Target retirement income

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Y’all are nuts. Who needs 200k in retirement?

Admittedly planning on owning the house outright, and my work should cover our insurance if I stick around to retirement age. But we are only planning on spending 50k or so in todays dollars and already feel like that’s going to feel lavish. Where are these 200k+ numbers going? Genuine question, I’m trying to figure out if I’m missing something.

Everyone has different plans for retirement. We are expecting to spend about $250K/year after tax in early retirement. That includes budgeting $50K annually for travel, $20K for philanthropy, $35K to run our house even after it's paid (insurance, property taxes, utilities, cleaning service, landscaping, etc), $15K for our country club membership, $25K for financial advisory fees. Obviously, you can do things differently and spend a lot less money depending on your lifestyle.

What about the other $100K in the budget?

Kind of sad to spend more on the empty part of a giant house than on philanthropy. With $50K/yr travel, are you even at home(s) more than half the year?

We live in DC, and our house isn't giant - 2,000 square feet plus a finished basement. Property taxes are $12,000 a year, our utilities, cable, phone and internet are $7,500. Landscaping is $4,000. Cleaning is $6,000. Insurance is $4,000.

We'd like to travel comfortably in retirement, especially when we're older, and pay for our kids to join us. $50K means we would be away from our "giant" home maybe a month a year.

For philanthropy, this number is outside what we've already contributed to endowed funds and donor advised funds/foundations. To get $250,000 in income, we'd pay $125,000 in taxes with current rates so I'm pretty comfortable with our contributions to society.

Other big ticket items for us are insurance premiums and medical care - that's through my husband's current employer ($12K), a nice car and insurance ($8K), dining out and entertaining ($25K), groceries/house supplies, personal care ($20K). It all adds up! And yes, you can obviously live on way less, but the OP wanted to know projections in the area. I don't think our numbers are out of range for a HCOL comfortable retirement.

What's your net worth outside of primary residence?

[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.

At first I thought this was us! Except the ages are a little off. And our savings amount is more like $1.4M with a goal of $2M by retirement at 62. House and college are the same. But one of us is a fed, so we have the health insurance option and we have the pension, so we hope to approach $200K in 2023 dollars.

Yep, except for the fact that you have a 1.5 million difference in savings goals, one is retiring with a pension/health insurance and the other with neither, and a post retirement spending plan gap of 75k/year you guys could be twins! 🤣

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Y’all are nuts. Who needs 200k in retirement?

Admittedly planning on owning the house outright, and my work should cover our insurance if I stick around to retirement age. But we are only planning on spending 50k or so in todays dollars and already feel like that’s going to feel lavish. Where are these 200k+ numbers going? Genuine question, I’m trying to figure out if I’m missing something.

Everyone has different plans for retirement. We are expecting to spend about $250K/year after tax in early retirement. That includes budgeting $50K annually for travel, $20K for philanthropy, $35K to run our house even after it's paid (insurance, property taxes, utilities, cleaning service, landscaping, etc), $15K for our country club membership, $25K for financial advisory fees. Obviously, you can do things differently and spend a lot less money depending on your lifestyle.

What about the other $100K in the budget?

Kind of sad to spend more on the empty part of a giant house than on philanthropy. With $50K/yr travel, are you even at home(s) more than half the year?

We live in DC, and our house isn't giant - 2,000 square feet plus a finished basement. Property taxes are $12,000 a year, our utilities, cable, phone and internet are $7,500. Landscaping is $4,000. Cleaning is $6,000. Insurance is $4,000.

We'd like to travel comfortably in retirement, especially when we're older, and pay for our kids to join us. $50K means we would be away from our "giant" home maybe a month a year.

For philanthropy, this number is outside what we've already contributed to endowed funds and donor advised funds/foundations. To get $250,000 in income, we'd pay $125,000 in taxes with current rates so I'm pretty comfortable with our contributions to society.

Other big ticket items for us are insurance premiums and medical care - that's through my husband's current employer ($12K), a nice car and insurance ($8K), dining out and entertaining ($25K), groceries/house supplies, personal care ($20K). It all adds up! And yes, you can obviously live on way less, but the OP wanted to know projections in the area. I don't think our numbers are out of range for a HCOL comfortable retirement.

What's your net worth outside of primary residence?

About 10, not including property we currently own or will inherit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Y’all are nuts. Who needs 200k in retirement?

Admittedly planning on owning the house outright, and my work should cover our insurance if I stick around to retirement age. But we are only planning on spending 50k or so in todays dollars and already feel like that’s going to feel lavish. Where are these 200k+ numbers going? Genuine question, I’m trying to figure out if I’m missing something.

Everyone has different plans for retirement. We are expecting to spend about $250K/year after tax in early retirement. That includes budgeting $50K annually for travel, $20K for philanthropy, $35K to run our house even after it's paid (insurance, property taxes, utilities, cleaning service, landscaping, etc), $15K for our country club membership, $25K for financial advisory fees. Obviously, you can do things differently and spend a lot less money depending on your lifestyle.

What about the other $100K in the budget?

Kind of sad to spend more on the empty part of a giant house than on philanthropy. With $50K/yr travel, are you even at home(s) more than half the year?

We live in DC, and our house isn't giant - 2,000 square feet plus a finished basement. Property taxes are $12,000 a year, our utilities, cable, phone and internet are $7,500. Landscaping is $4,000. Cleaning is $6,000. Insurance is $4,000.

