When I was getting close to retiring, I decided that in order to see how much money I needed to live, I would invest everything I made and live only off Mrs. Flash's salary.

Did that for 3 years and lived fine, so that told me a minimum amount of monthly income that I needed. Then I multiplied by 2 and that told me how much I wanted to stick away.

When I had that much, I retired.

it's not that difficult to calculate. Just develop and honest listing of all of your expenditures, now and through the years. Then add something for inflation. Your guess is as good as mine what that will be, but be sure there will be inflation. 3% - 5% seems like a good starting point. Project this out for each year out to age 85. Then do the same for income. SS, pension, IRA distributions or other. Give yourself 1.5% SS COLA each year. The SS people use a goofy way of calculating inflation and it's never close to actual numbers and its usually barely enough to cover increased costs for Medicare. If at 85, you are still running positive then you should be good to go, provided you have cash in savings to cover unexpected events. $200,000 seems like a minimum to me.

The one thing that could work in your favor is your ability to reduce discretionary expenditures. Do you really need 1000 channels on TV? Do you really need to eat out 3x week? etc. A lot of things that seem to important today, wane in importance as the years go by. I will add, retirement is wonderful. Many of my friends told me I'd be bored and have nothing to do with my time. In reality, I have a hard time fitting things in and I'm certainly not bored.

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Would $250K, $500K, $750K be enough ??? Just wanted to see what people thoughts are and would answer with.

Don't think you can pen in an actual amount.
The devil is in the details.
If you are doing projections you just can't list the income but you need to include the outgo too.
I say save as much as you can, invest as much as you can, spend as little a possible, make as much as you can ~ all in context of course.
Good Luck

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Originally posted by 229DAK:

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if you retired at 62 years old with an average [SS] check of $2300 or at 65 years with an average check of $2800

Do these two amounts account for federal taxes (and in some cases, state taxes) and, at 65 y/o, for Medicare payments?

Actually I do not know. I just got these figures from this website. God Bless !!!
https://www.ssa.gov/oact/cola/examplemax.html

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Originally posted by VBVAGUY:

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Originally posted by 229DAK:

quote:

if you retired at 62 years old with an average [SS] check of $2300 or at 65 years with an average check of $2800

Do these two amounts account for federal taxes (and in some cases, state taxes) and, at 65 y/o, for Medicare payments?

Actually I do not know. I just got these figures from this website. God Bless !!!
https://www.ssa.gov/oact/cola/examplemax.html

That's a good source. Know that SS has this pegged to a projected life expectancy and no matter when you retire if you die at their projected age it's the same amount of of cash you'll receive (or close) no matter when you start taking disbursements. Die early and you're screwed out of funds, die late and you beat the system. Die at the age they think you will, the amount you receive is the same with any age retirement.

It depends on what you're willing to do to stay retired.

First, here's a rough method.

Calculate your annual expenses. Calculate your annual pension income and social security. If your annual expenses is greater than your annual pension and social security, this is the cash flow that has to be spun from your retirement savings.

Divide this difference by 4%; that's how much savings you need. Divide the same difference by 3% and 5%. The 3% will give you a larger number needed and will give you a more conservative number. The 5% will give you a smaller amount to save and is more aggressive.

You can also lower your expenses to lower the amount of savings you need. Eating spam as one person wrote is one way and gives you the gist of what you can do to lower your expenses. Other ways is to move to a lower cost of living state with lower taxes. Others even move to a lower cost of living country and be ex-pats. There are a lot of expats living in low-cost countries such as Vietnam, Thailand, Philippines, etc. You can go on YouTube and search for countries to retire to.

I think a bunch posted after I post is what i posted??

One more thing that is important is that the first third of your retirement years will be the most expensive. The second less so and third most likely you will need far less $. Does not always work that way. But usually does.

Way too many people upon retiring do exactly what has been already mentioned.

One absolute truth, no matter what, is that you must have a good chunk of money set aside for emergencies, and even for unplanned expenses that are not exactly emergencies.

If you have no emergency funds set aside and need to draw out additional money from your investments, well you're just screwing you future.

If you can set aside a couple hundred grand for emergencies, unexpected large expenses, and fun money too, you'll be golden.

I asked this same question to a retired man whom I respected. He replied to live modestly, no debt, have extra funds set aside, and to just go enjoy life.

As to a monthly budget, and this was 30 years ago, he told me wanted to have, after all normal costs were paid for the month, he typically spent $100 bucks a day on whatever he wanted, lived life, traveled, did what he wanted when he wanted. His average monthly expenditures, including basic and fixed expenses, and his $100 a day personal fun money, was $4,400.

I thought that sounded like a pretty darn good way to go.
.

That would be ideal. But for much of the American population I do not think that is necessary. Now if in a higher tax bracket, sure. But for many have lived and will continue to live a pretty modest, mostly debt free lifestyle can retire with far less, imho.

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Originally posted by old rugged cross:
I think a bunch posted after I post is what i posted??

One more thing that is important is that the first third of your retirement years will be the most expensive. The second less so and third most likely you will need far less $. Does not always work that way. But usually does.

Can you please explain why as I would have thought the last third would be more expensive. Thank you and God Bless !!!

Because when you first retire you are younger. Eager to do all the things you thought you always wanted to do in retirement. The middle section iS to just spend time doing the things you enjoy the most. The last third you have done most of the expensive aspects of retirement. Traveled, purchased expensive items, did remodels, etc. So it is just more to enjoy the more simple things and to get to the finish line.

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