retirement, what's your magic number?

[abmitch01]

I met with my retirement advisor at work today. She was telling me a lot of people have a certain amt of money they will feel comfortable retiring with. Or an amt that once they reach, they will start backing off on their stock portion of their investments. Do you have a number?

 

[brymolmom]

I think our financial advisor, given our preferred age to retire plus estimate life spans came up with somewhere around 2 million....

Seems SO FAR away.

I Think that might have been total with like house value at the time, but I'm not certain.

So far, that seems far, far away...but she says we're on track. We have one particular investment that has a LOT of our 'eggs' in that one basket - and a LOT of whether or not we make it to that depends on that one investment.

So I always look at it like we might have to pull out stops from other areas if that one doesn't make it as desired.

I'm HOPING that we're about 15 years away from retirement...but I'm 11 years younger than dh so likely I'll at least work longer than that.

 

[abmitch01]

I told the lady (pulling the number out of the air) 500k and that I thought that was too low. She suggested making that my number of when I back off on stocks. I still think that number is too low. So many unknowns, like healthhcare costs. I'm 40 and still 90% in stocks and plan to stay that way for a long time. She said that she thinks I'm on track for a good retirement and should consider saving less for retirement and more for college.

I'm too scared to do that, lol.

 

[LovableGluttons]

We met with a financial planner back in 1990 and came up with 2 million dollars generating an average rates of 5%. If history holds true based on performance so far, DH and I will have an income from interest only of low six figures. We hit our target a few years ago, but still invest the net income one of us generates just in case perfomance falls in the future.

Now, I don't think either of us would choose to retire until we HAD to, so we'd have a lot of options of what to do with our money.

Hope this helps!


ETA: DH and I are in our early 40's and have 2 kids, 11 and 14.

 

[abmitch01]

2 million sounds a lot more realistic to me, that helps to hear what others think. I really want to avoid living on cat food.

 

[LovableGluttons]

2 million sounds a lot more realistic to me, that helps to hear what others think. I really want to avoid living on cat food.

You know, I bet those dog biscuits are tasty. My dogs go wild over them.

There's always boxed man n cheese and canned tuna!

 

[abmitch01]

I'll only be getting the dog biscuits on double coupon days

 

[Luv Bunnies]

Our financial advisor told us to shoot for at least $1 million in our 2 IRAs combined. After retirement, if we get an interest rate of 5%, we could withdraw the $50,000 in interest each year to live on (plus Social Security, if that still exists by then and my public employee retirement plan). We're about 1/2 way to our magic number. We're not adding to our accounts right now since DH is unemployed. We're hoping he'll get a job with a company with a good 401(k) plan that includes matching so he can start building another account.

 

[Mary•Poppins]

I am reading a really good book called "The Boglehead's Guide to Retirement". I always get books from the library (because I am cheap and the library is right down the street) ... but this book was so good that I bought it.

The book is about the website that started with the ideas Jack Bogle imparted (who started the Vanguard Funds). The site works like the DIS boards. I have been on these boards and they are a bit over my head a lot of the time ... but the book has been great for helping people see what their magic number is and how to obtain it.

Here is the Boglehead website link:

http://www.bogleheads.org/forum/index.php

I think our magic number is 2 million, but with the way the stock market has been, I am not sure if we will get there. We have been putting more money into it now while it is low, and a bargain, but the older we get (I am 44 and hubby is 46) I think we need to invest in less risk. (I wish I had a crystal ball!) I am a teacher and have a pension, but the way the economy is going, I am afraid that what I anticipate being there, will be reduced.

Now, I could make my goal if I could only sell a kid rotfl: ... really teen-agers are a lot of fun!) Just teasing, I love my sons to death!

 

[neatokimmo]

I am aiming for early retirement (45-50) with a million. It really depends on the market. And if my investments start paying dividends again.

But I am in a low cost of living area and I am pretty happy in my little house. I'd only upgrade if I got married.

 

[abmitch01]

I'm happy in my little house, too. It's a townhouse and I love that I feel comfortable with the small mortgage.

I remember reading a review of Boglehead's. Thanks for posting that, I will get that book out of my library, too.

 

[disney1990]

This number will depend on other things also. Will you house be paid off when you retire? Ours is already paid off, so that changes how much money we will need.

 

[abmitch01]

it will be paid off

 

[wdwfan16]

I told the lady (pulling the number out of the air) 500k and that I thought that was too low. She suggested making that my number of when I back off on stocks. I still think that number is too low. So many unknowns, like healthhcare costs. I'm 40 and still 90% in stocks and plan to stay that way for a long time. She said that she thinks I'm on track for a good retirement and should consider saving less for retirement and more for college.

I'm too scared to do that, lol.

At 40 you are too invested in stocks.

We don't have a magic number of value but the amount of money we want to have in today's money when we turn X years old and our projected end of life age. We are on track based on those numbers. That total does not include the house.

