Retirement Targets

[ClonerJams]

I hate everything about this article, but its interesting nonetheless.

Do we really need $1M in retirement savings? Not even close, one top economist says

A prominent economist argues that you can retire on savings much less than $1 million.

www.yahoo.com

 

[jsb]

I hate everything about this article, but its interesting nonetheless.

Do we really need $1M in retirement savings? Not even close, one top economist says

A prominent economist argues that you can retire on savings much less than $1 million.

www.yahoo.com

I just skimmed the article, so I don't have a huge opinion on it. But I do think sometimes what everyone says people should save for retirement is a bit ambitious and probably causes people to not do anything because 'why bother?'.

I have almost exactly what online calculators say I should have at my age. But I'm not a 401k millionaire at age 45. And that's probably OK.

 

[BCClone]

Yeah a trust is no different if you don't have someone impartial and without as much vested interest as the trustee. Families can change and individuals can change over time. We haven't seen anything as extreme as guns pulled, but verbal fights and conflict dragging stuff out.

How much does the trustee get paid? Are they a percentage like an executor?

 

[BCClone]

Something like 90% of the time, when people pass on HUGE amounts of money, it's gone by the 3rd generation.

What is considered huge?

 

[TitanClone]

It's so hard not to jump on the NVDA assent. What an amazing story

Motley Fool was all over NVDA a few years ago when it was trading in the $20s. Definitely helped a lot of folks retirement

 

[BCClone]

I just skimmed the article, so I don't have a huge opinion on it. But I do think sometimes what everyone says people should save for retirement is a bit ambitious and probably causes people to not do anything because 'why bother?'.

I have almost exactly what online calculators say I should have at my age. But I'm not a 401k millionaire at age 45. And that's probably OK.

I think a lot comes down to your retirement age. People who say 80% of your income of pushing investments. You are supposed to put 15% in 401ks while you are working. That takes you down to 85%. State of Iowa does not tax retirement income so now you are at 80% already. At 65 you have Medicare so you cut some there. You generally don’t need professional/work related expenses like the clothes, education/continuing Ed, meals, transportation, etc. Most professionals should have their house paid for so upkeep should be less than a mortgage. No kids expense I’d hope unless you started really late (that is huge).

If you start knifing out areas you will not be spending money on, you can probably be in that 50% area and anything over is just extra travel or entertainment type expense.

 

[KnappShack]

I think a lot comes down to your retirement age. People who say 80% of your income of pushing investments. You are supposed to put 15% in 401ks while you are working. That takes you down to 85%. State of Iowa does not tax retirement income so now you are at 80% already. At 65 you have Medicare so you cut some there. You generally don’t need professional/work related expenses like the clothes, education/continuing Ed, meals, transportation, etc. Most professionals should have their house paid for so upkeep should be less than a mortgage. No kids expense I’d hope unless you started really late (that is huge).

If you start knifing out areas you will not be spending money on, you can probably be in that 50% area and anything over is just extra travel or entertainment type expense.

KnappShack started really late.

But I guess that means I can volunteer at the high school.

 

[cyclonemagic]

I hate everything about this article, but its interesting nonetheless.

Do we really need $1M in retirement savings? Not even close, one top economist says

A prominent economist argues that you can retire on savings much less than $1 million.

www.yahoo.com

The article is general and does not provide a lot of context. My Dad used to say that everyone finds the means to retire despite their lifestyle, income, or savings. My wife and I know several people (couples) who retired in the past few years with less than $1 million saved for retirement. They state that the financial aspects of retirement have been better than expected, meaning that they are not spending as much as they thought they would. While some of their financial situations are different, the common characteristic I see in those retirees is that they are frugal with their money, generally healthy (given their age), have no debt (house paid off), have inexpensive hobbies (pickleball, biking, fishing, sewing/quilting, spending time with grandkids, etc.). Some have downsized homes or moved to lower-cost-of-living areas. Their biggest concerns are inflation and rising healthcare costs. Those factors could make having less than $1 million more of a concern over the long run. A savings cushion would be useful for a long retirement.

The retirement industry portrays retirement as living in fancy retirement communities, going on cruises, traveling the world, and relaxing on a beach in some exotic locale. That makes retirement more expensive. I doubt most people retire that way.

 

[DSMCy]

I hate everything about this article, but its interesting nonetheless.

Do we really need $1M in retirement savings? Not even close, one top economist says

A prominent economist argues that you can retire on savings much less than $1 million.

www.yahoo.com

I skimmed the article so maybe I missed it but looking at current retirees, of course they didn’t have much in retirement savings.
Majority of them likely have a nice pension and can rely on SS.
A pension paying $40k per year is likely worth around $1M.

 

[qwerty]

What is considered huge?

8" . . . . . . of gold coins, that is.

