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

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Message 31 of 167

To help you figure out how much you need in retirement, I'd like to recommend the T. Rowe Price Planning Calculators. Select the calculator for the time frame you are at toward your retirement. Starting to plan, saving already, approching retirement, or in retirement. You can save your input to provide updates if you register.  I've never received follow up phone calls asking to open an account or hound me about letting them manage my money.  If you have an account with Fidelity, they have my favorite calulator. I like the Fidelity calculator better because it let's you get down to the nitty-gritty on your retirement expenses and income details.

 

https://www3.troweprice.com/usis/personal-investing/retirement/retirement-planning.html

 

Open an account at www.ssa.gov to retrieve your SSA statements. You need to look at them at least every 3 years to make sure all of your income has been reported to SSA by the IRS. I've had 2 ocassions where my income wasn't reported.  After 3 years it becomes more bothersome and difficult to get your SSA file updated. My years were 1981 and 2016. That 2016 income number was very important. Your statement also includes the total amount you and your employers have paid into SSA for SS and Medicare taxes. The SSA site also allows you to download the same program they use to compute your benefits. You can take your annual incomes from your SSA statement and plug them into the program and it will show you the amount of taxes you paid each working year and an accurate benefit amount for your retirement date.  The program isn't very user friendly at best so prepare to be a bit fustrated by it.

 

For those discussing SS return on investment, I ran an analysis on my SS taxes as if they had earned interest at the Special Treasury Bond rates over the years, which is typically higher than bank interest rates.  For example, the current special bond rate is 2.25% which is way higher than banks are paying.  Starting at age 66, it would take me 10 years to recover all of my taxes plus that implied interest, and another 10 years to recover my employers contributions.  If I wait until 70 to start, it only takes me 8 years to get all of my taxes plus implied interest back.  The total amount paid back in that 8-10 year period is just over double of what was kept from my checks.  So even if you consider that you received interest on your taxes, you have it all back in the first 8-10 years.  After that, you're receiving benefits from money paid in by your employer and someone else.  If you ignore the implied interest, you have all of your tax money back in 4-5 years or less.  And that is the reason they may make you pay taxes on part of your SS benefits because everything received after the 4th or 5th year has never had income taxes paid on it.  As an aside, the reason the amount of SS taxes paid only doubled over the 46 years is because the early tax amounts are so much smaller than the later amounts.  Tax rates and income were lower in the 70's and 80's than now.

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

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Message 32 of 167

@kleino - Thought I'd play with that link .. until they wanted contact information from me! Last thing I want is some financial advisor pestering me, just because I was curious about their calculations!


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

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Message 33 of 167

I know this is an old post but maybe others will also see it.  Coincidentally, I came across an easy tool this morning that gave me a number which coincided with my own calculations http://retirementincome.net/v2

If you want to leave assets to heirs, you will need a lot more.  If you are willing to consume principal, there will hopefully be a spike in interest rates in the next few years and that's when I will jump on immediate annuities = income for life.

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

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Message 34 of 167

How much do you need is an insufficient question when discussing longevity and quality of life. Yes finances are important but the question is also what do you need?  I actually like to have my clients answer who do you wish to be with, what do you need/want, where would be the most comfortable, why are these things accurate ( what is improtant to you.) As a therapist, I have each person make up a personal quality of life list that can be refered to , modified and used as a master plan to live life in a manner consistant with the individuals preferences, needs, likes and dislikes. For example, this quality oif life guide contais things such as :

sensory preferences ;tastes, colors, sound level and types, touch ( fabrics, temperature, people) 

sleep preferences; schedule, postion, pillow, blanket, matress type, room temp, 

people preferences and social preferences, 

clothing preferences

The list is extensive ...spritual, creative, work, meaning, book communication

No only does a person gain insight, a sense of self efficacy, and a map, should a person become dependent on others, the caregivers are not left to guess but can use the guide to provide the person with a quality of life that still gives pleasure, sometimes joy. 

