$ for retirement

[Buckalew11]

I am wondering, how much $ should a 40 year old woman have in her retirement fund?

 

[BillSears]

One BILLION dolloars.....

Sorry but I'd guess alot depends on your circumstances. Does your work have a nice retirement plan? What sort of cost of living is the area you plan on retiring in. When do you plan on retiring? Are you married or single?

I'm not an expert on these things but I'm certain there isn't a set number you should haveat 40.

I know as a government employee under the old retirement system I will be able to retire at 55 and recieve about 66% of my salary. Since I will have my house paid for by then I suspect I'll live comfortably without having to dip into savings at all. But I do have some money put into my retirement fund anyway just in case.

 

[Hillbeans]

We just met with our financial planner, and we're in the think of retirement planning, insurance, 529's etc (we're both 33) but my husband bought a great book about financials, it's called "Just give me the answers" and it goes over all kinds of financial advice. I don't have the book with me (it's at home) but maybe you can browse it at your bookstore. I also agree with the above poster, what kind of lifestyle you want to lead in your retirement years will be a huge factor in how much you should save. It's not a simple answer as you can see.

 

[Buckalew11]

I figured as much. I woke up this morning with this on my mind. I thank you for your answers. A billion dollars should keep me comfortable and in the lifestyle I am accustomed to.

I suppose I should do some research on this. Thanks for the name of the book!

 

[Dan Murphy]

Maybe some help here and here.

Not to be taken as investment advice.

 

[Pin Wizard]

Retirement? The last one in my family to get there was my grandfather. I can't even get into retirement mode. But I have to side with a billion also. Okay...a million is cutting it close I think...seriously! A few hundred thousand won't do it.

 

[catsrule]

They'll be taking me out of work in a body bag.

 

[Papa Deuce]

Originally posted by Buckalew11
I am wondering, how much $ should a 40 year old woman have in her retirement fund?

Isn't the rule of thumb that you will need 70% of your pre-retirement income to maintain your lifestyle?

If, so, base where you are now, on that.

My wife and I plan to retire in 18 - 20 years. We plan to, and should have, if all goes according to plan, about 1.8 million dollars. We figure that 1.2 million is the minumum we want to have.

 

[disneychrista]

I love this question on the retirement calultor that Dan posted.

For how many years do you plan to be retired

My answer is as long or short as "god" allows.

 

[LisaZoe]

Who needs to save for retirement... that's why I have DD.

Actually, I felt I was doing OK until I got laid off earlier this year and decided to go back to college. This means no significant contributions for 4 years... if I can afford to even make a contribution.

 

[aprilgail2]

I have been packing money away into my 457 for some years now....I am a government employee so we have retirement at age 50..which is only 8 years from now.....I don't have to rely on Sicial Security since we don't pay into that, we have our own plan and also on top of that I should get from my pension alone about 60 percent of my salary. When we retire we ususally end up taking home more money than when we worked since we won't pay union dues anymore...we are exmept from state tax and don't even have to file state income tax once we retire. As long as my daughters college funds add up to over 50,000 (of course I will keep adding to it once I retire too) by the time I retire than I have no problem taking my pension at 50 and being free!

 

[mallcat]

So, if I have to save 70% of my income now for retirement- what do I live on now? Looks like DH and I will be working until the bitter end. We have 401k's, but no work related pension. Very few employers provide pensions these days. And, with a mortgage until we are in our 60's, we won't be retiring unless one of use becomes unable to work, thus creating a real situation unless our 401k's are substantial. We got a late start in life due to divorce/child support situations. It's difficult these days to save and live when having these obligations for 20 years. We've paid for 3 kids, braces, weddings, etc. So, I guess now that we are in our 40's, our money is our own to do with as we please. Which means, now we can start saving for retirement. Oh well. Good thing I like my job.

 

[Christine]

I'm 40 years old and I'd like to know the answer to that too!!

I have been contributing to my company's 401K since I was in my late-20s. I am now 40. I swear the amount in that thing has not changed in years. Granted, I've only been able to put in the 6% most of the time and I get a company matching for that, but I think I still only have about $45K in the account. It is basically a tax shelter for me and probably won't help me much because the market has been so bad.

I remember a few years ago, when I felt I was doing well financially (it only happened once), I decided to to the max on my 401K which was $12,000 that year. Well, I lost the entire $12,000, the company matching AND THEM SOME!! Very depressing.

Now, I've got two kids in braces, two kids in private school, property taxes skyrocketing, homeowners' insurance just doubled, and it is VERY tempting to stop the 401K contribution just so I get fix my sliding glass door.

 

[Papa Deuce]

Originally posted by mallcat
So, if I have to save 70% of my income now for retirement- what do I live on now?

No, that isn't it. What that means is, if you spend $2000 for all of your expenses each month now, you will probably spend $1400 per month after you retire. You need to figure out how much you need to save to have that $1400 per month over the expected life of your retirement.

Substitute your own numbers... $2000 was just an easy number to use.

 

[Toby'sFriend]

yeah, I think a Billion might be too high. 1/2 Billion should cover it nicely.

 

[arminnie]

Originally posted by Papa Deuce
Isn't the rule of thumb that you will need 70% of your pre-retirement income to maintain your lifestyle?

Just remember that rule of thumb doesn't work for a lot of people.
The cost of living where you are working (and the cost of a house payment and taxes) may be significantly different from your retirement cost of living.

If you are the type of person that has been waiting for years to travel a lot during retirement, then you might actually need more money to fund your retirement expenses.

Most prudent financial planning says that you should not take more than 4-5% of your retirement funds out each year if you want to make sure that they last and don't run out.

For example - if someone has $300,000 of retirement assets they should not plan on taking more than $12-15,000 per year as income. Much more than that and you can seriously run the risk of outliving your assets.

Many people think they can generate 10% retirement income off of their assets - say $30,000/year but that does not provide adequately for cost of living increases and market fluctuation.

 

[Pin Wizard]

Originally posted by disneychrista
I love this question on the retirement calultor that Dan posted.

My answer is as long or short as "god" allows.

LOLOLOL! That question is too much!

 

[Pin Wizard]

arminnie...you're truly scaring me!! I'll be in the same boat at Catsrule! Just get the body bag and pick me up at my desk.

 

[Pin Wizard]

Originally posted by LisaZoe
Actually, I felt I was doing OK until I got laid off earlier this year and decided to go back to college. This means no significant contributions for 4 years... if I can afford to even make a contribution.

Bingo! College is on hold and I'm STILL job hunting!

 

[arminnie]

Sorry for the scary post!

Maybe this will make you feel better. I got totally wiped out financially when I was in my early 40s. I literally lost every penny of home equity, retirement savings, etc in the bust in Houston in the 80s. I lost my job and ended up making half of what I'd made before. When I sold my houses (I had investment property as well as my home) I took terrible losses and ended up owing money to the lender at closing. I was so happy when I finally got my networth back to zero from the minus column.

But I am 58 now and in fairly decent financial shape. Some of it was luck (FINALLY made money on a home sale), but most of it was saving a lot and then moving to a state (Arkansas) with a lot lower cost of living than California.

It's hard to play catch up but it's worth trying.