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.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

not OP but we will never be able to save that much money for retirement. I guess we will be destitute.

Can someone explain why it’s 25 times your current hhi? We currently make 350k per year. We have a big house payment, daycare, and lots of other expenses that we definitely don’t plan on having in retirement. There is no way we need that same hhi when we are retired assuming no house payment. Shouldn’t it really be 25 times tour expected yearly expenses, not 25 times your current hhi?

Youre right. PP mis-stated things. 25x expected expenses.

Anonymous wrote:

Anonymous wrote:This is a dumb question. On dcum, it turns into a pissing match and everyone on here seems to have $1+ million by late 20s/30s, which is an absolute farce.

Median numbers are easily searchable. Your avg American has way less than $200k by their 40s.

Not in this area. OP will struggle with what she has.

Why? Other than 5 years of house payments in retirement they seem more than fine. Seriously.

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.

Yes. We are pretty UMC, but with MC parents. They are planning on retiring soonish, and as far as I can tell, mostly will rely on social security. They have some other savings and a paid off house, but I can't imagine they have anywhere near $1M. They told me "you know, we won't be able to visit as often when we are retired" because their budget will be more limited. But like, they stay with me when they visit, so it really is just plane tickets, so I was pretty surprised their retirement budget doesn't include enough for that. It seems pretty odd to me, but I think they are just pretty ready to retire. We can't increase our visits to them significantly either, because we still only have so much vacation time.

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.

Except when you do longer trips they tend to cost less on a daily basis. Also, when you're not constrained by time, dates, and schedules you get take trip around the very high season and save money and have a more enjoyable time without the crowds. That's what we've done in (early) retirement, taking month-long trips to places like Uruguay, Vietnam, Costa Rica, and Europe. And, believe me, it's still cheaper than when we were supporting our kids.

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.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DH is early 40s and has 350k, I'm mid 30s and have 500k. I feel we are a bit behind...

Probably better than us, 350k for me (about to turn 40), ~250k for my spouse (mid-40s). Also have almost 200k in home equity. I started investing early but I wasn't able to put much in for a long while - have only had the means to max out my TSP for the last 4-5 years.

I should be getting a federal pension as well, which will help at least.

You're not doing all that bad. Think about it: if everything goes to plan, you'll work another 25 years. And the last 15 you can contribute a lot more to 401ks and IRAs. You see people on this board with $3 million, $5 million, heck $7 million in assets. This is the top 1% of America. You don't need 5 million dollars to have an enjoyable retirement. That is, unless your idea of "enjoyable retirement" is skiing in the Alps and spending summers in the Italian countryside, dining out at 5-star restaurants and leaving your kids multi-million dollar trust funds. But I'd imagine that's not how you're living now. If you can pay off your home, you'll have your pension and plenty of retirement savings to live a really nice life.

Thanks! I think sometimes I have to remind myself the "normal" here and on sites like Bogleheads is not really representative of how most people live. I've run the numbers and I think we'll be in pretty good shape so long as we keep maxing out accounts.

Bogleheads is much more realistic than here, largely because people post from across the country not just HCOL areas like the DMV. I'd say the bulk of posters I see on BH are aiming for $1 to $1.5 million

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I always feel that DCUM oversaves

I don't get why people need over 100k in retirement. For most people SS almost gets you halfway there. And SS isn't going away, the age might go up and benefits might slightly decrease but most people should be expecting at least 2500 a month if they are working

Main point being 1-3 million retirement account fund at age 60-65 is plenty.

Some realistic benchmarks 1 million at 55

500k at 45

250k at 35

Our HHI is over $400K a year. We are certainly not going to retire if we have to live on 25% of what we currently make. It depends on current income and current and expected lifestyle

Our HHI is the same as yours and we could comfortably live on 25% of this in retirement. We'll no longer be saving for college or retirement, we'll have no mortgage and we won't have kid expenses (which I swear are about 90 cents of every dollar we currently spend). I could live large on 25% of this!

Yeah I don't get it. Most of our costs involve:

Mortgage (will get paid off)
Saving for college
Kids school, activities, food
Ancillary work expenses (commuting, parking, work lunches)

Eliminate that and we spend like $50k. Seriously.

Does that include taxes and insurance on your “paid off” house? Those two alone were about $20,000 a year on our house in Fairfax County. Our property taxes are considerably less in our new location, but insurance is much more, so it’s still a considerable hit.

I also spent less $$ on incidentals when I was working. I didn’t have time. If you’ve been home all day, going out for dinner is more appealing, not less. Even just doing stuff like working in the yard adds up — buying plants, grass seed, fertilizer.

Travel is a whole other category.

Don’t underestimate how much time you have to fill when you don’t have kids or a job.

YMMV. We’re retired, and did the “stay home and entertain ourselves around the house” thing last year because of covid, and it gets OLD.

What's up with all the scare tactics? If your taxes and insurance in Fairfax County were 20k you must have been living in a friggin mansion. My DC rowhome is appraised at $1.6 million and our taxes are 12k a year. Insurance isn't even $1000.

Beyond that, "going out to dinner" is nothing when you're not paying for kids.

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

Ha ha, no. It's not your income that matters, it's your spend rate. When I retired at 53 I was making 800k a year. By your calculation I would have needed $20 million! I retired with 1/5 of that and my lifestyle hasn't changed at all.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

not OP but we will never be able to save that much money for retirement. I guess we will be destitute.

Can someone explain why it’s 25 times your current hhi? We currently make 350k per year. We have a big house payment, daycare, and lots of other expenses that we definitely don’t plan on having in retirement. There is no way we need that same hhi when we are retired assuming no house payment. Shouldn’t it really be 25 times tour expected yearly expenses, not 25 times your current hhi?

25 times your anticipated expenses, not your current HHI. From Forbes:

"The 25x Rule is a way to estimate how much money you need to save for retirement. It works by estimating the annual retirement income you expect to provide from your own savings and multiplying that number by 25.

For example, let’s assume you’ve settled on a retirement budget of $75,000 a year. In this scenario, Social Security, pensions, a part-time job or other sources of income cover $25,000 of this amount, so you must cover the remaining $50,000 with your investments. According to the 25x Rule, you would need to save at least $1.25 million to be able to safely withdraw $50,000 of income in your first year of retirement. And keep in mind that depending on the type of account the money is withdrawn from, you may owe income or capital gains tax.

You’re able to safely withdraw this amount without depleting your portfolio early thanks to another personal finance guideline, the 4% Rule."

Anonymous wrote:

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

not OP but we will never be able to save that much money for retirement. I guess we will be destitute.

I have several friends who are currently in their early 60s and won't have that much money. Their plan is to work until they physically can't any longer. Not destitute, but not enjoying being retired either.

Anonymous wrote:

Anonymous wrote:OP, what's your current HHI, and are you on track to have 25 times that saved by retirement?

not OP but we will never be able to save that much money for retirement. I guess we will be destitute.

Can someone explain why it’s 25 times your current hhi? We currently make 350k per year. We have a big house payment, daycare, and lots of other expenses that we definitely don’t plan on having in retirement. There is no way we need that same hhi when we are retired assuming no house payment. Shouldn’t it really be 25 times tour expected yearly expenses, not 25 times your current hhi?