 

I have used this guide to help restore an individuals willl to live, to decrease agitation and depression, and to relieve the caregiver. Even in situations where the individual has memory loss, the quality of life factors are often intrinsic and rather than focusing on who and what a person remembers, we can provide elements of the individuals quality of life factors and create moments of pleasure and peace.

From a presentation given at the Oregon Geriatrics Association Conference 2013

Margo Traines MA OT/L Life Care Planner

 

 

 

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

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Message 35 of 167

@ASTRAEA wrote:
@retiredtraveler wrote:

 

   No semantics won't change anything. Facts will. The average American gains about 25%-33%  in benefits over what is paid in. That is an entitlement. I'm on medicare, and happy to be so. But I'm perfectly aware that the odds are that I will be getting an entitlement, or welfare, if you like.


That's not really accurate, if you factor in the interest you would have earned, had you saved the amount paid in to SS all those years. In the years when we had high interest rates, it didn't take that long for savings to double in value .. so money that was paid in when I started working back in 1973, should have gained a lot more than 25 - 33% by now!

 

"The Rule of 72"


Not sure that is the case with Social. Security because of the following reasons:

1.  Because of how it was 1st set up, it has always been a pay as you go system - IOW, current contributions pay for current beneficiaries.  If there are current contributions left over, they are placed in Special Treasury Notes and then redeemed as necessary to pay benefits.

2.  Interest from these Special Treasuries also goes into paying benefits or again placed in those special securities.  Here are the rates paid through the years.

 

https://www.ssa.gov/OACT/progdata/interestrates1937-99.html

 

https://www.ssa.gov/OACT/progdata/newIssueRates.html

 

3.  I am sure that those of us who have all of our records through our working years could figure it out.  But we also have to keep in mind that only the employee part of the contribution is actually shown on our records.  The employer part of the contribution is really not credited to individual employee, rather to the overall program.

 

4.  The SS benefit is actually figured on your SS income, the income to which contributions were assessed during the working years, and only by math is this a measure of the contributions.

 

Social Security is not a savings program.  In fact, specifically our parents got out way more than they paid in depending upon their longevity.

 

So, I agree with retiredtraveler in the point made and not just for that reason but because the legal (government) defition of the term "entitlement" means a benefit that is set down by law.

* * * * * * It’s Always Something - Roseanne Rosannadanna
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Re: How much do you need for a comfortable retirement?

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Message 36 of 167
@retiredtraveler wrote:

 

   No semantics won't change anything. Facts will. The average American gains about 25%-33%  in benefits over what is paid in. That is an entitlement. I'm on medicare, and happy to be so. But I'm perfectly aware that the odds are that I will be getting an entitlement, or welfare, if you like.


That's not really accurate, if you factor in the interest you would have earned, had you saved the amount paid in to SS all those years. In the years when we had high interest rates, it didn't take that long for savings to double in value .. so money that was paid in when I started working back in 1973, should have gained a lot more than 25 - 33% by now!

 

"The Rule of 72"


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

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Message 37 of 167

Please stop referring to Soc. Sec. and Medicare as "entitlements".  These are things we have paid in to all our working lives.  Semantics will not change the FACT that we are owed our payments.

 

   No semantics won't change anything. Facts will. The average American gains about 25%-33%  in benefits over what is paid in. That is an entitlement. I'm on medicare, and happy to be so. But I'm perfectly aware that the odds are that I will be getting an entitlement, or welfare, if you like.


"...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 38 of 167

Please stop referring to Soc. Sec. and Medicare as "entitlements".  These are things we have paid in to all our working lives.  Semantics will not change the FACT that we are owed our payments.  Why not address the real problem--that the representatives of our country changed the rules in the middle of the game by using the money we paid in for all the other things they wanted.  Such as huge raises for themselves and their own free health care.  

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

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Message 39 of 167

1 think about $255,00 might be enough since i am 74 now.

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

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Message 40 of 167

Enough to self insure for you and your spouse.

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