How much do people have saved for retirement?

[Anonymous]

Anonymous wrote:So much depends on two things: if your mortgage is paid off or not, and the lifestyle you want to live when you're retired. It's obviously a lot more manageable if you're only paying property taxes and homeowner's insurance. And then lifestyle: we like to hike, ride our bikes, see an occasional movie. Maybe eat out or go for a drink a couple times a month. I don't need millions of dollars to do this. Yes, my health care costs will likely go up. But this idea that you'll need to pay for assisted health care for 10-20 years isn't the reality. The vast majority of people, when they get so ill they need constant medical attention, do not live decades with said condition.

Yes...people act like they will be living forever in a nursing home. Average lifespan in a nursing home is 14 months.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have lots of friends that have retired. I am getting close. The middle class friends have seen their expenses drop assuming house paid for. Interestingly my UMC friends (sample of 3) all have had expenses stay the same or even increase -- also with house paid off. Why? They say spending more on travel than planned (1) Regularly visiting kids who do not live in this area, and (2) taking more vacation type trips. Also they say they spend a lot on kids when visiting. Not for everyone but that is their experience.

Bingo -- this is what I was thinking.
With kids in school we generally take 1 major vacation per year (summer), and sometimes some smaller trip during winter break.

If we were completely free, it would be awesome to take a trips 4-6 times per year. And since you don't need to "conserve vacation days" from work, you could actually do longer trips, where you could explore more. So I would think that travel expenses could definitely be higher than current.

+2. I don't expect expenses to decrease at all for several reasons: 1. health insurance costs until medicare kicks in 2. more "entertainment" costs such as traveling/hobbies 3. vacation as a family including kids/grandkids when they have families of their own. I also think that we may spend more than we currently do. Glad someone else spoke up.

Are you expecting to pay for all your adult kids and your grandkids? I think I'd expect my adult kids to pay their fair share if they're employed and have their own families.

Yes...I do pay for my adult kids and grandkids. My kids don't have the disposable income to travel the way we travel. What good is a pile of money of you can't share these wonderful experiences with the people you love most?

The pandemic was a blessing. Everyone working remote and school remote we did some travel of a lifetime as a family. Our kids could have never afforded the flights, nor the logistics of a trip with nobody to help with the kids during the day without out money and time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have lots of friends that have retired. I am getting close. The middle class friends have seen their expenses drop assuming house paid for. Interestingly my UMC friends (sample of 3) all have had expenses stay the same or even increase -- also with house paid off. Why? They say spending more on travel than planned (1) Regularly visiting kids who do not live in this area, and (2) taking more vacation type trips. Also they say they spend a lot on kids when visiting. Not for everyone but that is their experience.

Bingo -- this is what I was thinking.
With kids in school we generally take 1 major vacation per year (summer), and sometimes some smaller trip during winter break.

If we were completely free, it would be awesome to take a trips 4-6 times per year. And since you don't need to "conserve vacation days" from work, you could actually do longer trips, where you could explore more. So I would think that travel expenses could definitely be higher than current.

+2. I don't expect expenses to decrease at all for several reasons: 1. health insurance costs until medicare kicks in 2. more "entertainment" costs such as traveling/hobbies 3. vacation as a family including kids/grandkids when they have families of their own. I also think that we may spend more than we currently do. Glad someone else spoke up.

Are you expecting to pay for all your adult kids and your grandkids? I think I'd expect my adult kids to pay their fair share if they're employed and have their own families.

Yes...I do pay for my adult kids and grandkids. My kids don't have the disposable income to travel the way we travel. What good is a pile of money of you can't share these wonderful experiences with the people you love most?

The pandemic was a blessing. Everyone working remote and school remote we did some travel of a lifetime as a family. Our kids could have never afforded the flights, nor the logistics of a trip with nobody to help with the kids during the day without out money and time.

so you all figured a pandamic would be the ideal time to do this?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:PP here. I stand corrected. Taxes in Fairfax ARE that high, and start getting there real quick even without a mansion. Another reason not to live there, I guess.

True. I have a borderline teardown worth about $900K and our taxes and insurance run $15K a year.

Oof. A retired person in DC would be paying something like 3K/year on that!

We've got about 1M at 35. We're only going to save up to our matches from here on out. Really no need more more savings (other than college). We spend about 80k/year after-tax these days, but that includes 30K in mortgage payments (not including property tax+insurance). Current employers let us retain health care if we leave at age 50.

Do you mind telling us which employer allow you to stay on their health plan?

