How much do people have saved for retirement?

[Anonymous]

We're about 10 years away from retirement (at age 65) and we have $881K in my husband's various retirement accounts. I stayed home with the kids for a while, but have been putting money into accounts from jobs I have had plus ROTHs we started years ago, which total $213k. (Our SS estimates are separate from these amounts. Our most current SS statement said at retirement we will have monthly SS payments of $2995 for my husband and $2000 for myself)

We have about $70k in cash accounts that we never touch. We have one last kid in college starting this year, and our college funds are good and will cover the next four years. Just refinanced to a 15 yr mortgage which only increased our payments by about $1000. No car loans, no other debt.

My issue is that my husband always thinks we should be saving more. Which for years, I've been fine with, but now I feel like we're saving TOO much. Im not sure if the tax advantages are such that it makes sense to decrease our taxable income this way or if there's something else we could be doing with our money. I know it will sound crazy, but whenever I suggest spending money on a new couch or painting the house, he acts like we have no money. (To be fair, his dad was the same way when he was growing up. They always had hand me downs, never took a vacation, and turns out he was saving so much and is now loaded, but still won't spend any money.)

So what do people think is reasonable for retirement savings at age 55? Yes, I would like to travel, and live well in retirement, but we're not super extravagant people anyway. Thanks for sharing your perspective.

[Anonymous]

You should have more.

[Anonymous]

If DMV area, what you have is not enough. We are about 2-3 years older than you. Our savings is probably about x2.5 of what you have not counting pensions (2) and SS payments. You are clearly not saving too much.

[Anonymous]

DCUM is crazy about this. Normal people would feel like you do - and would feel that, with over $1 million in retirement savings and another 10 years to go, of course you can travel and buy a couch.

On DCUM they'll tell you to move into a garden apartment rental and eat only rice and beans until you hit $11 million, then maybe you can get takeout pizza once a year.

[Anonymous]

Anonymous wrote:DCUM is crazy about this. Normal people would feel like you do - and would feel that, with over $1 million in retirement savings and another 10 years to go, of course you can travel and buy a couch.

On DCUM they'll tell you to move into a garden apartment rental and eat only rice and beans until you hit $11 million, then maybe you can get takeout pizza once a year.

Haha yeah-I can see that. Just don't want my husband to be right! But maybe he is! Grr.

[Anonymous]

You have enough money for a new couch, for sure. Whether you have enough saved for retirement kind of depends on where you want to live, how long you're likely to live, and what you want retirement to look like in terms of travel, funding things for grandkids, etc.

[Anonymous]

It depends entirely on what you think your expenses will be but I would not be comfortable with your current levels of savings, particularly when combined with low SS combined payments. I am also about 10 years out and we are saving/paying down mortgages pretty aggressively at this point (post college/weddings).

$1m in savings will get you around $40k/year if you draw it down. Your $5k in SS gets you $60k. So that's $100k/year. Sounds like you will still have a mortgage for the first 5 years. Only you can answer if that's enough.

[Anonymous]

Anonymous wrote:It depends entirely on what you think your expenses will be but I would not be comfortable with your current levels of savings, particularly when combined with low SS combined payments. I am also about 10 years out and we are saving/paying down mortgages pretty aggressively at this point (post college/weddings).

$1m in savings will get you around $40k/year if you draw it down. Your $5k in SS gets you $60k. So that's $100k/year. Sounds like you will still have a mortgage for the first 5 years. Only you can answer if that's enough.

dont' forget the tax

[Anonymous]

You need to think about long term care. These unexpected expenses can wipe you out. Don't rely on Medicaid because you could end up in a horrible facility.

[Anonymous]

Anonymous wrote:DCUM is crazy about this. Normal people would feel like you do - and would feel that, with over $1 million in retirement savings and another 10 years to go, of course you can travel and buy a couch.

On DCUM they'll tell you to move into a garden apartment rental and eat only rice and beans until you hit $11 million, then maybe you can get takeout pizza once a year.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:DCUM is crazy about this. Normal people would feel like you do - and would feel that, with over $1 million in retirement savings and another 10 years to go, of course you can travel and buy a couch.

On DCUM they'll tell you to move into a garden apartment rental and eat only rice and beans until you hit $11 million, then maybe you can get takeout pizza once a year.

Haha yeah-I can see that. Just don't want my husband to be right! But maybe he is! Grr.

How different are you, in terms of what you think is appropriate here? And what do you expect your expenses to be post-retirement? Like are you going to sell the house and move to a cheaper area so you can relax - or what?

I mean, I'm broke for DCUM standards and rich for normal American standards, and you sound fine to me. You sound great. My parents, who are in their 70s, have $1 million saved for retirement and travel constantly. They are having a great time. Or at least they were before the pandemic. Their house is paid off - which helps - and they live in a cheaper area, but it's not dirt cheap.

[Anonymous]

We have almost 400k in 401k, 50k in Roth, two paid houses in nice areas from inheritances, my pension (I'm a gs15) and we're almost 30 years away from retirement. Kids have enough for college and possibly some grad school. We have more than enough.

[Anonymous]

We are 53 and 55. We have $1.8M in retirement. We plan to retire in 5 years with $2.5M. We will not be living in DMV. Our house will have about $500k in equity when we sell it, and we hope to buy our new home with that money in a new location. We don't live extravagently.

As far as buying things, we put a certain amount away each month for retirement. Buying a new couch would not take away from that amount. It might take away from new clothes or vacation but not from retirement. You might be able to use that argument with your husband. A new couch will not affect retirement.

[Anonymous]

You don't tell us your HHI or expenditures or planned expenditures in retirement so we can know what's right for you--but Fidelity estimates that to retire at 67 you need 7x your current household income at 55. So if your current HHI is around 155k, you're on target--though if you want to retire at 65 instead of 67 you might need a bit more.

Also, healthcare is the wildcard--current average needed for retirement for a couple is 300k for all post 65 health expenses excluding long term care. (But I think that's figured into the Fidelity estimate).

And--just FYI--Social security may not pay off the amount you expect, be taxed at a higher rate in the future or tweak cola increases etc. Even though you are 10 years away, you are also retiring right at the expected point the SS surplus funds run out (and recent fiscal policy likely will worsen this). Our advisor suggests figuring SS in at 75% to be cautious.

The thing is also that it's really hard to know where retirement balances will go--but running out of money is way worse than having too much. So people may die "loaded" but still have saved the right amount to address the range of uncertainties. But your husband may be responding to this with anxiety about spending anything.

All that said, it sounds like you would benefit from a visit with a fee-only financial planner where they can figure out these details AND where you can have a third party likely tell you both that even if you need to keep up your level of retirement contributions, there is still room to buy a couch and paint the house. That neutral, expert voice can help move your husband away from just fear-based invest all the surplus possible.

For what it's worth, our HHI is around 120k, we're 50&55 and have about 1.5 million in retirement assets. We feel like it's likely to be a bit more than we need so we're contributing less (15% with the match) and spending a bit more freely now.

[Anonymous]

Anonymous wrote:You need to think about long term care. These unexpected expenses can wipe you out. Don't rely on Medicaid because you could end up in a horrible facility.

+1000