I think we need. And we are close to retirement, though I'm not close to medicare. In order to not have to sell anything, we do have more cash than we should, and if more was invested it could be making us more. But we can't afford to lose it at this point. It definitely feels like a catch 22.

[Anonymous]

Apologize if this is off topic but I was wondering what you think is a reasonable assumption to make about investment returns if you are within 10 years of retirement (assume 60% stocks) and after retirement. Also what is a reasonable assumption for average rate of inflation over the next 40 years

[Anonymous]

Typical ridiculous DCUM where it is a given that you won’t touch yourself principal so until your networth (minus two places of residence) doesn’t generate at least a $15k post tax return you won’t retire,

Where is the rule book that says that your principal of $10M plus has to go untouched.

Raise spoilt children and then given them huge inheritances so they won’t work as hard.

[Anonymous]

57 and 58. $1.8M NW. i didn’t count about $200k in 529 for kid who starts college next year. I am feeling sad it’s so low.

[Anonymous]

Anonymous wrote:57 and 58. $1.8M NW. i didn’t count about $200k in 529 for kid who starts college next year. I am feeling sad it’s so low.

That’s wack

[Anonymous]

Anonymous wrote:Apologize if this is off topic but I was wondering what you think is a reasonable assumption to make about investment returns if you are within 10 years of retirement (assume 60% stocks) and after retirement. Also what is a reasonable assumption for average rate of inflation over the next 40 years

This a stupid question dear

[Anonymous]

Anonymous wrote:

Anonymous wrote:Apologize if this is off topic but I was wondering what you think is a reasonable assumption to make about investment returns if you are within 10 years of retirement (assume 60% stocks) and after retirement. Also what is a reasonable assumption for average rate of inflation over the next 40 years

This a stupid question dear

It's not.
Nobody knows but reasonable conservative estimate would be 6% before retirement, 4% afterwards.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Apologize if this is off topic but I was wondering what you think is a reasonable assumption to make about investment returns if you are within 10 years of retirement (assume 60% stocks) and after retirement. Also what is a reasonable assumption for average rate of inflation over the next 40 years

This a stupid question dear

It's not.
Nobody knows but reasonable conservative estimate would be 6% before retirement, 4% afterwards.

I don’t know how conservative 6% is for a 60/40 portfolio. What are your estimates for stock and bonds returns?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Seriously starting to worry since you all have such high numbers. At 55 and 47, we have $220k income and $1.4M net worth that includes retirement, brokerage, home equity, and 529. Will have $100k pension (pretax). My greatest worry is elder care because the costs are astronomical.

PP, you have a $100,000 pension!! Relax, you have nothing to worry about.

But the entire thing can be easily consumed by elder care. I’m seeing it now with my parents.

Not for the first 20 years!

Sadly, a lot of people need care starting in their late 60s or early 70s.

Have these people not taken care of their health, or just had bad luck? Look at Biden -- he is 78 years old and not in need of elder care.

I'm guessing there's a lot of variance in this. PP mentions care in the late 60s-early 70s. Yet I know a guy who's the chairman of cardiology at a major east coast health system, still working at age 73 -- the same hours he was putting in at 53 and in his off time -- taking lots of hiking and rock climbing vacations. And then there's my parents' neighbor -- up at age 79 was still commuting 90 min one way into NYC for his engineering job, only forced to retire at age 79 because of the pandemic as public transit commuting wasn't advisable last March but his was an essential worker job that couldn't be done from home.

[Anonymous]

Oh. Well. DH in his early 50s. We just calculated our net worth at $400k. It's not that I thought that was "good" or enough to retire on, but it wasn't so long ago we had a negative net worth, so, you know.

Even if you are more or less a professional, if you get laid off periodically and drain your savings, you don't get to harness the power of compound interest on a 401k and so on.

Looks like the median net worth for an American family with a HOH age 45-54 is $168k. For 55-64, it's $213k.