How much is optimal to have in 401K when retiring?

[Tenacious K]

Wait.. so because this post is 12 years old, has OP retired yet?!?

 

[mjkacmom]

Assisted living/nursing homes run about $100,000 a year.

 

[rkstocke5609]

I’ll add one more thing to this discussion. The notion that retiring means not working at all is something some of us aren’t “wired” to do. I am sure I will always be doing something that will generate 10-15K per year part time (as long as possible). So, when calculating numbers things shift a bit. Currently, we have about 250K in 401k’s & IRA’s, but we also have real estate that can be liquidated. Then, there is also the possibility of inheritance dollars down the road (of course you never know and can’t count on it..)

One more note — IMHO it is important to find a balance between living in the here and now and saving for retirement. I’ve known more than a few people that have saved their whole life for the “big” retirement only to get there and have their health fail and pass too early never to enjoy what they thought they were saving for....just sayin’, beware.

 

[disneymagicgirl]

See, and I think that is ridiculous. Why do you need to leave your heirs anything at all? I consider that a bonus. You should be saving to finance your own retirement without becoming a financial burden to anyone else, but saving so that your kids can be millionaires when you die is stupid, IMO.

Ummmm, yes. I’d much rather my parents and inlaws enjoy their lives, spend and experience, than save money to pass onto me. Passing on money shouldn’t even cross their minds.

 

[rkstocke5609]

Ummmm, yes. I’d much rather my parents and inlaws enjoy their lives, spend and experience, than save money to pass onto me. Passing on money shouldn’t even cross their minds.

Oh, and it can even be sillier than simply passing on money to children. My dad’s estate states that my sister & I each get 25% and each of the 5 grandchildren get 10% (at 23 or something). Now there is a great-grandchild in the mix. Just can’t wait to hear the next revision. If he isn’t careful the estate will survive me....

 

[tvguy]

See, and I think that is ridiculous. Why do you need to leave your heirs anything at all? I consider that a bonus. You should be saving to finance your own retirement without becoming a financial burden to anyone else, but saving so that your kids can be millionaires when you die is stupid, IMO.

My mother in law worked as a teacher her whole life and recently retired. Her assets are well under $500k. She is living on something like $3500/month guaranteed fixed income. She luckily has VERY low cost healthcare for life. Her home isn't worth much and she still has 5 more years before it is paid off.

When she retired, she actually almost purchased a life insurance that would have cost her an arm and a leg because some shady financial advisor made her feel like she HAD to leave her 3 kids an inheritance. I laughed and told her she would be crazy to do that and I said to her "You don't need to leave your kids a penny. Worry about yourself and make sure you use your money wisely."

I agree. But it does give you a little perspective into how some people think. And I suspect that number was chosen as default because it is the number many individuals choose. Whether they achieve it, I don't know.

 

[tvguy]

Assisted living/nursing homes run about $100,000 a year.

Long term care insurance certainly should be part of your Estate Planning.

 

[tvguy]

Wait.. so because this post is 12 years old, has OP retired yet?!?

As of 2013 Minnie was still working. https://www.disboards.com/threads/going-from-2-salaries-to-1.3121401/
Minnie hasn't been on the boards for 2 months, maybe she will let us know.

 

[Donna M]

To make things scarier, you may plan to retire at a certain age, but your company may have other ideas. My dh was eliminated because his company "had a right to grow" or some such thing. It was out of the blue. At 60 years old, it's hard to get another comparable job, or even want to. He was able to get retraining money and is a flight instructor which he loves, but the income is drastically reduced.

Our advice to our kids is to save as much as possible. We have over a million because he saved about 30% of his income as a welder working 6-7 days a week for years.

 

[DLgal]

Assisted living/nursing homes run about $100,000 a year.

I'd like to know where they cost that much. My grandmother recently passed away at the age of 91. She was in an assisted living facility for the last 2 years, one if which was spent at the highest care level. The lower care level was $3800/month, the highest care level was $5200/monh. This was a fairly high end facility in the Orlando area.

