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Trusted Social Butterfly

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

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Message 41 of 150

"....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.


Just think. The world was built by the lowest bidder.
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Frequent Social Butterfly

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

2,849 Views
Message 42 of 150

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
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Treasured Social Butterfly

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

2,863 Views
Message 43 of 150
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.


Registered on Online Community since 2007!
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Trusted Social Butterfly

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

2,797 Views
Message 44 of 150

".....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.

 

 


Just think. The world was built by the lowest bidder.
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Bronze Conversationalist

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

5,141 Views
Message 45 of 150

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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Silver Conversationalist

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

5,280 Views
Message 46 of 150

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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Info Seeker

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

5,366 Views
Message 47 of 150

Two millions.

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Info Seeker

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

5,727 Views
Message 48 of 150
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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Super Social Butterfly

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

5,689 Views
Message 49 of 150

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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Info Seeker

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

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Message 50 of 150
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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