Anonymous
12/31/2022 14:44
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I’m not retired and we make a good living but we never eat out more than once a week. It’s wasteful and unhealthy.
It is healthy depending on where you go. Often better than home. And there is no such thing as wasteful in this context unless you also cooked a meal at home and did not eat it. Eating out is less wasteful than eating at home.
Do tell us. I haven't heard that. I thought it was generally accepted fact that eating out is less healthy than home cooking. Where do you go that serves healthier dishes?
Anonymous
12/31/2022 14:36
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I’m not retired and we make a good living but we never eat out more than once a week. It’s wasteful and unhealthy.
It is healthy depending on where you go. Often better than home. And there is no such thing as wasteful in this context unless you also cooked a meal at home and did not eat it. Eating out is less wasteful than eating at home.
"Wasteful" in the context of money and finances, is about expenditure - you spend more eating out vs cooking. Are you claiming that it's cheaper to go out and eat relative to cooking your own meals?
No but if you are worried about this retirement will not go well for you. Two more meals out a week will add maybe 6 months to your spend over a lifetime.
Anonymous
12/31/2022 14:21
Subject: Realistic calculator for retirement
Anonymous wrote:If I think we will need $100k per year for retirement, how big does my pension pot need to be?
It sounds like perhaps you’re planning on having an investment that provides a steady withdrawal like a pension, not an actual pension? I like to use Monte Carlo predictors for my planning of a similar situation, and then tailor it so the odds of running out of money early are acceptably low (I pick 10%). This provides some reasonable expectation of the desired annual draw without relying overly much on a single historical average like the 25x FIRE-type methods.
https://www.portfoliovisualizer.com/monte-carlo-simulation
Anonymous
12/31/2022 12:20
Subject: Realistic calculator for retirement
If I think we will need $100k per year for retirement, how big does my pension pot need to be?
Anonymous
12/31/2022 12:02
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I’m not retired and we make a good living but we never eat out more than once a week. It’s wasteful and unhealthy.
It is healthy depending on where you go. Often better than home. And there is no such thing as wasteful in this context unless you also cooked a meal at home and did not eat it. Eating out is less wasteful than eating at home.
"Wasteful" in the context of money and finances, is about expenditure - you spend more eating out vs cooking. Are you claiming that it's cheaper to go out and eat relative to cooking your own meals?
Anonymous
12/31/2022 11:10
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:If I have a paid off house and federal pension and live in a low tax state, how much will I really need have in savings?
There are certain possibilities like long term health issues, long drawn out medical treatments, stay in a nursing home, etc that there’s no way I can possibly save enough for, and it seems stupid to live on oatmeal now in case those things happen later.
I don’t have expensive hobbies or travel plans. Why would I need millions?
Most online calculators are from banks and finance companies and of course they will tell you to put in the absolute max.
I’m 42 and I have some time. Right now I have significant home equity, a secure remote job, but I did get a late start on retirement savings (was SAHM for a few years, 2008-2009 wiped us out, divorce was costly and I had to use some retirement funds) so I only have 100k in retirement and maybe 25k in cash.
Plan right now is to cash out of NoVa house in a few years, move to lower COLA, and be able to save quite a bit of my salary once kids are done with college.
Here's what I'd do to create an estimate..
- Estimate your current expenses; remove items that are childcare related or otherwise won't recur; add in expenses that will replace them (e.g. more travel). Assume a 3-5% annual inflation for this bucket and project that out to your year f retirement and beyond. That's your "maintenance" expenses.
- Estimate medical and long-term care costs in retirement and add them in to create a total budget
The above gets offset by pension and social security, both of which I'm sure you can estimate. If there's a shortfall, it needs to be funded by investments at 25X (e.g. if shortfall is $10,000/yr, you will need $250K in investments).
In addition to all of this, I'd say have at least 10X your annual expenses (1+2) above for the unforeseen (e.g. if annual expenses calculated above is $100K at the time of retirement, you'll need $1M). Adjust this number as needed. You'll know more as you get closer to retirement but I recommend planning for 10X as a goal.
You are only 42 and have a long runway to make this happen.
This is really good.
Anonymous
12/31/2022 11:08
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I think it's easy to imagine what your life would be like in retirement. I'm a different poster, but many of my parents friends don't travel as much because they want to be around their grandkids all the time. If they do it's like once a year or twice if with family. They also often have health issues or just anxieties that come with getting older and stay put more. One of my mom's friends has endless money and feels like all of her grandkids moved on to another area. She complains but she can easily buy a home or condo in their town. Fear keeps her back and I would imagine it would for so many other people. Fear of the unknown and fear of meeting new people and being in a different environment. I feel like I wouldn't be that way but it's easy for me to say that now when I'm super healthy, fit, no real fears, comfortable in many different environments. In 30 years I have no idea what I'd be like.
Depends. I don't know anyone whose kids live in the DMV. They travel several times a month either long drive or fly to see kids and grandkids.
Anonymous
12/31/2022 11:06
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I’m not retired and we make a good living but we never eat out more than once a week. It’s wasteful and unhealthy.
It is healthy depending on where you go. Often better than home. And there is no such thing as wasteful in this context unless you also cooked a meal at home and did not eat it. Eating out is less wasteful than eating at home.
Anonymous
12/31/2022 10:18
Subject: Realistic calculator for retirement
Anonymous wrote:If I have a paid off house and federal pension and live in a low tax state, how much will I really need have in savings?
There are certain possibilities like long term health issues, long drawn out medical treatments, stay in a nursing home, etc that there’s no way I can possibly save enough for, and it seems stupid to live on oatmeal now in case those things happen later.
