Are the calculations per person or per household?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you calculate a pension for total retirement assets?

There are several ways and it depends on the type of pension. This is a good, if dense, explanation: https://andrewmarshallfinancial.com/what-is-a-pension-worth/

It gets easier to value a pension as you get closer to age of retirement to earn the full pension. I am 5 years out now, so I have a good idea of what my initial pension payment will be (mine is 60% of the average of the top three years of earnings, so I can extrapolate fairly easily based on current salary). My pension is inflation adjusted as well, so I follow the calculations at the link for inflation adjusted pensions.

Thank you for posting this site. I have always wondered about this, and the table make the calculation easy.

It is an easy to use table but they don’t have a way to address the value of a pension for a couple if only one person has the pension and the survivor gets a fraction, say half.

You could estimate longevity for the main pension holder and then add the calculation for half of the pension for the survivor starting with their age upon the estimated death of the main pension holder.

So, for example, if the main pension holder is a 45 year old male, 15 years from retirement, you would take the pension amount times the appropriate multiplier. If you assume that he will die at 80 and the surviving female spouse is five years younger, you would take half the pension amount and multiply that by the multiplier for a female age 75 with zero years before taking the benefit. Then you add the two amounts together.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our goal which we are on track to make is the 95th percentile.

I’m purposely not comparing myself to the “I can’t retire with a NW of 10M” crowd. I’m running my own race.

DH has about $1.3 mil in his retirement account. Yesterday, we looked at the growth month to month for the past 9 months. Growth per month averaged about $16.5K. Exclude taxes, it would be like $11.5K net. We can totally live off of that. And that's just his 401k. We have other accounts, and my 40k1 will have probably $1.7mil (conservative) when I'm 59 in a few years.

We could live off of the growth and not touch the principle. And in the years where the market tanks, we'll have cash saved from the previous years where we took out the growth only so we don't have to withdraw from our 401k. Our expense are not $20K/month.

Lol at basing one's retirement strategy on a 9-month period during a bull market.

These subjects have been extensively studied - if you're retiring early (and, yes, 59 is early), you can safely pull out like 3% per year of his $1.3M, or $39K per year before taxes. After taxes, that's maybe $2,500 per month. Don't feel so rich anymore, do you?

? I guess you didn't read the rest of the post. I bolded it for you.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

So if you are no longer paying for your kids day-to-day and no longer saving or paying for college and your house is paid off…seems like $200k per year keeps you in the same lifestyle.

Anonymous wrote:

Anonymous wrote:How do you calculate a pension for total retirement assets?

There are several ways and it depends on the type of pension. This is a good, if dense, explanation: https://andrewmarshallfinancial.com/what-is-a-pension-worth/

It gets easier to value a pension as you get closer to age of retirement to earn the full pension. I am 5 years out now, so I have a good idea of what my initial pension payment will be (mine is 60% of the average of the top three years of earnings, so I can extrapolate fairly easily based on current salary). My pension is inflation adjusted as well, so I follow the calculations at the link for inflation adjusted pensions.

Thanks PP!

My parents have about 600k liquid and another 700k in their paid off home. They have over 200k/yr in passive income though (pensions, SS, annuities, investment distributions). They’re fine.

These figures don’t take into account the significant passive income that retirees have from pensions and SS. You have to have a lot more if you plan to retire at a youngish age without relying on SS (because who knows what will happen) and most people don’t have a pension nowadays.

If you get $2500/mo from SS that’s about a 1M portfolio @ 3% withdrawal ratio. Add pension and it’s easily equivalent to another 1-2M.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

Actually to maintain your same standard of living, you need far less actual income because your home is paid off, and you are no longer actively saving for college and retirement. So if (for example) your monthly mortgage is $4k, 529 savings is $2k, and retirement savings are $4k, that's 10k/month you are spending now that you won't need to spend in retirement.

Don't forget much lower taxes: no SS/Medicare taxes, lower tax bracket overall, some tax-free income (Roth IRA), some tax-favored income (capital gains and dividends). So, yes, MC/UMC/kind of wealthy people grossly overestimate how much they need for retirement.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you calculate a pension for total retirement assets?

