Target retirement income

[Anonymous]

Anonymous wrote:At what age do you plan to retire, and what level of income in TODAY’s dollars are you targeting? Our goal is age 62 and $200K in today’s dollars with real purchasing power maintained over the length of retirement.

Before someone asks or comments, I know that desired income is a function of expected expenses, but I would like to get a sense of what people around here are targeting without all the personal details and talk about net worth. I know it is all connected, but let’s just keep it to age and income.

Is this 200k pretax?

[Anonymous]

How much does medical really cost in retirement? Everything else is easy to figure out.

[Anonymous]

Anonymous wrote:How much does medical really cost in retirement? Everything else is easy to figure out.

I think the answer is it really depends. I know of couples who pay $20K per year for an ACA plan.

For folks with coverage from an former employer they have a huge leg up.

[Anonymous]

Anonymous wrote:How much does medical really cost in retirement? Everything else is easy to figure out.

Fidelity calculates an average total estimate each year for retirees. For a couple retiring in 2022 at 65, the total average health care costs are estimated at 315k. So a lot of people just follow that guidance and keep the estimate in an account that they don't touch or consider when calculating their withdrawal rate.

[Anonymous]

Plan to retire at 65. Take 25 years distribution of 401k plus SS and pension. Annual income= $900k in future dollar or $500k in current dollar. This doesn't include other assets such as RE properties and other liquids.
We can use federal health insurance after retirement.

[Anonymous]

Wow, what are folks expecting to spend all that money on? We spend around $100K a year now (including mortgage payments and daycare, two big expenses we won't have in retirement) and are planning on $75K a year in retirement.

[Anonymous]

Planning to retire at 65-66ish (in the next 5 years). Will have c. $350k annually once we take SS at 70. Will likely do a few consulting projects between 65 and 70 to supplement income until then.

[Anonymous]

Anonymous wrote:Husband and I are 53 and 50. We make about $250k combined. A few years ago it was more like $150k.

We have about 1.7m in savings, and about 600k in equity on a $1m house.

Our goal is 3.5m, with the house paid off and the two kids done with college. (We have separate 529s for that). That gives us about $125k a year.

Approximately early 60s retirement. The wildcard for us is no healthcare (neither of us is fed) so we may not be able to retire u til 65 depending on the cost of private care and our health in 10 years.

It boggles my mind how people save so much, afford such an expensive home, and pay off two kids’ college expenses on a $150k HHI. The math doesn’t work for me unless you are literally eating Ramen and tuna fish every night, take no vacations or have a lot of help from your parents.

[Anonymous]

Anonymous wrote:Wow, what are folks expecting to spend all that money on? We spend around $100K a year now (including mortgage payments and daycare, two big expenses we won't have in retirement) and are planning on $75K a year in retirement.

Good luck with that.

[Anonymous]

Anonymous wrote:Wow, what are folks expecting to spend all that money on? We spend around $100K a year now (including mortgage payments and daycare, two big expenses we won't have in retirement) and are planning on $75K a year in retirement.

Probably travel a lot, buy stuff for children, grandchildren etc

[Anonymous]

Our calculators put us around $150K/year in a combination of pensions and SS, not counting required withdrawals (though we are admittedly behind on savings because I have the luxury of a fin reg pension). I'll carry Fed health insurance for us. By then we will be done paying for college and should have a paid-off house, so it should be pretty comfortable. I hope we are healthy enough to travel and really enjoy retirement.

[Anonymous]

How are people figuring out how much they will need? We have 12-15 years until retirement and I am not sure where to start. Do you look at current expenses and subtract the ones you won’t have and add ones that you will (for example more on travel or health care)?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Husband and I are 53 and 50. We make about $250k combined. A few years ago it was more like $150k.

We have about 1.7m in savings, and about 600k in equity on a $1m house.

Our goal is 3.5m, with the house paid off and the two kids done with college. (We have separate 529s for that). That gives us about $125k a year.

Approximately early 60s retirement. The wildcard for us is no healthcare (neither of us is fed) so we may not be able to retire u til 65 depending on the cost of private care and our health in 10 years.

It boggles my mind how people save so much, afford such an expensive home, and pay off two kids’ college expenses on a $150k HHI. The math doesn’t work for me unless you are literally eating Ramen and tuna fish every night, take no vacations or have a lot of help from your parents.

Not PP but in a similar spot. The missing pieces are 1) we bought the house for $250k before prices exploded and then put another $200k into renovation. Many older couples around here that own a "$1m house" did not pay anything close to $1M for that. 2) Grandparents are paying for one year of college and both kids (one in college, one a HS senior) picked colleges that cost us <$30k. 3) the base of our retirement fund is mostly that DH saved like crazy for the first 10 years of his working life. Compound interest is amazing.

[Anonymous]

Anonymous wrote:How are people figuring out how much they will need? We have 12-15 years until retirement and I am not sure where to start. Do you look at current expenses and subtract the ones you won’t have and add ones that you will (for example more on travel or health care)?

This is what I do. I regularly track our expenses and estimate that we won't have a mortgage in retirement but from some online calculators, it seems reasonable to expect health expenses to offset that. No more kid expenses but more entertainment/travel for us. I feel best assuming we'll need 100% of current income (after retirement savings since we won't be doing that anymore).

[Anonymous]

Anonymous wrote:

Anonymous wrote:How much does medical really cost in retirement? Everything else is easy to figure out.

I think the answer is it really depends. I know of couples who pay $20K per year for an ACA plan.

For folks with coverage from an former employer they have a huge leg up.

It depends on where you live.

I've looked into both MD and VA, and the ACA plans are much more expensive in VA than MD (and DC, I think). The tax savings living in VA would basically be wiped out by the increase in healthcare insurance costs (plus car tax). So, we might just stay put in MD until we both can get medicare.

I have private insurance now in MD, and we pay $1330 for family of four, high deductible plan -- oldest person is 59. The premiums get more expensive as you get older.