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Conversationalist

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

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Message 1 of 150

All my wife and I need for a comfortable retirement is enough income to cover our normal living expenses.  I didn't get around to retiring until I was 68 and my wife was 66 and eligible for the full Social Security spousal benefit.  As a result, Social Security provides 87% of our normal living expenses but only 66% once you include Federal and State income taxes in our normal living expenses.

 

RMD withdrawals from my IRA account were to be used for an extravagance, new car, major home improvements, or unexpected medical expenses.  What wasn't anticipated when I retired was my IRA more than doubling in value after I retired resulting in my RMD more than doubling as well.  So far, we haven't been able to shed the frugal habits we learned raising three children and putting them through college.  The RMD withdrawals have been moved to a taxable account and invested to ensure that we have assets that can be sold to cover the expenses that we might incur in our nineties.

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Silver Conversationalist

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

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Message 2 of 150

Epster wrote:

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"


Thank you @ASTRAEA, I was just about to make that point.

 

 


Actually, @retiredtraveler was a bit low on how much more the average person gets back from SS over what they paid in taxes.  Since the taxes were invested in special Treasury bonds and the rates are known, I took a look at those invested earnings.  It hasn't grown near as much as you would think.  Those early taxes were lower than now and your wages were a lot lower too.  The later year taxes haven't had much time to be invested and grow.  For example, my 1973 SS tax for the year was $173.  That year's tax invested in the special T-bonds for the last 45 years is worth $1980 today.  My total taxes paid since 1970 is $155,330 (from my SS statement, page 3) and when invested in the T-bonds, it's worth $343,141, barely over double.  At age 66, when I start SS, it will take me just 5 years to recover the same as I paid and in 10 years I will recover my taxes plus the interest earned in bonds.  At twenty years, I'll have back mine, my employers, and all bond earned interest back, which is 75% more than I personally paid in, or 50% more than my taxes with earnings.  Those are the longest time frames.  Average and lower earner full recovery of all taxes and earnings of employee and employer at full retirement age (FRA) are shorter, from 6-12 years.  People who start before their FRA will take longer but still receive quite a bit more than they paid.  The only way to not make out is to die early.

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Silver Conversationalist

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

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Message 3 of 150

ASTRAEA wrote:

@sggbrown - Are you sure you've got that calculation right? At 71 the IRA RMD divisor is 26.5, so you'd need to have about $2.38 million in an IRA, to have a $90K RMD. If your IRA is the $1.6 million you mention, the RMD at 71 would be just over $60,377.


I took a quick look at it and agree that @sggbrown used the wrong numbers.  I believe he/she used the wrong RMD table.  The Uniform Life Expectancy table is the correct one with the 26.5 divisor.  I believe what @sggbrown used was the Single Life Expectancy table which is used for inherited IRA's.  The age 71 factor for that table is 16.3 which would be $98K.  He needs to be looking at IRS Publication 590-B, Appendix B, Table III Uniform Life Expectancy.

https://www.irs.gov/publications/p590b#en_US_2016_publink1000231236

 

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Treasured Social Butterfly

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

1,653 Views
Message 4 of 150

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"


Thank you @ASTRAEA, I was just about to make that point.

 

 

"The key to success is to keep growing in all areas of life - mental, emotional, spiritual, as well as physical." Julius Erving
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Treasured Social Butterfly

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

1,672 Views
Message 5 of 150

@sggbrown - Are you sure you've got that calculation right? At 71 the IRA RMD divisor is 26.5, so you'd need to have about $2.38 million in an IRA, to have a $90K RMD. If your IRA is the $1.6 million you mention, the RMD at 71 would be just over $60,377.


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Info Seeker

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

1,799 Views
Message 6 of 150

I will retire in April 2018.  I figure i can maintain my lifestyle pretty comfortably on $68K a year - maybe less, that's pretty still including vacations, helping the kids, etc.  the 2 big 'annoyances' in retirement for me are - my Social Security will be taxable because of the amount of spend down i am taking from my investements and the fact that because i DID manage to save a good amount for retirement ($1.6 million before taxes) I will never be in a lower tax bracket - my min distribution will run about $90K annually at age 70 1/2 - so, hey, might as well take it the tax hits now and enjoy!

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Conversationalist

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

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Message 7 of 150

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 8 of 150
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 9 of 150

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

12,099 Views
Message 10 of 150

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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