Amount of money in your Retirement Fund

[Jodi1980]

Are you waiting to retire until you have a certain amount in your retirement fund? Does anyone know what a good amount to have at time of retirement?

 

[Pin Wizard]

Retirement fund? I'll be working the rest of my life.

 

[catsrule]

I like vacations too much. They'll be taking me out in a body bag.

 

[Pin Wizard]

LOL, Catsrule! You and me both!!

 

[faithinkarma]

I once read that you need to determine what annual income you will need to live, and multiply that number by 8. The result is the amount you should have saved.

I have no idea if this is still valid.

 

[GailT]

Unless I hook someone like Donald Trump I will be working till I drop dead

 

[house_of_princesses]

Annual income times 8? I'd like to know if this is true. How does one know what you need to retire with?

 

[faithinkarma]

I suspect that the factor of 8 is no longer a good one to use. I read that when interest rates were a lot higher.

 

[Jodi1980]

There is a calculator on the website below - you can find out how long it will take to become a millionaire!

http://cgi.money.cnn.com/tools/millionaire/millionaire.html

 

[jvas]

You will need approx 80% of your annual income to live the same lifestyle as you live when working full time.....

(so they say)

 

[iNTeNSeBLue98]

So based on what's here so far, you need 80% off your current income for each the years you expect to be around after you retire (8 for instance).

Multiply 8, or however many years you expect to live after retirement (think of your family history), let's say 10. Multiply 10 times 80% of your current income, we'll say 30K for a round number. Then divide that answer by the number of years you plan to work before retiring. That should give you an estimate of how much you need to save each year in order to maintain your current lifestyle after retuirement.

80% of 30k = 24k
24k x 10yrs = 240,000
240k/30years (for me that's working 'til I'm 64) = 8K per year should be placed in a retirement account.

 

[faithinkarma]

You should not be aiming to save enough to live on until you die, you should be aiming to build a nest egg that will generate enough income to allow you to live without ever having to touch the capitol.

So you need to figure out how much pension etc you will have and whether or not that will be sufficient to live from. If not, then you have to save enough to make up the difference.

If you saved 240k, invested conservatively that should generate an annual income of close to 20k per year, while leaving the original 240k untouched.

And don't forget that that 8k a year you are saving would be making interest the entire time, so you should end up with a multiple of 240.

 

[Feralpeg]

You will never feel like there is enough. You will just know when the time is right. I worried about it for years. I watched my stock portfolio go up and down. It finally came down to what I needed to do for my DD and I. Sure, I'd like to have more than I do, however I have enough to live comfortably. I have a very good investment firm handling my funds. I will make a recommendation. You can take it as just my opinion. Don't put all of your money into a retirement type vehicle if you plan on retiring before the government's idea of the proper age for retirement. If you do, you will have to pay a penalty on top of the regular tax for the use of your money. I wish I had put more money in a non-retirement vehicle. Remember, the age of retirement is going up from 59 1/2 to 62 based on when you were born. Who knows where it will go from there. When the government feels it is right for your to retire and when you feel it is right may be different!

 

[mudnuri]

DH and I both have 401K's, however our main retirement focus is in the stock market. DD's have their college tuition sitting in the stock market. We road it out after 9-11 and purchaed A LOT of stocks at that time, and now, I guess DH and I could retire, however we want to retire and be able to splurge, and travel etc.. we have 12 years left, when DH is 48 (I'll be 39) the plan is to retire then. DD 6 (the youngest) will have just graduated high school at that time. If we were to pull it all out now and just go with a minimal savings account, we'd be set. We also have CD's, and bonds, not just stocks

Brandy

 

[wuv tigger]

You need to do some homework for yourself.

One of the best places I have found is:

http://www.retireearlyhomepage.com/

If you want to be sure that you do not decrease your principal then you should take out no more than 4% of your nest egg per year. If you are willing to take more then you can model the results.

Most people on this page have found that you can live on 35-40% of your previous salary if your mortgage is paid off.

We currently have two years salary in 401k/IRA and I hope to have about 20 times when I retire in 20 years.

David

 

[faithinkarma]

My money is invested in Canada, where interest rates are higher right now, so that might be the difference...but I take 8% a year without taking out any of the nest egg. Actually I do not need it right now, so I am reinvesting it each year.

 

[DocRafiki]

Aw, shucks. i thought the question was going to be how much money DO you have in retirement accounts? I was so ready to give my answer... $50! WOO HOO!!!! WAIT... I think my employer matches 50% -- $75! YE--AHHHHHH BOYYYYEEE!!!

 

[cosette24601]

how much in my retirement fund? not enough.

 

[aprilgail2]

Not enough right now LOL....it has finally climbed back up to where it was pre-0/11 but I want it to be at least 300,000 by the time I retire in 9 years....I have an excellent pension plus railroad retirement and paid medical when I retire but I still would like to have 300,000 on the side just in case.

 

[Feralpeg]

Medical insurance is a big factor when considering retirement. DD and I are currently covered by COBRA. As soon as we move to Florida in June, I will seek other coverage. I want to make sure that I have found other coverage as soon as possible. Currently, I am paying $548 per month to cover the two of us under Cobra. When I was working, I payed nothing for my coverage and only $48 a month for DD. Big difference! Hopefully, I can cover both of us for under $700 when we go off COBRA.