Why are people obsessed with putting $$ in retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:DCUM is another bubble on this topic

The average person is completely fine with a nest egg of 500k which allows for over 2k a month before social security/pension etc

Most people on DCUM flip out if there nest egg is less then 5 million which is ridiculously high that's over 20,000 a month

DC is a higher cost of living area general rule of thumb I tell people

If you are 50 or older shoot for 1 million by retirement 30-50 shoot for 1.5 million and under 30 shoot for 2 million.

If you save 1,000 bucks a month you will easily have that amount. If you can't save 12,000 a year move or get a better job

The average person doesn't expect to eat a nice dinner out once a week and travel multiple times a year, either.

This really sums it up. There are things I want to do when I retire, many of which cost money. Some of them I do now (eat out, sometimes at nice places, sometimes at fast casual places, sometimes at really expensive places), travel, ski, drink good booze; some of them are waiting for retirement (month-long trips to Asia and/or Australia, perfecting the perfect smoked brisket, season tickets to the Nationals, subscription to several local theaters). If the sum total of your goals in retirement is to hike, grill burgers and chat, that's great for you (and I plan on doing those things too). But I want a little bit more out of life, especially in the early retirement years, and I'm willing to save up to do those things.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The other thing about saving a good amount is that you don’t get used to spending a ton so it’s easier to retire and keep the same lifestyle if you ever got used to spending at the limit of your salary.

Great point! We're on a pretty strict budget. But when I think of all the things we like to do, they don't cost all that much money: Taking the kids on a hike around Great Falls or the Shenandoah, going to see a movie, inviting friends over for a BBQ in our backyard, etc. We're not eating out at Pineapple & Pearls twice a month, going skiing in Aspen or jetting off to Europe for summer vacation. I can't see our tastes changing that dramatically in retirement. Our home will be paid off within 20 years. So outside of health concerns, I don't see why we'd need $3m+ to live a comfortable life.

Are you saying that, if you have the funds, you wouldn't go skiing out west, or go to Europe/Asia/Africa on vacation? If so, that's great - but why not?

[Anonymous]

Obsessed? Isn’t that average 401k balance across all ages something like 104k with the 55-65 age group up to like 160k? We’re not exactly a nation of savers. We’re not China, Japan or Korea where households on average save about 40% of income.

[Anonymous]

If you start putting money away with every paycheck when you're young, you will be used to having that money taken out of your paycheck just like you are used to having money taken out for taxes. There is no obsessing about saving for a retirement you just do it. Over the years that money adds up. You also make your house payment every month - at first it seems that the balance barely even goes down. But over time those payments add up until you eventually pay your mortgage off and own your home free and clear.

You may not have 5 million in your bank account when it comes time to retire but you will be glad that you bothered to save something. 104K/160K is not a small chunk of change. The ones who will really be hurting are the ones who bothered to save nothing at all.

[Anonymous]

Anonymous wrote:If you start putting money away with every paycheck when you're young, you will be used to having that money taken out of your paycheck just like you are used to having money taken out for taxes. There is no obsessing about saving for a retirement you just do it. Over the years that money adds up. You also make your house payment every month - at first it seems that the balance barely even goes down. But over time those payments add up until you eventually pay your mortgage off and own your home free and clear.

You may not have 5 million in your bank account when it comes time to retire but you will be glad that you bothered to save something. 104K/160K is not a small chunk of change. The ones who will really be hurting are the ones who bothered to save nothing at all.

For retirement, $160k is extraordinarily small. Using the 4% rule (which, in today's low interest rate environment, likely is too aggressive), that yields $6400 per year, or less that $535 per month.

[Anonymous]

I am visiting my Father In Law right now. My FIL saved. He is living in a gulf front condo in FL. My father, who did not save enough, and blew it all, is living in a trailer.

I prefer ocean front to trailers. So I save (1.462 mil @ 54)

[Anonymous]

most of us will live close to 30 years after we retire. do you recall what happened in 1988? that was 30 years ago. Reagan was the president and kevin durant was born that year. do you have enough money saved to support yourself THAT long?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you start putting money away with every paycheck when you're young, you will be used to having that money taken out of your paycheck just like you are used to having money taken out for taxes. There is no obsessing about saving for a retirement you just do it. Over the years that money adds up. You also make your house payment every month - at first it seems that the balance barely even goes down. But over time those payments add up until you eventually pay your mortgage off and own your home free and clear.

You may not have 5 million in your bank account when it comes time to retire but you will be glad that you bothered to save something. 104K/160K is not a small chunk of change. The ones who will really be hurting are the ones who bothered to save nothing at all.

For retirement, $160k is extraordinarily small. Using the 4% rule (which, in today's low interest rate environment, likely is too aggressive), that yields $6400 per year, or less that $535 per month.

Plus social security.

[Anonymous]

I'm glad I put a lot in my 401k in my early 30's as it allowed me to purchase a home in my mid 30's. I needed a large amount of assets to qualify for a mortgage and my 401k was the only asset worth anything in my possession.

[Anonymous]

The average person doesn't expect to eat a nice dinner out once a week and travel multiple times a year, either.