Not OP, but many academic institutions have either 50 or 55 as the age you can first retire. (The 50 plans have mostly been phased out, but may exist in a grandfathered way).

Georgetown: https://benefits.georgetown.edu/preretiree/#c_dcbdc93e1681
American U: https://www.american.edu/hr/benefits/retirement/bep.cfm

Both are 55; but I think some people who were hired long ago are eligible at 50.

[Anonymous]

Anonymous wrote:We are 40 and have $800k. It sounds like we should have more.

It usually doubles every 7-10 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So much depends on two things: if your mortgage is paid off or not, and the lifestyle you want to live when you're retired. It's obviously a lot more manageable if you're only paying property taxes and homeowner's insurance. And then lifestyle: we like to hike, ride our bikes, see an occasional movie. Maybe eat out or go for a drink a couple times a month. I don't need millions of dollars to do this. Yes, my health care costs will likely go up. But this idea that you'll need to pay for assisted health care for 10-20 years isn't the reality. The vast majority of people, when they get so ill they need constant medical attention, do not live decades with said condition.

Yes...people act like they will be living forever in a nursing home. Average lifespan in a nursing home is 14 months.

What are you planning for? If you are just planning for the most likely thing -- 51% chance then you are fine. And maybe that is all you end up with so you have no choice. I want my chances just a bit higher. So yes you plan for assisted living and not just 14 months because that is the average. If you overplan you can leave it to your kids. Every scenario cannot be covered but if you have that chance you should cover 85-90% of possible outcomes.

[Anonymous]

Anonymous wrote:A law firm partner who insists they need millions and millions of dollars in retirement so they can fund . . . Disney cruises.

I’ve heard it all.

Not PP but I do not think that was the point. Point was he/she wants a lot of money for travel in retirement. People were saying that was dumb and PP is just pointing out that he/she does it now and wants to do it then. Pretty valid point. I agree that expenses for two of my friends that retired did not go down and in fact went up for both. Neither had a mortgage for the 15 or so years before retirement. But they were going out to eat more at quite nice places and travelling a lot more. My thought is that maybe you get a reduction in spending but you need to look really hard at it before you base your retirement on it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A law firm partner who insists they need millions and millions of dollars in retirement so they can fund . . . Disney cruises.

I’ve heard it all.

Not PP but I do not think that was the point. Point was he/she wants a lot of money for travel in retirement. People were saying that was dumb and PP is just pointing out that he/she does it now and wants to do it then. Pretty valid point. I agree that expenses for two of my friends that retired did not go down and in fact went up for both. Neither had a mortgage for the 15 or so years before retirement. But they were going out to eat more at quite nice places and travelling a lot more. My thought is that maybe you get a reduction in spending but you need to look really hard at it before you base your retirement on it.

As an actual retired person, I can vouch for expecting a reduction in spending in some areas, but a commensurate increase in spending in other areas.

Everyone has a different lifestyle pre-retirement, but I would suggest that you shouldn’t anticipate a complete sea change in your level of expenditures once you’re retired. I know the temptation to try to make the numbers work — we were thinking about retiring young for a while, and, looking back, my very first estimates regarding what we would spend in retirement were way off. Right as we were about to pull the trigger, the last recession hit, so we decided to work for a while longer. We’re so glad we did. Those last ten years made a huge difference in how comfortable our retirement is. It’s not all or nothing — we started pulling back professionally in the last five years. We only worked part time, but we were able to cover our living expenses and let our savings continue to grow. It’s also good to not jump into the retirement thing cold turkey. By going part time, we realized that we really had no problem at all leaving our jobs behind and got to the point where the additional income wasn’t worth it anymore.

[Anonymous]

Anonymous wrote:I’d rather retire at 55 and live a moderate lifestyle esp regarding travel than work until 65 so that I can do lavish travel.

Different strokes and all that. I am 56 and have zero interest in retiring now and living more modestly, as opposed to my plan to work until 60. The next four years are high earning ones, and I do want to be able to spend a lot on travel once I have free time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’d rather retire at 55 and live a moderate lifestyle esp regarding travel than work until 65 so that I can do lavish travel.

I am of the same mindset. I had an uncle who was a high-powered executive and would keep telling my aunt and cousins that it would all be worth it when he would retire at 60. He died at his desk of a heart attack at 58.

My husband only worked because he had to, and retired at 58 once it was financially feasible. I have no concrete plans to retire, because I like my work.

[Anonymous]

Anonymous wrote:We are 40 and have $800k. It sounds like we should have more.

