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Conversationalist

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

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Message 1 of 144

I feel that retirement is not all it's cracked up to be. In my opinion, I strongly feel it depends on the wages earned by an individual. I've been retired for 4 years now and unable to find a part-time job that can utitilize my skills (I'm an expert typist). In this society being 71 years young, no college degree (only certificates) has its disadvantages. I'm a baby-boomer and I depend on my social security, though the present administration would like to kill it (among other things). My mortgage is killing me and my daughter (a breast cancer survivor) but we have to maintain it to keep a roof over our head and not become homeless.

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Info Seeker

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

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Message 2 of 144
After 6 months of being retired, for sure my health has improved greatly. As I like to say "living the dream".
I also manage my investments and have avoided annuities.
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Info Seeker

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

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Message 3 of 144

I live on the coast in S GA...low cost of living, and good health care is readily available. Granted, I have not retired yet, but the lower cost of living affords me great options.

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Info Seeker

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

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Message 4 of 144

I need about $42,000 per year. My home is paid for, I owe nothing except the monthly

bills & credit card payment. I have been retired for 17 years. Bought a new motorhome

when I retired and spent 13 wonderful years traveling to every state, a lot of Canada

and all over Alaska, some 120,000 miles. Due to  a lot of luck, and research, in finance

and the stock market, I still have the funds I retired with. We pretty much stay close to home

now due to my wife's health.  Life is still good.

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Conversationalist

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

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Message 5 of 144

I think it depends on the individual's financial situation. As for myself, I have a mortgage & it's taking a toll. While I was working, it was more manageable than it is now. I'm doing a lot of sacrificing just to keep the roof over my head.

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Info Seeker

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

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Message 6 of 144

I retired in 2007. My pension was about 45% of my take home pay the last year I worked. I occasionally get cost of living adjustments to my pension.I had a 401K value of $260,000, which is disbursed monthly according to what it's worth at the end of the year and according to life expectancy tables. The principle has never been touched because of that. My job paid for half my health care premiums when I retired. I sold my house when I retired and bought a smaller one in 2010 and my mortgage payment is less than rent--$616 a month. I get Social Security, which turned out to be about $500 more a month than the annual SS summary told me I would get. Don't know why. I travel and do pretty much whatever I want.Instead of trying to maintain an expensive lifestyle I live simply. Financial advisors have an interest in getting people to stay working and use their services to keep amassing money they don't really need because the financial advisors get paid for managing money. I do my own managing and it has worked out quite well. Retire as soon as you can--your health will improve greatly.

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Recognized Social Butterfly

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

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Message 7 of 144

I need $2 million if I want to stay in this high cost of living area. That's to achieve 80% of my pre-retirement income. And I'm only 50 and won't retire for another 20 years.  I never used to be wed to an area, but the older I get, the less I want to move.  

 

My safety net is to move to the eastern shore, where it's a lot cheaper. But I also figure I need access to good medical care. Which I'm not sure it has....

 

 

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Bronze Conversationalist

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

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Message 8 of 144

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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Treasured Social Butterfly

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

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Message 9 of 144

@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!


Registered on Online Community since 2007!
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Bronze Conversationalist

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

16,492 Views
Message 10 of 144

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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