There are several ways and it depends on the type of pension. This is a good, if dense, explanation: https://andrewmarshallfinancial.com/what-is-a-pension-worth/

It gets easier to value a pension as you get closer to age of retirement to earn the full pension. I am 5 years out now, so I have a good idea of what my initial pension payment will be (mine is 60% of the average of the top three years of earnings, so I can extrapolate fairly easily based on current salary). My pension is inflation adjusted as well, so I follow the calculations at the link for inflation adjusted pensions.

Thank you for posting this site. I have always wondered about this, and the table make the calculation easy.

It is an easy to use table but they don’t have a way to address the value of a pension for a couple if only one person has the pension and the survivor gets a fraction, say half.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

Actually to maintain your same standard of living, you need far less actual income because your home is paid off, and you are no longer actively saving for college and retirement. So if (for example) your monthly mortgage is $4k, 529 savings is $2k, and retirement savings are $4k, that's 10k/month you are spending now that you won't need to spend in retirement.

Anonymous wrote:

Anonymous wrote:Our goal which we are on track to make is the 95th percentile.

I’m purposely not comparing myself to the “I can’t retire with a NW of 10M” crowd. I’m running my own race.

DH has about $1.3 mil in his retirement account. Yesterday, we looked at the growth month to month for the past 9 months. Growth per month averaged about $16.5K. Exclude taxes, it would be like $11.5K net. We can totally live off of that. And that's just his 401k. We have other accounts, and my 40k1 will have probably $1.7mil (conservative) when I'm 59 in a few years.

We could live off of the growth and not touch the principle. And in the years where the market tanks, we'll have cash saved from the previous years where we took out the growth only so we don't have to withdraw from our 401k. Our expense are not $20K/month.

Lol at basing one's retirement strategy on a 9-month period during a bull market.

These subjects have been extensively studied - if you're retiring early (and, yes, 59 is early), you can safely pull out like 3% per year of his $1.3M, or $39K per year before taxes. After taxes, that's maybe $2,500 per month. Don't feel so rich anymore, do you?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Does "wealth" include equity in your primary home?

In the study cited it does.

Makes sense because many people do "downsize" to a lesser costing home around retirement (despite what the other thread might have you think).

You can’t downsize to zero home value unless you are planning on living in a tent. So even if you are going to include some of it, it definitely doesn’t make sense to include all of it. Renting is also expensive and rent will increase over time. Someone who gets 500k proceeds on the sale of their only will only get $1667 per month to cover their new housing situation if they are renting So there is a high risk they end up spending all the money from selling their home before they die.

Anonymous wrote:The media generally lacks perspective and context and likes to talk about "the never-before-seen transfer of wealth between the boomers and their kids".

What they fail to mention is that people have higher standards of living than in past generations and we are on our way to a multipolar world, leaving behind post-WWII American supremacy.

So yes, we'd better have money saved.

“Higher standard of living” is an exceedingly polite way of saying people spend too much on stupid shit

Anonymous wrote:

Anonymous wrote:How do you calculate a pension for total retirement assets?

There are several ways and it depends on the type of pension. This is a good, if dense, explanation: https://andrewmarshallfinancial.com/what-is-a-pension-worth/

It gets easier to value a pension as you get closer to age of retirement to earn the full pension. I am 5 years out now, so I have a good idea of what my initial pension payment will be (mine is 60% of the average of the top three years of earnings, so I can extrapolate fairly easily based on current salary). My pension is inflation adjusted as well, so I follow the calculations at the link for inflation adjusted pensions.

Thank you for posting this site. I have always wondered about this, and the table make the calculation easy.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.

This 1000%. If you are living in a 5k Sq ft home with your 2-3 kids, spending $400K/year now on life and the kids, you are most likely planning to maintain a similar standard of living in retirement, most likely with 1 condo/TH and a second home as well. To do that you need more $$. Sure you could retire on much less, but most people want to continue a similar standard of living

Anonymous wrote:

Anonymous wrote:99th percentile of retirees have $16.7M of wealth.

95th percentile of retirees have $3.2M of wealth.

90th percentile of retirees have $1.9M of wealth.

https://finance.yahoo.com/news/super-wealthy-retirement-looks-savings-095900179.html

Does this change the way you think in terms of how much you need to save to retire?

Thanks for posting this. It points out how ridiculous was the recent thread asking if $10M is enough to retire.

If you are already in the 1%, which many in dcum are, $10m is not that crazy if you want to continue with the same lifestyle.