Depends on your burn rate and how soon you plan to retire.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have lots of friends that have retired. I am getting close. The middle class friends have seen their expenses drop assuming house paid for. Interestingly my UMC friends (sample of 3) all have had expenses stay the same or even increase -- also with house paid off. Why? They say spending more on travel than planned (1) Regularly visiting kids who do not live in this area, and (2) taking more vacation type trips. Also they say they spend a lot on kids when visiting. Not for everyone but that is their experience.

Bingo -- this is what I was thinking.
With kids in school we generally take 1 major vacation per year (summer), and sometimes some smaller trip during winter break.

If we were completely free, it would be awesome to take a trips 4-6 times per year. And since you don't need to "conserve vacation days" from work, you could actually do longer trips, where you could explore more. So I would think that travel expenses could definitely be higher than current.

+2. I don't expect expenses to decrease at all for several reasons: 1. health insurance costs until medicare kicks in 2. more "entertainment" costs such as traveling/hobbies 3. vacation as a family including kids/grandkids when they have families of their own. I also think that we may spend more than we currently do. Glad someone else spoke up.

Are you expecting to pay for all your adult kids and your grandkids? I think I'd expect my adult kids to pay their fair share if they're employed and have their own families.

Yes...I do pay for my adult kids and grandkids. My kids don't have the disposable income to travel the way we travel. What good is a pile of money of you can't share these wonderful experiences with the people you love most?

The pandemic was a blessing. Everyone working remote and school remote we did some travel of a lifetime as a family. Our kids could have never afforded the flights, nor the logistics of a trip with nobody to help with the kids during the day without out money and time.

My kids are lazy. I have no intention of paying for them and their families to vacation (!), with or without us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have lots of friends that have retired. I am getting close. The middle class friends have seen their expenses drop assuming house paid for. Interestingly my UMC friends (sample of 3) all have had expenses stay the same or even increase -- also with house paid off. Why? They say spending more on travel than planned (1) Regularly visiting kids who do not live in this area, and (2) taking more vacation type trips. Also they say they spend a lot on kids when visiting. Not for everyone but that is their experience.

Bingo -- this is what I was thinking.
With kids in school we generally take 1 major vacation per year (summer), and sometimes some smaller trip during winter break.

If we were completely free, it would be awesome to take a trips 4-6 times per year. And since you don't need to "conserve vacation days" from work, you could actually do longer trips, where you could explore more. So I would think that travel expenses could definitely be higher than current.

+2. I don't expect expenses to decrease at all for several reasons: 1. health insurance costs until medicare kicks in 2. more "entertainment" costs such as traveling/hobbies 3. vacation as a family including kids/grandkids when they have families of their own. I also think that we may spend more than we currently do. Glad someone else spoke up.

Are you expecting to pay for all your adult kids and your grandkids? I think I'd expect my adult kids to pay their fair share if they're employed and have their own families.

Yes...I do pay for my adult kids and grandkids. My kids don't have the disposable income to travel the way we travel. What good is a pile of money of you can't share these wonderful experiences with the people you love most?

The pandemic was a blessing. Everyone working remote and school remote we did some travel of a lifetime as a family. Our kids could have never afforded the flights, nor the logistics of a trip with nobody to help with the kids during the day without out money and time.

My kids are lazy. I have no intention of paying for them and their families to vacation (!), with or without us.

Yeah, we're not desperate enough to pay the kids to spend time with us either... we raised them to pay their own way as responsible adults.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are 40 and have $800k. It sounds like we should have more.

Depends on your burn rate and how soon you plan to retire.

This. How much do you spend per month now, and how much if that will be gone in retirement? (For us, we will not have a mortgage or be saving for retirement or college once we are retired. On those things things alone we currently “spend” (or put aside) $150k/year.

[Anonymous]

We are 49 (me) and 50 (DH). DH plans to retire at 58. I'm thinking at 59 for myself.

We make $225k but save @ $80k/yr for retirement and co!lege. So that leaves about $145k before taxes. We're looking to replace most of that in retirement. Our expenses with two kids are $80k/yr.

We will have $100k in pensions (no state tax taken) and probably @ $25k/yr in rental income (currently $22k). My DH can work PT at his same school for 80% of his final pay while still collecting his pension. And we will also both get SS (anticipating starting it when we're 65 or 67). We will get health insurance thru our pensions. So we might have more money in retirement than now.

We also currently have @$630k in our retirement accounts (not including pension). We are maxing out our savings each year and hope to have close to $1M when we both retire. We hope to not have to dip into this for a while and instead just live on the pensions, etc mentioned above. We also have $1.3M in equity but we don't want to sell and leave our city (hope to leave it to our kids).