For the younger crowd, I would add that planning involves a holistic approach not just hypothetical math.

Generally, retirement savings are not counted towards your kids' student aid calculations. Imho it is best to maximize your own retirement savings before even considering saving for kids' college. Lots of reasons, but this is a good one.

ROTH is usually superior in retirement to traditional IRA and 401k. ROTH withdrawals are "invisible income" as far as taxes when you are retired, whereas traditional IRA/401k withdrawals count against you many ways as taxable income. Maximize ROTH today despite paying taxes now.

Have proper life insurance NOW. Your surviving spouse needs to be protected for anything your income was supposed to support. House payments, college for the kids, etc. It doesn't have to be a huge amount of coverage, but it needs to be adequate to not leave your family in a hole, like having to move to a crappy home or your spouse having to work 10 extra years rather than retire. Get TERM insurance not a whole life or universal life type of product.

Have a good Will, Trust, Medical Directive, and power of attorney. Not from the internet but from a good local atty who specializes. It is worth the money.

None of this is hard to understand and implement. It just isn't taught.

quote:

Originally posted by 71 TRUCK:

One of the biggest thing I have read is you have to go into retirement as debt free as possible.

I honestly believe this needs to be taken to the next level... zero debt.

quote:

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

You can live comfortably in this country but you have to plan for it. The 2 most deciding factors 20 years ago governing our decision to move to PA was the low property tax and that the state does not tax retirement income of any kind including 401k or IRA withdrawals.

quote:

Originally posted by ensigmatic:

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.

Exactly.

That is exactly why the missing paragraph from you quote expressed it in percentage of preretirement income instead of a meaningless number. I plan on having enough money to retire with close to same income in retirement as I have during my working years.

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]

Well I guess I should of said many ordinary folks living in flyover America outside major affluent cities and high end gated communities. $3500 month is plenty to live on for many of us that don't just watch tv or are house bound.

To answer your question - $865,412.90.

I've done the math.

quote:

Originally posted by Russ59:
To answer your question - $865,412.90.

I've done the math.

Wow. I think you had a small math error. Sure it isn’t $867,530.90.

You can't even come close to an answer unless you can correctly forecast inflation. Good luck with that.

"The aging of America means more old people on fixed incomes are overwhelmed by the high cost of housing and other financial shocks; ‘not seen since the Great Depression’"

https://www.agingcarefl.org/re...ng-into-homelessness

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.

First, I never said it was a complete analysis, much less an analysis at all. Even my much longer first post in this thread was a conservative ballpark analysis with puts and takes.

Second, while my “analysis” may be incomplete, your response shows you misunderstood what I said. I said the median net worth of 65 to 74 year olds is $410,000. Then the example you use has $500,000 in retirement savings, own their own home, and have $25,000 in a savings account. Do you not realize this is a net worth considerably more that the median net worth of 65 to 74 year olds? So yes, you’re painting a better picture than considerably half the people in their age bracket so you will have better odds of making it in retirement.

Sure, you can live on $40,000 a year. But after paying taxes on that, how much wiggle room do you have for inflation, major house repairs, major car repairs, ongoing major medical bills?

Heck, many people even retire on just their social security. Because they have to.

You know the saying I have seen in this forum about how “one is none and two is one?” Do you believe in that? Do you think that principle can be applied in planning for one’s retirement?

My financial advisor has a Monte Carlo model which displays balances based on probabilities, and then provides a rating of your present funding level (e.g. well-funded).

In case anyone can use these:

Monte Carlo sim

4 percent rule

quote:

Originally posted by ugeesta:

quote:

I know this can be a tricky question for people based on, where you retire to, what will you do in retirement(travel, hobbies and the like), possible medical needs, will you still work part time to keep busy or for a little extra income.

Answer this question and you will know. All depends on the amount of spending and length of retirement.

That said, the rule of thumb I heard was $2.0mil per person. Sure it can be a lot less but again, it depends on your lifestyle and how frugal you can be.

$2 mil per person is quite a number..

The data I saw said less than 10% of households have a net worth of $2 million and less than 4% have a net worth of 4 million.

Of course a lot of variables come into play but most of the people here don’t have nor will have that kind of portfolio.

quote:

Originally posted by tatortodd:
My financial advisor has a Monte Carlo model which displays balances based on probabilities, and then provides a rating of your present funding level (e.g. well-funded).

I believe that this is basically what the Fidelity tool is in the earlier post. It shows you outcomes at a normal market and then 1 Standard Deviation up and down. When I was able to get it to hold together with the wife hitting 105 and there still being $ there I was confident we were ok.

quote:

Originally posted by 71 TRUCK:


He also did financial planning so we asked " How much money in savings do you really need to retire?" his response was, "you need to have at least a million dollars in the bank."
This has been the same answer we have been told over the years by several financial planners we have dealt with....


