Inspired by Disney Steve--How much do you think you'll need for retirement?

[ducklite]

And do you think you're going to be able to save it all?

DH and I think we'll need $1.5 million in cash, stocks, and real estate assets at the bare minimum to fund a comfortable retirement without counting on Social Security.

And even with that we're not sure it's going to be enough to do much more than pay the bills if we live past 90.

We've got a good jump on it, but probably not enough. We think that very soon we're going to have to save even more cash, or look at some real estate invesments.

Where is everyone else on this?

(I want to add that we plan on selling our home and moving into someplace considerably smaller within 5-10 years of retirement.)

Anne

 

[rumrunnergirl]

Right now we've got nothing but the equity in our house, but I read in a Money mag or somewhere that you need about 80% of your current income (to be comfortable and at the same standard of living you have now) and it needs to last 20 years. So, if right now you live on $40,000 per year, you'd need to have $32,000 coming in every year for 20 years. That's why they say to start saving when you're 18, LOL.
We are far behind but our plan is to start saving in 2 months, when my van is paid off. Of course, we've lived on a lot less than 80% of our current income and when we're older and not supporting two kids we will save even more. I can pinch a penny til it screams, then pinch it more just for fun, LOL. But no, with all that pinching I have no savings as it all went into buying our house (which has appreciated nicely and shows no slowing down over the next 20 years).

 

[crisi]

I don't like the Money magazine figures. We currently don't spend 80% of our income - and by the time we retire we won't have house payments, college to fund. It seems better to me to look at what your expenses will be when you retire. Its possible you will spend MUCH LESS than you do currently (particularly if you have a large mortgage that will be paid off and kids at home - particularly private schools and daycare). Its possible you will want to spend MUCH MORE (if you want to travel in your retirement).

We are doing OK, but I figure we will want to have more along the lines of $3 million in assets. But I'm not yet 40, and with inflation, we will need more than someone a few years away now.

 

[Julia M]

I don't like the Money magazine figures. We currently don't spend 80% of our income - and by the time we retire we won't have house payments, college to fund. It seems better to me to look at what your expenses will be when you retire. Its possible you will spend MUCH LESS than you do currently (particularly if you have a large mortgage that will be paid off and kids at home - particularly private schools and daycare). Its possible you will want to spend MUCH MORE (if you want to travel in your retirement).

We are doing OK, but I figure we will want to have more along the lines of $3 million in assets. But I'm not yet 40, and with inflation, we will need more than someone a few years away now.

Crisi,

Those statements apply to me.......a big mortage (to us, but small for our area!), three kids in Catholic school, and a dd who does a competitive sport. Those three things alone run us $3500 per month, and it will increase when the kids start Catholic high school (higher tuition). It doesn't include all the other misc. expenses with three kids. But once they are gone, our monthly expenses will really decrease!

Julia

 

[mhaley]

We may not have housing costs, child related expenses, college costs etc... but do not forget the rising cost of health related expenses for the elderly. This will be significant. Do not forget the rising costs of property taxes. If you live in New Jersey and other states like it, you can look at $1000+ per month. It may be more than just penny pinching.

 

[crisi]

We may not have housing costs, child related expenses, college costs etc... but do not forget the rising cost of health related expenses for the elderly. This will be significant. Do not forget the rising costs of property taxes. If you live in New Jersey and other states like it, you can look at $1000+ per month. It may be more than just penny pinching.

Yep, but a lot of people move when they retire to lower tax locations. And you may not plan for high medical expenses if all your uncles die of massive strokes between 70 and 72, having been perfectly healthy until then - or if you are retiring with a guarenteed medical pension. That's why, rather than saying 80%, you need to look at your individual situtation and what changes retirement will make to your spending - as well as your income.

 

[ducklite]

Rising medical expenses are what worry me more than anything. I don't want to have to choose between my asthma medication and paying the power bill.

Anne

 

[pearlieq]

Our planner keeps telling us we'll need between $3-4 million, which is about $350 per month for us. Time is definitely on our side!

 

[EthansMom]

Like others, DH and I would like to have $3 million put away for retirement.

 

[Katy Belle]

Interestingly enough, $3 million is our goal as well! We are in our late 30's and trying hard to get to that goal!
Katy

 

[MrsPete]

I don't like the Money magazine figures. We currently don't spend 80% of our income - and by the time we retire we won't have house payments, college to fund. It seems better to me to look at what your expenses will be when you retire. Its possible you will spend MUCH LESS than you do currently (particularly if you have a large mortgage that will be paid off and kids at home - particularly private schools and daycare). Its possible you will want to spend MUCH MORE (if you want to travel in your retirement).

This is very close to my reasoning. Right now we save a large percentage of our income, and I'm not sure it's fair to say that we need 80% for retirement -- especially because we won't be paying for the kids' expenses any longer. Here are my plans:

I live in a large, middle-class house that's paid for. It's in a top-notch location, so I only see the value going up. Once the kids are out of the house, my husband and I plan to downsize (probably to a condo because we both detest yard work). Hopefully the sale of this house will fund a smaller place. Still on the subject of "the big stuff", we had only one car for years; we'll definitely go back to one car once we both retire. So with a mortgage-free house and only one car, we expect to have no "big bills" in our retirement years. That alone frees up quite a bit of money.

I am one of the few Americans who still has a traditional "pays you X amount per month for the rest of your life" pension plan. It'll be about half what I make now, which won't be too bad considering my work-related expenses will disappear. I'll also have my insurance paid, though I'll probably want some supplemental insurance as well. This pension is hugely important to me because I come from a line of women who tend to live well into their 90s. I don't want to run out of money and have to depend upon my children. Our hope is that this money will be our "everyday living expenses money" -- this should pay the power bill, groceries, etc.

My husband and I been putting the maximum amount into our 401Ks ever since we started working, and we're seeing some good numbers now. In fact, I'm rather surprised that we've accumulated this much in so little time. I don't know that we exactly have a target number, but our idea is that we would try to maintain the principle and use the interest (along with my pension). We'd draw upon this money for vacations, cars, and other "necessary but not everyday expenses".

We own a large amount of property, and we're considering building rental property. We'll probably build commercial properties; however, that's still down the road.

I expect to retire in 2024, and I am not counting on Social Security to be around for retirement. I figure it's safer to assume it won't be there; that way, if it IS there, I can be happy, which is much safer than assuming the other way around.

What I do not want to do during my retirement years is work! I see myself volunteering for various groups that I care about, and I'm definitely interested in doing more mission-related work with my church. But I don't see myself needing work to fill my time, and I believe we'll be set financially to do without the paycheck.