 

[tvguy]

I'd like to know where they cost that much. My grandmother recently passed away at the age of 91. She was in an assisted living facility for the last 2 years, one if which was spent at the highest care level. The lower care level was $3800/month, the highest care level was $5200/monh. This was a fairly high end facility in the Orlando area.

Seemed high to me too, but I Googled it. Average in the U.S. is $92,000 a year.
The prices I got for my mom in 2012 were $3800 to $8,500 for a very high end luxury facility.
A growing option here are "buy in" facilities. One payment of $200,000. Most of the residents there sold homes and are using some of the money from that to buy in.

 

[bdcp]

Seemed high to me too, but I Googled it. Average in the U.S. is $92,000 a year.
The prices I got for my mom in 2012 were $3800 to $8,500 for a very high end luxury facility.
A growing option here are "buy in" facilities. One payment of $200,000. Most of the residents there sold homes and are using some of the money from that to buy in.

My MIL lives in a senior retirement community but requires 24/7 help because she's legally blind, needs help showering, dressing, etc and is a high fall risk (multiple falls, fractures, concussion) and she's 85. The cost is closer to 200,000/year for the 24/7 care alone. Pension and SS cover her monthly living expenses outside of the aides. Assisted living in the facility she lives in, which is the next step up would be almost as much because of the level of care she requires. The facility she lives in is the nicest I've ever seen and all the aides say the same as they also work in other facilities because they are with a private business we've hired. It's an independent living retirement apartment complex with assisted living, long term care and memory care in a separate building where she spent some time recovering from two separate falls. None of that cost is covered by insurance or medicare, but some is tax deductible. The buy in for her 2 bedroom/2 bath apt was $414,000 and her monthly payment is about $2600 which covers all utilities and one meal per day. DFIL passed away last year 4 months after they moved, but he never lived in the apt. He spent the entire 4 months in the long term care facility and in and out of the hospital. While he was alive, it cost an extra $800/mo for the apt. Medicare and insurance picked up almost all his expenses at the long term care because of the circumstances. My point is, it all depends on where you live and what type of care is required. Fortunately, even though DFIL's pension wasn't terribly high, it covers her expenses outside the full time care and he had stocks from jobs previous to his Fed Gov career and those have been doing well. So far, after just over a year, we've only dented the principle by less than the 200K that's been spent.

 

[bdcp]

To make things scarier, you may plan to retire at a certain age, but your company may have other ideas. My dh was eliminated because his company "had a right to grow" or some such thing. It was out of the blue. At 60 years old, it's hard to get another comparable job, or even want to. He was able to get retraining money and is a flight instructor which he loves, but the income is drastically reduced.

Our advice to our kids is to save as much as possible. We have over a million because he saved about 30% of his income as a welder working 6-7 days a week for years.

My DH just started at new job in Aug and he's 60. He's a Federal contractor. His previous contract was ending and he had nothing coming up with the company he was with. At about that time a headhunter found an old resume (5 yrs old) online and contacted him. He interviewed and he was just what they were looking for. He got a 17% raise and really likes the new company. The field he's in really needs experienced people while still hiring younger people so it's a balance. We still make sure to save as much as possible an increased our 401K deductions when he started this new job.

 

[runwad]

DH and I were just talking about this today as he got his deferred comp statement. I really think we'll be fine. In fact I think we will be more than fine, but I hesitate to say that because you just don't know about healthcare. Between his deferred comp and pension and my 401k, ss and small pension, we will make more money each month than we do now! I'm starting to think of RMD and if we could be in a higher tax bracket!! I'm going to research if we can, little at a time, convert some of his deferred comp into a Roth Ira. Good problem to have I know. But the last thing I want is to have saved all these years and then see it all go to taxes in retirement were there aren't as many ways to shield your money, or maybe I have to start learning about them.