This really sums it up. There are things I want to do when I retire, many of which cost money. Some of them I do now (eat out, sometimes at nice places, sometimes at fast casual places, sometimes at really expensive places), travel, ski, drink good booze; some of them are waiting for retirement (month-long trips to Asia and/or Australia, perfecting the perfect smoked brisket, season tickets to the Nationals, subscription to several local theaters). If the sum total of your goals in retirement is to hike, grill burgers and chat, that's great for you (and I plan on doing those things too). But I want a little bit more out of life, especially in the early retirement years, and I'm willing to save up to do those things.

My parents are both retired and travel to Europe/Asia/Africa at least once a year, plus own a second home in Florida. They eat at nice places, go to plays, etc. They don't have 3 million saved - more like a million. They own both their first and second homes outright. I'd say you need more than 500K for the lifestyle you are seeking, but not 3 million.

[Anonymous]

Anonymous wrote:I'm glad I put a lot in my 401k in my early 30's as it allowed me to purchase a home in my mid 30's. I needed a large amount of assets to qualify for a mortgage and my 401k was the only asset worth anything in my possession.

Didn't realize 401k assets count for a mortgage - since they're tied up until age 65? I've done something similar -- starting maxing out the 401k the minute I got my real job at 25; now early-mid 30s, I'm starting think about buying. Seems like my friends did it the other way -- house was the first priority.

[Anonymous]

Anonymous wrote:

The average person doesn't expect to eat a nice dinner out once a week and travel multiple times a year, either.


This really sums it up. There are things I want to do when I retire, many of which cost money. Some of them I do now (eat out, sometimes at nice places, sometimes at fast casual places, sometimes at really expensive places), travel, ski, drink good booze; some of them are waiting for retirement (month-long trips to Asia and/or Australia, perfecting the perfect smoked brisket, season tickets to the Nationals, subscription to several local theaters). If the sum total of your goals in retirement is to hike, grill burgers and chat, that's great for you (and I plan on doing those things too). But I want a little bit more out of life, especially in the early retirement years, and I'm willing to save up to do those things.

My parents are both retired and travel to Europe/Asia/Africa at least once a year, plus own a second home in Florida. They eat at nice places, go to plays, etc. They don't have 3 million saved - more like a million. They own both their first and second homes outright. I'd say you need more than 500K for the lifestyle you are seeking, but not 3 million.

This is NOW. People could also pay for college out of pocket at one time and now that is nearly impossible. Costs rise.

[Anonymous]

Anonymous wrote:

The average person doesn't expect to eat a nice dinner out once a week and travel multiple times a year, either.


This really sums it up. There are things I want to do when I retire, many of which cost money. Some of them I do now (eat out, sometimes at nice places, sometimes at fast casual places, sometimes at really expensive places), travel, ski, drink good booze; some of them are waiting for retirement (month-long trips to Asia and/or Australia, perfecting the perfect smoked brisket, season tickets to the Nationals, subscription to several local theaters). If the sum total of your goals in retirement is to hike, grill burgers and chat, that's great for you (and I plan on doing those things too). But I want a little bit more out of life, especially in the early retirement years, and I'm willing to save up to do those things.

My parents are both retired and travel to Europe/Asia/Africa at least once a year, plus own a second home in Florida. They eat at nice places, go to plays, etc. They don't have 3 million saved - more like a million. They own both their first and second homes outright. I'd say you need more than 500K for the lifestyle you are seeking, but not 3 million.

Do your parents have retirement pensions? If so, that changes things.

They are getting social security too. That may or may not last.

And, are they running down the 401K? How much are they spending? If they are taking out 100K/yr, they will run out in 15 years or so. If it only took one million, I could retire today. But, I figure I need 3 mil. Then, I can live off the income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

The average person doesn't expect to eat a nice dinner out once a week and travel multiple times a year, either.


This really sums it up. There are things I want to do when I retire, many of which cost money. Some of them I do now (eat out, sometimes at nice places, sometimes at fast casual places, sometimes at really expensive places), travel, ski, drink good booze; some of them are waiting for retirement (month-long trips to Asia and/or Australia, perfecting the perfect smoked brisket, season tickets to the Nationals, subscription to several local theaters). If the sum total of your goals in retirement is to hike, grill burgers and chat, that's great for you (and I plan on doing those things too). But I want a little bit more out of life, especially in the early retirement years, and I'm willing to save up to do those things.

My parents are both retired and travel to Europe/Asia/Africa at least once a year, plus own a second home in Florida. They eat at nice places, go to plays, etc. They don't have 3 million saved - more like a million. They own both their first and second homes outright. I'd say you need more than 500K for the lifestyle you are seeking, but not 3 million.

Do your parents have retirement pensions? If so, that changes things.

They are getting social security too. That may or may not last.

And, are they running down the 401K? How much are they spending? If they are taking out 100K/yr, they will run out in 15 years or so. If it only took one million, I could retire today. But, I figure I need 3 mil. Then, I can live off the income.

Just for you, or for you and your spouse?

[Anonymous]

Anonymous wrote:I am visiting my Father In Law right now. My FIL saved. He is living in a gulf front condo in FL. My father, who did not save enough, and blew it all, is living in a trailer.

I prefer ocean front to trailers. So I save (1.462 mil @ 54)

You meant $1.462.38?