We'd like to travel comfortably in retirement, especially when we're older, and pay for our kids to join us. $50K means we would be away from our "giant" home maybe a month a year.

For philanthropy, this number is outside what we've already contributed to endowed funds and donor advised funds/foundations. To get $250,000 in income, we'd pay $125,000 in taxes with current rates so I'm pretty comfortable with our contributions to society.

Other big ticket items for us are insurance premiums and medical care - that's through my husband's current employer ($12K), a nice car and insurance ($8K), dining out and entertaining ($25K), groceries/house supplies, personal care ($20K). It all adds up! And yes, you can obviously live on way less, but the OP wanted to know projections in the area. I don't think our numbers are out of range for a HCOL comfortable retirement.

What's your net worth outside of primary residence?

About 10, not including property we currently own or will inherit.

Congratulations! How old are you guys? Kids out of the house? Already retired or soon? I posted earlier (58/52; $6.5M; 1 kid in the house; retire in 5 yrs. when all kids are done with college with $8M+). $10M would be ideal for us (and quite possible if market behaves), more so because it would be a worry-free life (whatever is left) but our fixed costs are not as high as yours seems to be, but we still expect to need $150K in retirement.

[Anonymous]

I’m the 53 and 50 year old poster from upthread. A few notes:

We could afford our house at $150k hhi when we bought it 15 years ago because it was $550k, now worth about 1M plus l. Also, dh was a great retirement saver in his 20s, and I was decent too, so ours has compounded well. We never got money from parents for a down payment or 529s.

It’s difficult to compare a pension vs non pension retirement so the PP who said we were similar, I get what they mean. We are non pension having retirement like most non DC people and have always know that and saved accordingly.

[Anonymous]

Also, I haven’t included social security which is an extra 3-4K a month, so that probably bumps up the annual retirement income past $150k.

Finally, no inheritance factored in, but we may also receive something there, for either/both sides.

[Anonymous]

We are also aiming for $250 k. About $160k of that will come from pensions. Hope to have about $2.5 million to provide an income stream of $100k for the rest.

We own two houses so taxes, bills, upkeep on both will take a lot. Then we also want to travel a lot in the early days. Aiming to retire at 55/57.

[Anonymous]

52/51 - From the DMV, have a $1.5M paid off house in NoVA, currently living on a 48 ft Leopard Catamaran sailing around the Caribbean for about 7-8 months of the year which can be expensive. Goal was to retire early and well with $400K in annual income. Retired at 47. Spouse works remotely (even from the catamaran with satellite data when not anchored, moored, or pier-side). Have about $500K in passive income from fairly safe investments, plus $90K pension, plus spouse salary. About $3M in Roths. Two kids are launched.

[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.

That’s because most of the posts on this thread are probably not completely truthful.

[Anonymous]

Another key strategy is to minimize your tax bill in retirement. 401K withdrawals/RMDs are taxed as ordinary income. Forget that. Capital gains and qualified dividends are taxed at much lower rates in most cases. Roths and Roth conversions mean tax free withdrawals. Oh and then there is the “Buy, Borrow, and Die” strategy where you don’t pay taxes on money used from taking equity loans. Govt doesn’t tax debt. When you die, cost basis of your investments reset assuming this out-of-control spending govt doesn’t change the law.

[Anonymous]

Anonymous wrote:Also, I haven’t included social security which is an extra 3-4K a month, so that probably bumps up the annual retirement income past $150k.

Finally, no inheritance factored in, but we may also receive something there, for either/both sides.

Other PP here (the ones with the pension). We were including SS, and the goal of $2M is something we set when we were about 40. We’re on track to do better than that. In part this is because knowing there is a pension coming is like having something like $2M in a no-risk investment. So we can choose to take a higher risk, higher return posture for our other investments. So yes, comparing people with/without pensions means trying to assess the value of the pension in terms of a 401(k).

[Anonymous]

57/35 - spouse retired when our 1st child was born. $50k/month.

[Anonymous]

I am estimating 200k of spending in today’s dollars. Our pensions will total over 200k (but will be taxed). We have 3.25 million invested now and we are 12-15 years from retirement.

[Anonymous]

Anonymous wrote:Y’all are nuts. Who needs 200k in retirement?

Admittedly planning on owning the house outright, and my work should cover our insurance if I stick around to retirement age. But we are only planning on spending 50k or so in todays dollars and already feel like that’s going to feel lavish. Where are these 200k+ numbers going? Genuine question, I’m trying to figure out if I’m missing something.

DCUM retirees need it.
They need to pay private school and college tuitions for the grandkids. Pay for they children’s weddings, put the down payments on children’s homes.
You can’t do that on 50k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Y’all are nuts. Who needs 200k in retirement?

Admittedly planning on owning the house outright, and my work should cover our insurance if I stick around to retirement age. But we are only planning on spending 50k or so in todays dollars and already feel like that’s going to feel lavish. Where are these 200k+ numbers going? Genuine question, I’m trying to figure out if I’m missing something.

DCUM retirees need it.
They need to pay private school and college tuitions for the grandkids. Pay for they children’s weddings, put the down payments on children’s homes.
You can’t do that on 50k.

They don't need it obviously--just have the money and want to do these things. The only things I think would be hard on a 50k budget are medical expenses--those are unpredictable but tend to go up with age and with a lot that insurance/medicare doesn't cover, major work on the house and travel.