It'll also vary greatly based on cost of living where one lives, and whether they can contain their spending. I think I spend a lot. Stress spending, dining out too much, etc. But when my kids are successfully fledged, and my job is left behind, then I think I can reel in my cost structure to whatever I need for hiking, biking and some modest travel.

It's obvious I know. But the goes-outs are (I believe) even more important than the comes-in in this scenario. Our economy is designed to drain you. You've got to be disciplined, or very very wealthy.

You need a lot more money to retire on, if you’re tempted to buy all the jim-dandy shit you learn about on Sigforum.

There are some great tools out there to assist. For example, Fidelity has software on their site that allows you to plug in your numbers and make specific assumptions that will then show you how the money will last given those assumptions. It allows the ability to show inflows of pension and SS monies. It allows to factor in inflation but as we've seen recently that one is a wild card.
For us, I used what we had been spending that last several years and added an annual 4% inflation rate. Played with the software until it held together until 105 for my wife. (a real possibility given her mom is now 105.
In the end its an inexact science. Due to the recent inflation and family situations we haven't been spending as freely as we did pre retirement and have even done some part time work to keep a little $ coming in. You have to be willing to tweak your spending in retirement as you see some of your assumptions change that are out of your control like the recent inflation.
We haven't tapped any of the retirement accounts in the nearly 4 years of retirement and the plan was to be taking 4% annually. The way I see it the longer we can delay that the better.
One other caution I'd point out for many. As tempting as it may be you shouldn't factor in any anticipated inheritance windfalls. Situations such as extended long term care can blow that up easily. Your plan has to stand on its own.
I'd also point out something I wish I had understood better during my planning. That is, get as much as you can into Roth and HSA accounts that can be withdrawn tax free. It's tempting to go traditional IRA because its cheaper to fund. But, having the flexibility on the back end is worth passing up the short term tax cuts on the front end. You need the flexibility of withdraws on the back end. I did an ok job of this but wish I had done better.

It's pretty easy to figure out. How much per year do you need to live on when you retire?

quote:

Originally posted by frayedends:
but then showed us with 2 million in savings when we die. I explained that I want to die with $6 leftover.

One thing I discovered from talking to various financial planners over the years is that they all assume you want to leave a boatload of money to your kids. I'm leaving mine a rowboat and a paddle. They can find their own money. It's amazing how much the calculations decrease with this mindset.

quote:

Originally posted by pace40:
I'm leaving mine a rowboat and a paddle. They can find their own money.

I'm in your camp. It has always puzzled me how/why parents will work themselves into the poorhouse for their (adult) children. From paying for college, to cosigning car loans/mortgages, to leaving them boatloads of money when they croak.

Nope. Not here. I earned my own way and am better for it. They can, and will, do the same.

^I plan on my very last ATM withdrawal before I die to come back with a message, "Insufficient funds."

I told my Dad to enjoy his money and that I'd laugh my ass off if the check for his headstone bounces.

I would suggest finding a wealth management specialist/advisor and talking to him or her about the many questions surrounding retirement. We found ours when we were living/working in the Jackson, Wyoming area. He has since moved his family to Billings, Montana and works with another bank, but we stayed with him. He lived and worked in Cheyenne before we met him and still has clients down here. We get together yearly and have him out to the house, sometimes with his wife if she can get free to go. It’s a good place to start. Your friends in the Forum (including me) will have advice all over the board, but retirement and finances is a very personal thing and wants, needs, and expectations are different for all of us. Best to you.

I want to enjoy my retirement. I would love to leave a healthy chunk for my kids. The whole they can do it themselves is fine but if you raised them right and give them a leg up as well I see no downside there.

Generational wealth is a good thing. Do it right for a couple generations and your family owns the town (so to speak). Struggling to make ends meet is a great story for a movie, not nearly as good a story to live through.

If I can help my kids, if I raised them right, if they raise theirs right, everybody in my family wins. What’s the old saying? Society wins when the old men plant trees they will never sit in the shade of.

Thank you everyone.
The responses are exactly the kind of information I was looking for.

