How much do people have saved for retirement?

[Anonymous]

We max out our 401ks. Don’t have nearly as much as everyone here because we are not well off. With the climate crisis and the US going in the direction it’s going, maybe my retirement plant is I’ll flee to my home country or end it all on my own terms if I ever need long term care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:To all the high rollers I actually factored that in

Assumption I am making, house is paid off, kids/college done with. Those are your 2 biggest expenses

I struggle to imagine how typical living expenses are going to be over 5k a month. That leaves you 40k to live like a baller for 3 months a year or alternatively to bump up your living expenses per month. Also remember once you hit say 80 living expenses really start taking a nose dive and you won't be doing that baller stuff anymore either.

From an actual retired person: budget $10,000 a year on property tax and insurance (double that if you live in NOVA). Increase that significantly for flood and wind insurance if you live anywhere near the coast. Car insurance and taxes are another $3,000 (again, more than that if you live in NOVA). $12,000 for electricity/gas/phones/water/sewer/wifi/etc. Medical/dental insurance and copays are another $10,000 (more if you're not eligible for Medicare). Plus vet bills, boat insurance, house maintenance -- easily add another $5,000 (or more, if say, your HVAC unit conks out). Budget $5,000 for groceries, and another $5,000 if you want to eat or order out twice a week.

We're at $50,000, and there are entire categories of stuff we haven't addressed -- We do all of our own yard work, but you could easily add another $5,000 a year for that (or, in the alternative, condo/homeowner's association fees). Pool maintenance? House cleaning services? Are you ever going to buy a new car, improve your house, buy new clothes, buy a new phone/computer, buy gifts for your family, make charitable contributions, put $$ in a 529 for your grandchildren? What are you going to do with your time? How about greens fees/country club dues/boat slip fees, and, of course, the big ticket item, travel?

At 80, you're going to need to outsource more -- that yard maintenance becomes essential -- or go into a retirement/nursing home that is substantially more expensive. Heaven forbid you get dementia and need incredibly expensive memory care facilities.

Sure, it is possible to spend less than this. If you already spend less than this when you're working, then it could work great. However, do not fool yourself into thinking that you're going to drop your spending (not income, spending) dramatically in retirement and be happy. Why would I want to quit a job that I enjoyed to sit around in a house and think about how I'd really love to go play golf, or go out to dinner, or send a nice gift to my grandchild, but I can't afford to? Think carefully about how you were living during the COVID shut down, because that could be the rest of your life on a limited budget. But it would be even worse, because it would all be out there and available, but just not for you.

“Boat insurance” “Country club fees” Lol

[Anonymous]

Anonymous wrote:

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

Our HHI is over $400K a year. We are certainly not going to retire if we have to live on 25% of what we currently make. It depends on current income and current and expected lifestyle

Our HHI is the same as yours and we could comfortably live on 25% of this in retirement. We'll no longer be saving for college or retirement, we'll have no mortgage and we won't have kid expenses (which I swear are about 90 cents of every dollar we currently spend). I could live large on 25% of this!

Yeah I don't get it. Most of our costs involve:

Mortgage (will get paid off)
Saving for college
Kids school, activities, food
Ancillary work expenses (commuting, parking, work lunches)

Eliminate that and we spend like $50k. Seriously.

Health care if you are retiring before medicare eligibility. That is likely to be equivalent to our mortgage. You also probably will want to increase your budget for travel or other hobbies, since you won't be filling your time with work and parenting.

[Anonymous]

Pre-Covid we spent a lot more in retirement than we did before retirement. Travel alone added about $30k and we spend a lot more on regular leisure activities. I'm sure in total we are up $50k a year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most of the posts on this thread are junk. The starting question is how much money do you need? As one PP said if you need $120,000 a year you are in good shape.

But for the people that say you do not need more than a certain amount ----- it all depends. I have made near or over $1 million for a long time. I am 5-10 years from retirement. We do quite well. We save a lot; we spend a lot. I could decide to reduce the current lifestyle; I do not intend to. As a result I would like 50,000 a month in retirement.

$120K per year is not that "little", still need $3.5M invested to pull in that much safely.

Not if Social Security covers some of it.

+1

We will have abour $3mil, and pull $140K. Retiring before 60.

Obviously prior to 62/65, we will pull more from our retirement, but once we hit 62/65, we will get the max social security - about $60K/yr between my spouse and I.