 

[sarah4770]

I told the lady (pulling the number out of the air) 500k and that I thought that was too low. She suggested making that my number of when I back off on stocks. I still think that number is too low. So many unknowns, like healthhcare costs. I'm 40 and still 90% in stocks and plan to stay that way for a long time. She said that she thinks I'm on track for a good retirement and should consider saving less for retirement and more for college.

I'm too scared to do that.

im 45 and i a scared to have that much in stocks.
I used to risk a lot more, but right now have a 60/40 mix.
and will nowhere reach 500k at this rate.

 

[wdwfan16]

I am reading a really good book called "The Boglehead's Guide to Retirement". I always get books from the library (because I am cheap and the library is right down the street) ... but this book was so good that I bought it.

The book is about the website that started with the ideas Jack Bogle imparted (who started the Vanguard Funds). The site works like the DIS boards. I have been on these boards and they are a bit over my head a lot of the time ... but the book has been great for helping people see what their magic number is and how to obtain it.

Here is the Boglehead website link:

http://www.bogleheads.org/forum/index.php

I think our magic number is 2 million, but with the way the stock market has been, I am not sure if we will get there. We have been putting more money into it now while it is low, and a bargain, but the older we get (I am 44 and hubby is 46) I think we need to invest in less risk. (I wish I had a crystal ball!) I am a teacher and have a pension, but the way the economy is going, I am afraid that what I anticipate being there, will be reduced.

Now, I could make my goal if I could only sell a kid rotfl: ... really teen-agers are a lot of fun!) Just teasing, I love my sons to death!

You are being very smart. My aunt and uncle are both retired teacher and there state teacher's pension were just reduced. I don't know by how much but their retirement will not be what they thought it would be (investments not doing as well as they planned and two reduced retirements).

 

[nunzia]

I think the numbers are kind of hysterical...My goal is save as much as I can while still having a quality of life..Neither one of us has a defined pension..(really..people who do, I know it seems small to you, but outside looking in it's like a gravy train..unless they get cut..can they do that?) We save around 20% of our income for the future and are debt free except for our house and will have that paid off about 7 years before we retire..I've ramped WAY back on personal stocks and need to adjust the 401Ks stock percentages too. I'm leaning more toward TIPS but with the government as it is, I don't know about that anymore. I'm thinking a mattress with cash under it and a huge storehouse of water and non perishable food is the way to go..

 

[dvcgirl]

2 million sounds a lot more realistic to me, that helps to hear what others think. I really want to avoid living on cat food.

Well, 2 million will provide roughly 80K a year in income. The "rule of thumb" that most Certified financial planners go by is to be able to live on 4% of your nest egg per year. In theory, and I say that because the rules may be changing in front of our eyes.....factoring in inflation running between 3-4%, you'll never run out of money in a 30+ year retirement using the 4% withdrawal figure.

Also keep in mind that 2 million dollars 20+ years from now with 3-4% inflation will "spend" like 1 million dollars. In other words, 80K ain't gonna buy in 2030 what it buys today. So, it's important to calculate retirement figures based on future dollars.

 

[MrsPete]

More than having one big number which I aspire to reach before retirement, I have several smaller numbers:

The most important goal is the number 30. That's the number of years I need to teach before I'll have a full pension. I'm at 18 now. I'm not sure exactly what I'll do when I do reach 30. Depending upon other things, I may go teach in a neighboring state for another 5 years (which would garner a second, smalller pension), or I may do entirely different for a few years, perhaps on a part-time basis.

The next important number is 0. I'm already at 0 for my mortgage, but I don't want to retire in the house where I live now. We have land for our retirement house, and we plan to build a modest retirement home (not an extravagant home, but designed just for us). With the sale of our current home, I anticipate we can build what we want for very little. In my mind, being mortgage-free in retirement is necessary.

One number I've already reached is 40. That is, 40 quarters towards Social Security. Whether it'll do me any good, of course, is anyone's guess.

And, finally, there's our retirement accounts. I tend to focus on the things I just mentioned, while he thinks about these accounts. We don't really have a number in mind, but our goal is NOT to touch the principle in these accounts on a daily basis. Our goal is to build a frugal retirement lifestyle (one car, vegetable garden, etc) so that Social Security (?) and the pension'll pay the bills, and the retirement savings'll be available for travel and other luxuries.

 

[MrsPete]

Also keep in mind that 2 million dollars 20+ years from now with 3-4% inflation will "spend" like 1 million dollars. In other words, 80K ain't gonna buy in 2030 what it buys today. So, it's important to calculate retirement figures based on future dollars.

This is scary, but you're exactly right! It's hard to predict what future dollars might be worth.

That's one reason why the paid-for house is key to retirement. Whether your house is valued at 100,000 or 100,000,000 . . . you can still live in it, and the dollar figure doesn't matter.