My wife and I have been saving for our retirement since we were married over 30 years ago. As you start to get closer to that goal of retirement you start to wonder if you save enough money. Over the years I have heard all kinds of dollar figures needed so it can be confusing.

Years ago most companies had a pension plan for their employees, that and social security were all most people needed.

One of the biggest thing I have read is you have to go into retirement as debt free as possible. This could make or break your retirement. I know a person who is in their 80 and still has a mortgage. That's a big chunk of money monthly out of his pension.

I have seen some of the figures posted by members and the one that stands out is the numbers XerO points out. The $426,000 number I have seen more than once in articles I have read.

I have also read that there are a very large number of Americans that have nothing saved for retirement and they plan on either working till they can't or just trying to live off social security. I have also read that you can live very well on just social security if you move to one of the South American country for your retirement but there are fallback to living in a another country.

The $1,000,000 dollar figure was explained to me years ago. It was thought if you had $1,000,000 in a safe investment it would pay around $50,000 dollars a year in interest(5%) and combined with social security that should be plenty of money to live off.

In theory the principal should remain the same as you were only drawing interest and it was something you could leave to your family when you died.

I wish my folks would spend their money and enjoy it in their twilight years. As it is, their cost of living is so low, they can't spend their RMDs from their retirement accounts, and so give some to my sister and me each year. They're selling their boat now, as it's too much for them to handle anymore. But they have a ton of home equity they'll never tap. It's to shop for gifts for them when they have everything and want for nothing.

In my work I deal with people every day who literally count the minutes until their SS deposit arrives on their Direct Express card - they can't have a bank account. They pay their rent, maybe CarShield, life insurance, a few cartons of cigarettes and they have $100 left for the rest of the month. I see this every single day. It's a great lesson for how not to live and to make sure I square things away long before things get to that point.

quote:

Originally posted by Rick Lee:
In my work I deal with people every day who literally count the minutes until their SS deposit arrives on their Direct Express card - they can't have a bank account. They pay their rent, maybe CarShield, life insurance, a few cartons of cigarettes and they have $100 left for the rest of the month. I see this every single day. It's a great lesson for how not to live and to make sure I square things away long before things get to that point.

This is the best lesson yet. Unfortunately, this kind of lesson doesn’t get learned unless you see it in play in a couple of people around you. You can easily spend more to decrease your savings. It’s more difficult to spend less to increase your savings.

You google “median and average savings for each age bracket” and you will see the majority has inadequate savings for retirement. The median net worth of 55 to 64 years old is $365,000. For 65 to 74 year olds, it’s $410,000. Net worth is the sum of all their assets including houses minus their liabilities. Median is the people at the exact middle of the range so exactly half of the people in those age ranges have less than that. Even if that was all cash and you pull out 5% each year, is $20,000 supplemented by Social Security sufficient for you to live on? If you double that to $40,000 would that be sufficient? But at $40,000 you would be lucky if it last 12 years. Do you plan on living for less than 10 years retired?

In real life, spending increases in the early part of retirement for vacations, splurges, etc. Then it goes down. Spending goes back up in the later part of retirement because of your health.

The people I deal with don't have to worry about running out of money because they never had any. They're mostly on Medicaid and don't even have to pay for their bus fare to the doctor. They never see a bill for any of their meds or doctor visits, so they don't care. And those are the people SS and Medicare will always, always be there for, no matter what happens to the people who really pay the bills.

Lots of great advice here.
I agree with the early post about track your expenses for 2 years. This should give you a solid number for what you'll need...as a starting point.

I wouldn't even consider retiring if I had a house or car payment.

"Quote"
You google “median and average savings for each age bracket” and you will see the majority has inadequate savings for retirement. The median net worth of 55 to 64 years old is $365,000. For 65 to 74 year olds, it’s $410,000. Net worth is the sum of all their assets including houses minus their liabilities. Median is the people at the exact middle of the range so exactly half of the people in those age ranges have less than that. Even if that was all cash and you pull out 5% each year, is $20,000 supplemented by Social Security sufficient for you to live on? If you double that to $40,000 would that be sufficient? But at $40,000 you would be lucky if it last 12 years. Do you plan on living for less than 10 years retired?