.....I have known people who did not spend their money in retirement because "they were saving it for the children or the grand children".


.....So my question stands "How much money in savings do you really need to retire?"

Not sure it's a matter of how much money in savings, rather how much money can you get coming in (hopefully w/o touching the principal)?

I looked at this 25-30 years back and made the decision that rather than build savings I would build wealth. This involved borrowing some money to purchase income generating property. I did this simply because I wasn't sure I'd be able to accumulate enough in savings interest, bonds, etc, that the interest would support my lifestyle. It was a good decision for me at that time because once the properties were paid for I was able to retire early and live off the rents. The properties I will leave to my children and grandchildren.

Anybody have an idea of what heath insurance costs actually look like when not subsidized by an employer/VA/Medicare/Medicaid? I keep hearing it's crazy high, but I'm curious to know an actual number.

The real retirement killer is debt. I can't imagine how so many folks intend to retire while still making house payments or paying rent, 7 year car loans, credit card debt, etc.

We have been comfortably retired for 8 years after a half-century of living modestly. While everyone around us were refinancing the house to pay off the credit cards every couple of years we were doubling down on the house payments, retiring the mortgage, then putting those house payments in the money market account.

We retired debt-free with two social security benefits, a VA disability benefit, 3 pension plans, 4 IRA & Roth accounts, plus a growing investment account. Now we are facing the Required Minimum Distribution (RMD) rule, forced to draw on qualified retirement accounts for the first time ever.

So we have to take a raise in our income that we really don't need, and it just goes into the money market account and adds to our savings.

Being debt-free adds a whole new flavor to life.

How much savings is needed for retirement? Our plan always included having one year of all expenses in savings as a minimum. By eliminating the debt and investing those payment dollars we grew that to about 12 years.

quote:

Originally posted by 92fstech:
Anybody have an idea of what heath insurance costs actually look like when not subsidized by an employer/VA/Medicare/Medicaid? I keep hearing it's crazy high, but I'm curious to know an actual number.

Going by memory but for myself and wife 12 years ago it was over $2,500 per month. After 2 years it was up to almost $3,000 a month but then she became eligible for Medicare which saved us a lot, dropping down to under $2,000 for me and her supplemental. 4 years later and just prior to me reaching 65 it had increased back to $2,500. This wasn't even great insurance we had a lot of copay. And keep in mind it took over $3,200 gross to end up with $2,500 net so med insurance with a few deductibles cost me over $40,000 per year.

quote:

Originally posted by 92fstech:
Anybody have an idea of what heath insurance costs actually look like when not subsidized by an employer/VA/Medicare/Medicaid? I keep hearing it's crazy high, but I'm curious to know an actual number.

No idea what they are now but you can go on healthcare.gov to get a general idea. I was paying about $500 - 600/mo for single coverage back when I was in between retired and medicare kicking in but that was a few years ago and this was close to a catastrophic coverage policy.

quote:

Originally posted by 92fstech:
Anybody have an idea of what heath insurance costs actually look like when not subsidized by an employer/VA/Medicare/Medicaid? I keep hearing it's crazy high, but I'm curious to know an actual number.

We pay $257 per person per month for Christian Healthcare Ministries. It isn't exactly insurance but sort of. We pay providers and then submit for reimbursement. Deductible is $1k per event, so it is a large expense kind of coverage, not pay-for-everything insurance. A broken arm will cost me $1000, a heart-lung transplant will cost me $1000.

It does not cover pre-existing conditions for the first 2 years if you have had any symptoms or treatments in the last 3 years. Thus if you have significant pre-existing conditions it may not be the right choice. e.g. you have ongoing cardiac issues or have a hip replacement last year that goes bad and needs to be redone.

quote:

Originally posted by 92fstech:
Anybody have an idea of what heath insurance costs actually look like when not subsidized by an employer/VA/Medicare/Medicaid? I keep hearing it's crazy high, but I'm curious to know an actual number.

It varies from state to state, and also takes into account other factors, including age, tobacco use, etc.

In addition, there are subsidies available for those who make under certain income thresholds, which can help offset some of the monthly cost.

To get an estimate for your specific circumstances, go to www.HealthCare.gov

Click on Get Coverage, then Preview Health Plans and Prices. Put in your location and some basic parameters like age and income, and you can get estimates for coverage in your state.

For example, for me it ranges anywhere from ~$250/month for high deductible and low coverage to ~$800/month for low deductible and excellent coverage.