 

[Cyclones_R_GR8]

I think a lot comes down to your retirement age. People who say 80% of your income of pushing investments. You are supposed to put 15% in 401ks while you are working. That takes you down to 85%. State of Iowa does not tax retirement income so now you are at 80% already. At 65 you have Medicare so you cut some there. You generally don’t need professional/work related expenses like the clothes, education/continuing Ed, meals, transportation, etc. Most professionals should have their house paid for so upkeep should be less than a mortgage. No kids expense I’d hope unless you started really late (that is huge).

If you start knifing out areas you will not be spending money on, you can probably be in that 50% area and anything over is just extra travel or entertainment type expense.

4 years ago I started living on what my SS would be and using my savings to pay stuff like Property taxes and insurance. 2 years ago I started doing the same thing but also paying the taxes and insurance without using savings which I have been able to do with changing my standard of living.
The only difference will be that I plan on selling my home and with home prices the way they are I'll most likely have a mortgage again
Hopefully I'll be able to make a nice enough down payment so the principal will be about what I had back when I was only making $45k

 

[1SEIACLONE]

What we have found in retirement is the amount that you have set aside in investments and savings is also still drawing interest. So if you have a million dollars in those investments and are drawing out 4%, you are not at $950K after a year more like $990K because its still bringing in 4 or 5% after taxes.
We currently are taking out 4 grand a month from our retirement accounts, the way it is structured we have been doing this for over a year, at our current pace the account will never be empty. Every year it brings in what we are taking out, the principle has dropped very little with the up and down in the market.

 

[BCClone]

4 years ago I started living on what my SS would be and using my savings to pay stuff like Property taxes and insurance. 2 years ago I started doing the same thing but also paying the taxes and insurance without using savings which I have been able to do with changing my standard of living.
The only difference will be that I plan on selling my home and with home prices the way they are I'll most likely have a mortgage again
Hopefully I'll be able to make a nice enough down payment so the principal will be about what I had back when I was only making $45k

You’ve cut it hard then. Then again I hate FICA taxes so I pay almost none and my projections say I will get about 600 from SS.

 

[dmclone]

We must waste way too much money or I'm overestimating. Even with a paid off house, no kids, and zero debt, if I retire at 60, I plan on needing $90k/year to live.

 

[Cyclones_R_GR8]

What we have found in retirement is the amount that you have set aside in investments and savings is also still drawing interest. So if you have a million dollars in those investments and are drawing out 4%, you are not at $950K after a year more like $990K because its still bringing in 4 or 5% after taxes.
We currently are taking out 4 grand a month from our retirement accounts, the way it is structured we have been doing this for over a year, at our current pace the account will never be empty. Every year it brings in what we are taking out, the principle has dropped very little with the up and down in the market.

I keep a spreadsheet of my accounts that I use to try different withdrawal strategies. I use a 6% investment return for these simulations. I figure I can just pull from my investment fund each month. Once RMDs kick in I'll just deposit what's left after taxes into the investment fund and keep drawing on that. If I outlive that the Roth should be built up pretty nicely by then.
I'm keeping it pretty conservative for the most part. I figure if I want some extra in the early years of retirement I can pull some out of the IRA.

 

[Clark]

We must waste way too much money or I'm overestimating. Even with a paid off house, no kids, and zero debt, if I retire at 60, I plan on needing $90k/year to live.

uhh, yeah you waste a lot of money. lol

But hey, if you've got the money who am I to judge.

 

[dmclone]

uhh, yeah you waste a lot of money. lol

But hey, if you've got the money who am I to judge.

I feel like I'm being reasonable but I'm probably exaggerating health care, entertainment, and dining costs.

Property taxes 6,000
Non medical insurance 3,000
Home improvements 5,000
Food/Dining out 8,000
Vacations/travel 6,000
Taxes 12,000
car costs 5,000
Entertainment 10,000
Utilities 4000
Health care-Pre medicare 20,000
Everything else 11,000

That's 90k

 

[Cyched]

We must waste way too much money or I'm overestimating. Even with a paid off house, no kids, and zero debt, if I retire at 60, I plan on needing $90k/year to live.

 

[Bestaluckcy]

We must waste way too much money or I'm overestimating. Even with a paid off house, no kids, and zero debt, if I retire at 60, I plan on needing $90k/year to live.

Probably not too far off. We are retired and managed to spend $81,000 with no debt and not much to show for it. Did spend a few bucks to make the world a better place(charitable). Wife is happy, so happy life.

 

[Cyclones_R_GR8]

I feel like I'm being reasonable but I'm probably exaggerating health care, entertainment, and dining costs.

Property taxes 6,000
Non medical insurance 3,000
Home improvements 5,000
Food/Dining out 8,000
Vacations/travel 6,000
Taxes 12,000
car costs 5,000
Entertainment 10,000
Utilities 4000
Health care-Pre medicare 20,000
Everything else 11,000

That's 90k

Health care is what is getting you (and anyone else that retires pre Medicare) Once you hit 65 you can eliminate most of that. You can make adjustments after that