In real life, spending increases in the early part of retirement for vacations, splurges, etc. Then it goes down. Spending goes back up in the later part of retirement because of your health.[/QUOTE]

This is an incomplete analyst and not how I see it.

Lets say you have a $500k retirement acct. Get $2000 in SS. Own your own home. Have $25k in a saving acct.

You can live a long happy retirement life on $40k a year for as long as you and your spouse live and have a nice gift to pass on to your children if you have any.

quote:

Originally posted by Skins2881:
First off $1,000,000 is not enough to retire for someone of my age, not even close.

Not knowing your age, your annual non-discretionary expenses, and the lifestyle to which you're accustomed: That number is meaningless to anybody else.

quote:

Originally posted by Xer0:
Well compare yourself to the average amount people have at age range of 55-64 (just choosing this bracket because it's the "time to start worrying hard" age) which is about $426,000.

That's damn close to what our retirement account had in it when I retired. Here we are, six years later, having withdrawn from it enough, every month, to make up the difference between SS and what I used to take home, and there's still about the same amount in it as when I retired--depending upon the current state of the markets.

But, we never lived an exorbitant lifestyle, our modest home was paid off three years after I retired, we owned both vehicles (purchased used) outright w/in about 4-5 years after I retired, we had no other significant debt, there was a modest amount in regular savings and checking accounts, we don't live in an overly expensive area, and we're in reasonably good health.

quote:

Originally posted by old rugged cross:
"Quote"
You google “median and average savings for each age bracket” and you will see the majority has inadequate savings for retirement. The median net worth of 55 to 64 years old is $365,000. For 65 to 74 year olds, it’s $410,000. Net worth is the sum of all their assets including houses minus their liabilities. Median is the people at the exact middle of the range so exactly half of the people in those age ranges have less than that. Even if that was all cash and you pull out 5% each year, is $20,000 supplemented by Social Security sufficient for you to live on? If you double that to $40,000 would that be sufficient? But at $40,000 you would be lucky if it last 12 years. Do you plan on living for less than 10 years retired?

In real life, spending increases in the early part of retirement for vacations, splurges, etc. Then it goes down. Spending goes back up in the later part of retirement because of your health.

This is an incomplete analyst and not how I see it.

Lets say you have a $500k retirement acct. Get $2000 in SS. Own your own home. Have $25k in a saving acct.

You can live a long happy retirement life on $40k a year for as long as you and your spouse live and have a nice gift to pass on to your children if you have any.[/QUOTE]
It depends where you live. If I was only bringing in $40k a year my hobbies would be watching tv and rarely leaving the house. Thats with no loans at all.

quote:

Originally posted by frayedends:
I’d say people overestimate how much they need. Most calculators assume you will live to 90 (good luck) and that you will be partying and going out all the time at 75. My financial guy did a scenario saying we needed to wait till age 67 but then showed us with 2 million in savings when we die. I explained that I want to die with $6 leftover.

Agreed!

The famous 4% Rule was from an exercise looking at a theoretical 30 year retirement starting at the very worst year in the last 100+ years. In short, the worst case scenario was that retiring in one specific calendar year, spending 4% of the value of the portfolio each year, indexed for inflation, would result in just barely not running out of money. For every other retirement year the person would die with money in the bank.

Most retirees end up with more $ at death than they began retirement with, using the 4% rule. So, most people could have enjoyed spending more.

We can't know if our retirement year is a good or bad financial one to start our retirement, though a down market at the beginning of retirement is far worse than a down market further into retirement. I think I may have retired at a bad moment, December 2021, since it has been a down market ever since.

One planner I've followed recommends the "Guardrail" method. Start with something like 5% or whatever sounds right for you. He generally uses 5.7% in his examples. Increase it for inflation each year. But never let it be more than some percentage of your portfolio, maybe 7% or 8%. So if your portfolio drops by half, you will reduce your spending some but not by fully half. And, conversely, never have your spending be less than some percentage of your portfolio, say 4%. If the market soars, you might as well take some of it and spend it now (or donate it or give it to your kids, etc) rather than letting the portfolio grow and grow and grow without you benefitting.

The entire question of retirement savings relies on numerous variables we cannot control nor predict.