At any rate, we never had a fancy lifestyle and were always able to live on less so I'm pretty confident we'll have a good retirement. Dh wants to go out in 8 years and he'll have 35 years in, like I said the gorilla in the room is healthcare. He carries the benefits for our family and if all the kids aren't launched he might have to stick it out a few more years.

 

[tvguy]

DH and I were just talking about this today as he got his deferred comp statement. I really think we'll be fine. In fact I think we will be more than fine, but I hesitate to say that because you just don't know about healthcare. Between his deferred comp and pension and my 401k, ss and small pension, we will make more money each month than we do now! I'm starting to think of RMD and if we could be in a higher tax bracket!! I'm going to research if we can, little at a time, convert some of his deferred comp into a Roth Ira. Good problem to have I know. But the last thing I want is to have saved all these years and then see it all go to taxes in retirement were there aren't as many ways to shield your money, or maybe I have to start learning about them.

At any rate, we never had a fancy lifestyle and were always able to live on less so I'm pretty confident we'll have a good retirement. Dh wants to go out in 8 years and he'll have 35 years in, like I said the gorilla in the room is healthcare. He carries the benefits for our family and if all the kids aren't launched he might have to stick it out a few more years.

No question, healthcare cost if you retire before age 65 when you qualify for Medicare is the mystery question. Naming the Healthcare Act the "Affordable" healthcare act certainly was an unfortunate move given what it has done to rates. Our Financial Planner did a work sheet for us in 2008 and private market insurance was several thousand dollars cheaper than using our COBRA option. Now, COBRA is thousands cheaper. But, our income in retirement will be higher than our take home pay now just like you. The run up the past year or so in stocks certainly has been a huge help, and investments that lock in that value were a great recommendation by our Financial Planner.

 

[runwad]

No question, healthcare cost if you retire before age 65 when you qualify for Medicare is the mystery question. Naming the Healthcare Act the "Affordable" healthcare act certainly was an unfortunate move given what it has done to rates. Our Financial Planner did a work sheet for us in 2008 and private market insurance was several thousand dollars cheaper than using our COBRA option. Now, COBRA is thousands cheaper. But, our income in retirement will be higher than our take home pay now just like you. The run up the past year or so in stocks certainly has been a huge help, and investments that lock in that value were a great recommendation by our Financial Planner.

Ya and DH gets healthcare for himself from his job and somehow I can buy in but no clue on the cost. I'm sure it will be more economical that any private plan or the ACA but these things keep changing so it makes it so hard to plan! I'm just keeping my fingers crossed, or I tell DH he can go be a school bus driver and just work for the benefits.ha

 

[WVMomof3]

https://www.msn.com/en-us/money/ret...mistake/ar-BBIu5S1?li=BBmkt5R&ocid=spartanntp

I can tell you what is not enough - Saw this article today. "When it comes to retirement savings, Americans are falling short. According to a report from the Economic Policy Institute, the median retirement savings of all working-age families, which the EPI defines as those between 32 and 61 years old, is just $5,000." Crazy, but I know so many live paycheck to paycheck and they just don't see anyway to save and then you have those that spend, spend spend never thinking about the future. Scary.

 

[piccolopat]

I'd like to know where they cost that much. My grandmother recently passed away at the age of 91. She was in an assisted living facility for the last 2 years, one if which was spent at the highest care level. The lower care level was $3800/month, the highest care level was $5200/monh. This was a fairly high end facility in the Orlando area.

The nursing home that my MIL was in before she passed away cost just under $10K a month here in the suburbs of NYC, and that was back in 2009.

 

[Dakota731]

And one thing that NONE of us but the good Lord above can say with any certainty is how long we will live after retiring. My poor father had a great sum saved and died a few years after retiring. Then on the other hand a friend’s mother thought she had enough saved, but is still living at 97 with nothing left but a small social security check.

 

[Hikergirl]

We are shooting for 2 Mil since we aren't counting on SS to be there. If it is great, but we feel it is better to be prepared if it isn't.