I don’t have expensive hobbies or travel plans. Why would I need millions?
Most online calculators are from banks and finance companies and of course they will tell you to put in the absolute max.
I’m 42 and I have some time. Right now I have significant home equity, a secure remote job, but I did get a late start on retirement savings (was SAHM for a few years, 2008-2009 wiped us out, divorce was costly and I had to use some retirement funds) so I only have 100k in retirement and maybe 25k in cash.
Plan right now is to cash out of NoVa house in a few years, move to lower COLA, and be able to save quite a bit of my salary once kids are done with college.
Here's what I'd do to create an estimate..
- Estimate your current expenses; remove items that are childcare related or otherwise won't recur; add in expenses that will replace them (e.g. more travel). Assume a 3-5% annual inflation for this bucket and project that out to your year f retirement and beyond. That's your "maintenance" expenses.
- Estimate medical and long-term care costs in retirement and add them in to create a total budget
The above gets offset by pension and social security, both of which I'm sure you can estimate. If there's a shortfall, it needs to be funded by investments at 25X (e.g. if shortfall is $10,000/yr, you will need $250K in investments).
In addition to all of this, I'd say have at least 10X your annual expenses (1+2) above for the unforeseen (e.g. if annual expenses calculated above is $100K at the time of retirement, you'll need $1M). Adjust this number as needed. You'll know more as you get closer to retirement but I recommend planning for 10X as a goal.
You are only 42 and have a long runway to make this happen.
Anonymous
12/31/2022 09:34
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I think it's easy to imagine what your life would be like in retirement. I'm a different poster, but many of my parents friends don't travel as much because they want to be around their grandkids all the time. If they do it's like once a year or twice if with family. They also often have health issues or just anxieties that come with getting older and stay put more. One of my mom's friends has endless money and feels like all of her grandkids moved on to another area. She complains but she can easily buy a home or condo in their town. Fear keeps her back and I would imagine it would for so many other people. Fear of the unknown and fear of meeting new people and being in a different environment. I feel like I wouldn't be that way but it's easy for me to say that now when I'm super healthy, fit, no real fears, comfortable in many different environments. In 30 years I have no idea what I'd be like.
Anonymous
12/31/2022 09:07
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
I’m not retired and we make a good living but we never eat out more than once a week. It’s wasteful and unhealthy.
Anonymous
12/31/2022 09:02
Subject: Realistic calculator for retirement
Anonymous wrote:My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
I guess that is not a retirement that I would like. Certainly could live it if I had to but why would anyone? Travel more than twice a year for sure. Do it now not sure why dial back. Eat out once or twice a week? I am a cook and love to cook and eat in but that is pretty sucky. You might end up there but you want the freedom to do more.
Anonymous
12/31/2022 08:59
Subject: Realistic calculator for retirement
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:https://www.nerdwallet.com/investing/retirement-calculator
This calculator stupidly assumes that I need as much money during retirement as I need now when I will:
- have paid off my house
-no expenses for private school or college
- no more trips for 4 persons (plus no more expensive ski trips)
-no more expensive hobbies for DCs to pay (horses, sailing, etc)
There is no way I will need all of this. There is also no way I can pay for extended qualified home care. So what’s the point of this ridiculous calculator?
It’s not ridiculous. You’ll find new things to spend money on. You can eliminate income that went toward savings and work-related expenses (commuting costs). But other than that, most retirees who *can* spend about as much as they did before. Travel, expensive hobbies of your own, grandchildren, etc. Do you really plan to sit around your house all day?
Signed, a retired person
Well, obviously. One could always just spend *more*. I could go on luxury trips that cost $20k per trip or I could do the same trip on $2k. I could buy expensive clothes, get the best concert tickets at $350 per person, or I could go to the local university and get a similar experience for $20. I could take senior classes at the local college for next to nothing or go on guided archeological tours for a multiple. I mean there are no limits to spending money. Doesn’t mean I will become wasteful in retirement.
No. Not wasteful. But you will spend every dollar you do now with healthcare likely replacing your other expenses that went away. You also may want to do other stuff that will cost and maybe help out kids even if just a hundred or two once and a while. I would run it at currect expenses and then work backward from there.
Anonymous
12/31/2022 08:46
Subject: Realistic calculator for retirement
My parents retired to coastal Maryland and live on 70k/year. They aren’t extravagant at all but they do go out to eat once a week or so, travel twice a year across the country, have excellent medical care. Just in case anyone thinks you need to have 200k in retirement to live a comfortable life.
Anonymous
12/31/2022 08:40
Subject: Realistic calculator for retirement
Anonymous wrote:I agree OP.
Once the kids are out of college and we are ready to retire we can downsize to a lower COL and our expenses will plummet. I am estimating 50k a year for us as a couple. (And this is being pretty generous. We could swing it on $35.)
We will have either no mortgage, an extremely low one, or rent. We are modest people -- our biggest splurges are occasional travel and our kids.
So in my case let's say we need about 4k a month. Maybe a third will come from SS and a third from our retirement funds (about $1 mil) and a third from savings/profit from our house which we plan to sell (about 1 mil).
I think we'll be fine. And I think my kids will still get a little chunk of change when we die.
So for people/couples like me (not big spenders or lavish lifestyle) I would sat $2 mil plus SS.
I think you have to double to $100k. My parents retired in 1997 and moved to a lower COL (Carolina coast). They spent about $50k a year then. They were frugal depression babies and generally took one big (not DCUM big) trip a year. So, with inflation, I think you need $100k to do it now- more if your retirement is further off.
I would also caution you about the lack of decent primary care doctors in many LCOL areas. Both my of my parents’ lives were cut short by inept doctors.