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Treasured Social Butterfly
Posts: 19,390
Registered: ‎12-25-2011

Re: How much do you need for a comfortable retirement?

Message 31 of 141 (1,990 Views)

I am very fortunate to have had a very financially savvy parent, who made sure she passed on that feeling of self-responsibility, not to mention taking care of her own affairs!

 

Unlike the many people who spend money they don't have, or don't even think when they spend money, I find it difficult to spend more money than I need to, even though I have enough for myself & a legacy to leave behind.


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Trusted Social Butterfly
Posts: 7,020
Registered: ‎02-14-2008

Re: How much do you need for a comfortable retirement?

[ Edited ]
Message 32 of 141 (1,917 Views)

"....1. They need a method to continuously evaluate their financial situation way before and throughout retirement, which takes into account inflation, esp. medical inflation, and replacement / repair of major capital items like cars, roofs, air conditioning units, etc.

2. They need to be very fearless about cost-cutting, delaying retirement, or figuring out ways to earn more money years in advance if the future prospects don't look good... hiding one's head in the sand is a recipe for disaster, which will end in running out of money, dying in destitution, in a Medicaid bed....".

 

   Yes. And even though we use a spreadsheet, this can be done with pencil and paper and an hour or two a month. The 'method' is to track everything you are doing now and extrapolate, as best you can with those 'capital items'.  I'm not big on using software for this as it often doesn't correlate to your own, personal, set of financial circumstances. This all requires good old-fashioned thought, a small amount of work, and grade school arithmetic.  It seems like too many people think you need advanced calculus to work this stuff out.


“The world is a book. Those who do not travel read only one page.”
Frequent Social Butterfly
Posts: 227
Registered: ‎05-28-2011

Re: How much do you need for a comfortable retirement?

[ Edited ]
Message 33 of 141 (1,821 Views)

I think what people really need is a couple of things. It's not just a Dollar amount. Yes, Dollars is how the machine runs, but if you only had Dollars and not the items below, it still might not work.

 

1. They need a method to continuously evaluate their financial situation way before and throughout retirement, which takes into account inflation, esp. medical inflation, and replacement / repair of major capital items like cars, roofs, air conditioning units, etc.

2. They need to be very fearless about cost-cutting, delaying retirement, or figuring out ways to earn more money years in advance if the future prospects don't look good... hiding one's head in the sand is a recipe for disaster, which will end in running out of money, dying in destitution, in a Medicaid bed

 

There are any number of retirement planning tools, including at AARP.org which satisfy item 1.

 

Item 2. is more of a mentality thing. I am at a loss at how to make human beings wake up and smell the coffee, either individually or collectively as a Nation, and be proactive. People have a "waiting to be fed" mentality, it frustrates me to no end. This year I had a huge set-back as many of you know, I lost access to an excellent corporate pension plan, so re-did my plan on my birthday, and I pushed-back retirement two years from 63 to 65. Am I happy about that? No. But since I have 11 years left, it should work out fine, and  I will have forgotten about it on the day I retire.

 

I had been begging and pleading with my Dad for years to wake up and smell his retirement coffee, but he never did. Yes, and now he's set to be dying in a Medicare bed. It's a nightmare scenario that was literally a quarter-century in the making, and I watched it unfold, powerless to intervene. I tried. He is still alive, quite ill, but he financially died the death of 1000 cuts, and probably 750 of those cuts were avoidable.


Sincerely,
Peter
Treasured Social Butterfly
Posts: 19,390
Registered: ‎12-25-2011

Re: How much do you need for a comfortable retirement?

Message 34 of 141 (1,835 Views)
ry6147 wrote:
Seems like everyone is prozeletizing on issues far removed from the question at hand, so I'll be more direct:

 ..

Now these are conservative numbers based on (1) assumed average RoR of 5% and (2) an endowed life expecatncy to age 95. Most of us won't make that, so the kids or a charity will get the balance.

 

Hope that helps. 


There isn't an single "right answer", but the bigger point is to think about & discuss the issue, so we can individually prepare what's best for ourselves & families.


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Trusted Social Butterfly
Posts: 7,020
Registered: ‎02-14-2008

Re: How much do you need for a comfortable retirement?

[ Edited ]
Message 35 of 141 (1,769 Views)

".....Rule of thumb: for a $100,000/year cost of retirement at age 65 in 2015 numbers, a $2,000,000 portfolio will do the trick, inflation included at 3%/yr. Clearly, to offest for SSA income, subtract that income from the $100,000 bogie and reduce the portfolio value proportionately.........".

 

   I always cringe on any 'rule of thumb' postings because everyone's financial picture is so different.

 

  DW and I retired, on investments only, at 55 and 53. Before we actually quit our jobs, we tracked expenses almost two years, to the penny, and put on a spreadsheet. We factored in, as best we could, expenses such as auto repairs/new car purchase, home maintenance (such as new roof), travel, and other expenses that relate to our lifestyle and projected lifestyle.

 

   The very difficult part is to project income from investments. I was very conservative in that, at least, what I thought was conservative.

 

   Now, no one will get this 100%, but the point is, one needs to go through the exercise and not guess or simply take rule-of-thumb. This is time and some work. Too many people just 'guestimate' and don't base their guess on real numbers.

 

 


“The world is a book. Those who do not travel read only one page.”
Bronze Conversationalist
Posts: 16
Registered: ‎04-22-2014

Re: How much do you need for a comfortable retirement?

[ Edited ]
Message 36 of 141 (4,112 Views)

Seems like everyone is prozeletizing on issues far removed from the question at hand, so I'll be more direct:

 

Rule of thumb: for a $100,000/year cost of retirement at age 65 in 2015 numbers, a $2,000,000 portfolio will do the trick, inflation included at 3%/yr. Clearly, to offest for SSA income, subtract that income from the $100,000 bogie and reduce the portfolio value proportionately. E.g. if you have SSA of $25,000, you need to finance only $75,000 per year, or 75% of the base case. Therefore, the required portfolio will drop to $1,500,000. An actual pension, however rare these days, would be treated the same way.

 

Now these are conservative numbers based on (1) assumed average RoR of 5% and (2) an endowed life expecatncy to age 95. Most of us won't make that, so the kids or a charity will get the balance.

 

Hope that helps.

 

 

Silver Conversationalist
Posts: 41
Registered: ‎12-17-2011

Re: How much do you need for a comfortable retirement?

[ Edited ]
Message 37 of 141 (4,265 Views)

If you follow my Income for Life Formula, that $2,000,000 will get you $80,000 to $120,000 per year depending on the withdrawal rate you use (4% to 6%).

Info Seeker
Posts: 1
Registered: ‎06-23-2009

Re: How much do you need for a comfortable retirement?

Message 38 of 141 (4,266 Views)

Two millions.

Info Seeker
Posts: 1
Registered: ‎09-18-2014

Re: How much do you need for a comfortable retirement?

Message 39 of 141 (4,627 Views)
I recently had a prescription for Celebrex (anti-inflammatory) cost for generic, 1 per day, for 90 days was quoted @$630. I'm trying over the counter(OTC). Who could expect that kind of cost?
Super Social Butterfly
Posts: 581
Registered: ‎07-23-2010

Re: RE: How much do you need for a comfortable retirement?

Message 40 of 141 (4,670 Views)

Me and the little woman are fine with SS and my pension.  With the decrease in expenses and taxes due to retirement, we have more than we ever did.