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

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Message 61 of 167

".....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.

 

 


"...Why is everyone a victim? Take personal responsibility for your life..."
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Re: How much do you need for a comfortable retirement?

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Message 62 of 167

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.

 

 

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

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Message 63 of 167

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%).

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

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Message 64 of 167

Two millions.

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

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Message 65 of 167
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?
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Re: RE: How much do you need for a comfortable retirement?

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Message 66 of 167

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.

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

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Message 67 of 167
Without significantly down-sizing, an individual should have accumulated at least 20 times his/her annual salary and pray that he/she can find an honest financial planner to preserve those funds. If there was a non-salaried spouse (i.e., only one income during a couple's working years), 25-30 times is probably a better estimate). These parameters are based on my first 6 years of retirement and project that Congress will eventually reach decisions that will protect Social Security and Medicare. I am extremely concerned that my daughter and son-in-law will not have these benefits when they retire; and as for my grandsons, I have read that their generation will be in more trouble than their parents who are not expected to be as well-off as our generation. What happened to the USA?
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Re: How much do you need for a comfortable retirement?

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Message 68 of 167

As someone who is now 84, we have found that what we think we needed at 65 and what we actually need are entirely diffierent issues. I had a joint annuity with my late wife and am now married to a long time friend of ours who cannot benefit from this. This is a serious concern for the future.

 

Also, the current economic and wage stagnation and inequality has forced us into providing support to our grandchildren which was not true during my working years.  

 

When I moved into a condo 23 years ago my late wife and I did remodeling and major repairs which I assumed would outlast us.  My current wife and I have been forced recently into redoing and replacing many of these--new air conditioning and heating units, carpeting, painting, new kitchen and appliances, bathroom, etc.  In addition we have purchased three new cars since I retired.

 

Our out-of-pocket medical expenses are not much but Medicare premiums, supplemntal coverage, and co-payments take a huge bite out of our income.

 

It is a mistake to assume that you can live more cheaply after retiring than before.  You strill have many of the same expenses and they increase with inflation and rising costs.

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

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Message 69 of 167
@retiredtraveler wrote:

".....Retirement is easier & you need less income, if you've already paid off your mortgage & have no other outstanding debts....".

 

   It should be, but we've traded off due to travel.  Of course, it's not a necessary but what we're splurging on.


Hey, that's better than having to spend more money on medical expenses, and as you said it's your CHOICE!


Registered on Online Community since 2007!
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Re: How much do you need for a comfortable retirement?

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Message 70 of 167

".....Retirement is easier & you need less income, if you've already paid off your mortgage & have no other outstanding debts....".

 

   It should be, but we've traded off due to travel.  Of course, it's not a necessary but what we're splurging on.


"...Why is everyone a victim? Take personal responsibility for your life..."
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