[Anonymous]

43, single/divorced. $1.2M in 401K, Roth, IRA and personal brokerage. No mortgage and probably have about $850K in equity. My goal is to be financially independent by the time kids are done with college (when I am 57) and then do fun jobs that will pay for health insurance.

[Anonymous]

OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

[Anonymous]

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

Wow is that what you need? Seems quite high. We would need $15m by those standards. But by that point we will not have private school tuitions. We will just have healthcare and travel costs.

[Anonymous]

Anonymous wrote:Pre-Covid we spent a lot more in retirement than we did before retirement. Travel alone added about $30k and we spend a lot more on regular leisure activities. I'm sure in total we are up $50k a year.

This is very normal, but money of those who are planning for retirement don’t want to hear it.

[Anonymous]

Anonymous wrote:

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

Our HHI is over $400K a year. We are certainly not going to retire if we have to live on 25% of what we currently make. It depends on current income and current and expected lifestyle

Our HHI is the same as yours and we could comfortably live on 25% of this in retirement. We'll no longer be saving for college or retirement, we'll have no mortgage and we won't have kid expenses (which I swear are about 90 cents of every dollar we currently spend). I could live large on 25% of this!

Yeah I don't get it. Most of our costs involve:

Mortgage (will get paid off)
Saving for college
Kids school, activities, food
Ancillary work expenses (commuting, parking, work lunches)

Eliminate that and we spend like $50k. Seriously.

Does that include taxes and insurance on your “paid off” house? Those two alone were about $20,000 a year on our house in Fairfax County. Our property taxes are considerably less in our new location, but insurance is much more, so it’s still a considerable hit.

I also spent less $$ on incidentals when I was working. I didn’t have time. If you’ve been home all day, going out for dinner is more appealing, not less. Even just doing stuff like working in the yard adds up — buying plants, grass seed, fertilizer.

Travel is a whole other category.

Don’t underestimate how much time you have to fill when you don’t have kids or a job.

YMMV. We’re retired, and did the “stay home and entertain ourselves around the house” thing last year because of covid, and it gets OLD.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Pre-Covid we spent a lot more in retirement than we did before retirement. Travel alone added about $30k and we spend a lot more on regular leisure activities. I'm sure in total we are up $50k a year.

This is very normal, but money of those who are planning for retirement don’t want to hear it.

*many* (appropriate typo, tho)

[Anonymous]

Anonymous wrote:Most of the posts on this thread are junk. The starting question is how much money do you need? As one PP said if you need $120,000 a year you are in good shape.

But for the people that say you do not need more than a certain amount ----- it all depends. I have made near or over $1 million for a long time. I am 5-10 years from retirement. We do quite well. We save a lot; we spend a lot. I could decide to reduce the current lifestyle; I do not intend to. As a result I would like 50,000 a month in retirement.

PP if you return, a question for you: how much wealth do you think you need to save in order to have that kind of income and what age do you plan to retire on that number? I anticipate needing a higher income than the $100K numbers and so curious what is your multiple.

[Anonymous]

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

not OP but we will never be able to save that much money for retirement. I guess we will be destitute.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most of the posts on this thread are junk. The starting question is how much money do you need? As one PP said if you need $120,000 a year you are in good shape.

But for the people that say you do not need more than a certain amount ----- it all depends. I have made near or over $1 million for a long time. I am 5-10 years from retirement. We do quite well. We save a lot; we spend a lot. I could decide to reduce the current lifestyle; I do not intend to. As a result I would like 50,000 a month in retirement.

PP if you return, a question for you: how much wealth do you think you need to save in order to have that kind of income and what age do you plan to retire on that number? I anticipate needing a higher income than the $100K numbers and so curious what is your multiple.

4% rule is still valid if used right. So $15 million somewhere around 60 (58-62ish). To see how to apply it you should look at Mr. Money Moustache site. Good financial info there just ignore all of the spending nothing for tp threads. Some basics: just because you retire does not mean that you do nothing. It is likely I can do some consulting for some money part time and that defrays cost; in years with investment loss, take less; While 50k a month is wanted now, plan on 45k or 40k a month later in life so 50k through 78 say and then slowing move to 45k as you are probably doing less.

[Anonymous]

Seems like you are in a good spot… you’ll have over a couple million by retirement and a house almost paid off. Will you pay that off before retirement or downsize to eliminate a house payment? I don’t see why you can’t spend some money too. I guess it just depends what you are trying to do with your nest egg. If it’s truly for retirement, you’re good. If it’s for leaving your kids a large inheritance we’ll then you need to save a lot more.