Retirement savings - are you on track?

[aprilgail2]

How you lived your life prior to retirement certainly would be an issue. But I would expect someone who has been out in the working world for 40+ years to have fewer expenses. No kids at home, most would have no parents to support, house paid for. Like I said, I managed my mom's affairs for over a year, and her expenses were less than $700 a month. $90 a month for yard car, $90 a month for supplemental healthcare insurance, $100 for property taxes, $75 a month for gas and electric and phone. $50 a month for car. The rest was food and miscellaneous.

Well right there is a big difference. If you want to stay in your house here it will cost you 800-1000 a month for property taxes alone! Electric is minimum 150.00. Of course you can move into an apartment but a very small one bedroom is still going to run you 1500 a month and that's without utilities! My moms car insurance runs 100 a month for minimal coverage. Prescriptions run anywhere from 100-400 a month.

 

[tvguy]

Well right there is a big difference. If you want to stay in your house here it will cost you 800-1000 a month for property taxes alone! Electric is minimum 150.00. Of course you can move into an apartment but a very small one bedroom is still going to run you 1500 a month and that's without utilities! My moms car insurance runs 100 a month for minimal coverage. Prescriptions run anywhere from 100-400 a month.

Yes, there are regional differences. Property taxes are set in California at 1% of purchase price since the passage of Prop 13 in 1976.........or for people like my parents who purchased their home in 1960, 1% of the value in 1976. My mom sublet her Medicare to an HMO and purchased an upgrade for $90 that covered prescriptions. I'd shop around on the auto insurance, that is awfully high for a senior citizen, assuming she has a reasonable driving record.

 

[Donnainnj]

How you lived your life prior to retirement certainly would be an issue. But I would expect someone who has been out in the working world for 40+ years to have fewer expenses. No kids at home, most would have no parents to support, house paid for. Like I said, I managed my mom's affairs for over a year, and her expenses were less than $700 a month. $90 a month for yard car, $90 a month for supplemental healthcare insurance, $100 for property taxes, $75 a month for gas and electric and phone. $50 a month for car. The rest was food and miscellaneous.

Not sure that that is the norm. Medical expenses can take a big chunk of that. I know living on $15,000 a year would be near impossible around here. My grandmother was really good with money, my grandfather never made more then $15,000 a year from working. He retired in 1986. When they downsized and sold an investment property they were able to put away enough to make nearly the $600 more they needed each month to be comfortable. Now she needs a live-in and the principle is going fast. Without that she would not have been able to afford this care. God willing, she will be 89 on October 9th.
Donna

 

[MrsPete]

Yes, we're on track, and it's not by accident: We're not high wage earners, but we've always lived beneath our means and have made sacrifices so we could save. I've stayed in a low-paying job for the sake of my pension. I credit my husband for recognizing the power of compound interest when we were still very young. Our plan:

Continue saving 'til we retire at about 55.
Sell our current house and build a smaller retirement house, which will be designed with aging-in-place features like no-barrier shower and an upstairs appropriate for one of our children or a paid care giver to live.

Retire from our "real jobs" at 55 and use my pension, which is enough for necessities, but not extras.
We will both work part-time (or maybe seasonally) to bring in money for travel and other extras.
The part-time work will allow us to delay touching our savings.

Sometime 65-70, we'll begin collecting Social Security (maybe); this will hopefully replace the part-time work.
We can dip into savings at this point; however, I'm not clear on how one begins dipping into 401K money or how to determine how much is okay.

Concerns: Inflation and unpredictable medical costs.

We are on track. Like someone else said, our monthly "stuff" will be near non-existant in retirement. No college saving, no mortgage, no student loans, no daycare, etc. Currently, we could live on 1/4 our current income if it was not for those "things". So, we are aiming for 30% of our current income in retirement.

That will leave enough each month for fun, and enough for a few vacations each year, too

Yes, we spend less per month now than we did when we were younger. We no longer have a mortgage, and we only drive paid-for cars. We will downsize to one car once we're retired. Once our kids are out on their own and we are no longer saving for retirement, we will definitely need less each month to cover our necessities.

I don't know about you, but I think I'm pretty likely to run out - or my heart/liver/kidneys and brain function eventually will. I'm not interested in my money never running out. I'm interested in me running out BEFORE my money runs out. I'd like to have a little something left for the kids/charity - but the idea isn't to leave them with the amount I have on the day I retire.

Maybe I'm making the wrong bet and sometime before I'm 85 we will have solved the health problems in aging. But I don't think so.

Yes, I want to be sure that however long I live, I have enough to live comfortably! I may one day need to depend upon my children to help me with daily life, but I do not want them to have to reach into their own pockets to support me.

I'm not sure I agree, however, that health problems will be solved by the time I'm 85. We as a society continue to do all the wrong things -- eating burgers instead of salad, sitting in front of our computer screens instead of exercising -- and that's going to continue to counteract the medical advances.

The average social security wage in the US is a little under $15,000 a year. I certainly don't find it hard to understand why people would struggle on that amount.

15K is enough to live comfortably IF you have a modest, paid-for house; if you never travel; if you have good medical insurance. However, a person who didn't manage to save ANYTHING for retirement isn't likely to be set up for that low-cost lifestyle.

The real issue with Social Security is the people who are counting on it as their sole source of income for retirement.

 

[scottmel]

A few of you said your expenses will be non existent in retirement. Well I am 45. I have no mortgage anymore, no child care costs and DD 14's education is paid for and tucked away. I have no car payments, own the cars. BUT boy do I have an outflow of cash!!!

TAXES!!!! Cellular data plans, cable, electricity, gas, trash, car insurance, home owners insurance, church donation, etc.To budget monthly, right there is 1500 per month with nothing to show for it so to speak. Haven't even thought of gas for the car or food or any other expense I might have. So don't be fooled into thinking retirement expenses will be nill once kids are gone and mortgage is gone. My child is not gone (so I still have her lessons, private highschool tuition etc) which I didn't even take into account for above...

 

[Pigeon]

We are on track, even a little ahead of the curve.

But we also aren't planning to retire until 67. Most of the people I know who are whining about not being on track plan to retire at 62.

 

[arminnie]

The problem with a lot of these retirement projections is that they go for 100% safety. Since the bond rates are so low they want you to have a zillion dollars in the bank.

I have been retired for more than 10 years. I spend a lot of money. More than when I was working.

But I have stayed pretty flat on net assets. I am invested pretty aggressively.

I personally do not want a lot of assets left when I die. And I foresee that I will not spend that much 20 years from now.