retirement, what's your magic number?

[wdwfan16]

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.

I would never enter retirement with a mortgage but that seems to be more and more common these days!

Just having a paid off home does not guarantee you can still live in it. You need money for repairs, property taxes and utilities. You may even need money to pay a person to clean it and tend the outside, if you health won't allow you to do it. So just a paid off house is not enough.

A paid off house has an advantage in that you can sell and keep all the money to use to pay rent or to buy another better home for you in retirement.

We also do not figure SS into our retirement. We will treat it as windfall money.

 

[ohlas]

husband retires at 55. I think i will work till im 60. we save about 25% of his income every year... 20 % of that is public service retirement, 5% is separte stock fund 60/40. then i plan to save 15% from my job in 2 years.... im sure we will have over the 2 million plus mark. plus house will be paid for before that.

we are only planning for 15-20 years before we are drooling on selfs.

I will never see a dime we put into ss ever make to much money..

 

[MrsPete]

I would never enter retirement with a mortgage but that seems to be more and more common these days!

Just having a paid off home does not guarantee you can still live in it. You need money for repairs, property taxes and utilities. You may even need money to pay a person to clean it and tend the outside, if you health won't allow you to do it. So just a paid off house is not enough.

A paid off house has an advantage in that you can sell and keep all the money to use to pay rent or to buy another better home for you in retirement.

We also do not figure SS into our retirement. We will treat it as windfall money.

I read yesterday that HALF of all Americans never in their entire lives own a paid-for house. I don't think it's quite the goal that it used to be in past generations.

You're right that the house will keep on costing, but having it paid for IS a huge, huge step in the right direction. Maintaining a house isn't nearly so expensive as paying for a house.

 

[ohlas]

Lots of things go into getting ready for retirement. First step is a plan of what you want to do. Like do you want to stay in your present house, do you want to live in the area you are now. What will you do with your retirement, play cards, live in a condo next to disney???? For us dont know the place yet but we arent staying in this house (to big) would love to travel for the first 10 years of retirement, like rent a house in london for couple of months and live there, kinda like a international sunbird (people who live half year in northern states and the other half of the year in fla.)

we have 12 years left in this house till the kids are gone, then its down sizing big time, thinking condo 2 bed room, as long as one has walk in closet.

 

[Alexander]

No magic dollar number, but DH and I are both 55 and out! He is 5 years older than me, so I will work 5 years after he retires. We will have everything paid off and have plenty from our pensions to live on.

It amazes me that people in their 40's are taking out 30 year mortgages! I would never want to be 70 and still paying for my house! Ours will be paid off before we are both 50.

 

[dvcgirl]

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.

There are loads of financial calculators out there that show that final number in future dollars. It's a pretty humbling experience seeing that number.

 

[dvcgirl]

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).

We're going to see more and more of this. Almost all states have already changed the pension plans with respect to new hires. But many have laws in place that prevent them from messing with the pensions of those workers who are nearing retirement or already retired. Well, those laws are going to change....no doubt about it, because the states simply can't afford the promises that they've made.

I know that in my state (NJ), our new governor is looking into doing exactly this....making changes to existing teacher pensions, and has locked horns in a vicious fight with the teacher's union. This year the state budget made $0 in contributions to the state teacher's pension fund. I think they were supposed to put in 3 billion....but the governor has to present a balanced budget...it's the law, and he cut like crazy. The previous governor skipped payments in 2008 and 2009. So that further compounds the problem as our state pension fund is underfunded by 48 BILLION dollars according to the state, and up to 173 BILLION dollars according to other researchers.

With less than an 8% return, the fund will run out of money by 2013. Good luck with that in our current environment. And we're not alone....other states are even worse off. New York, California, Illinois....are all a mess.

I read a report that Illinois' State Pension is the most underfunded in the nation. I know that everyone thinks that their pensions are guaranteed by the state constitution....but trust me, if the state runs out of money, these retirees will see reduced benefits.....the conversations are already beginning. Here's a blurb from something I read the other day.....




Pension check may not be in the mail
August 10, 2010|By Dennis Byrne
Illinois public employees who think the state constitution guarantees that they'll get all their pension benefits may have another think coming.

Politicians' and public labor unions' assurances aside, there's another, not-well-publicized school of thought that says if the pension funds go bust, the state has no obligation to step in to pay the benefits. This runs contrary to the popular view that the Illinois Constitution, on its face, guarantees that all public employee pension benefits will be fully paid.

This belief is based on Article 13, Section 5 of the Illinois Constitution: "Membership in any pension or retirement system of the state, any unit of local government or school district … shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired."


Sounds solid, doesn't it? It's not, according to a legal opinion from the Chicago law firm Sidley Austin, provided to me by R. Eden Martin, president of the Civic Committee of the Commercial Club of Chicago.

The opinion acknowledges that the constitution creates a contractual agreement between the workers and the state's employee pension funds. But it concludes that neither the constitution nor the law say the state is a guarantor of that obligation.

The Sidley opinion argued that the state can become a guarantor only under section 2l2-403 of the Illinois Pension Code. That provision states that if a state pension fund runs out of assets "(a)ny pension payable under any law . . . shall not be construed to be a legal obligation or debt of the State . . . but shall be held to be solely an obligation of such pension fund, unless otherwise specifically provided in the law creating such fund."

So, does any law creating the pension funds "specifically provide" that the state would become the guarantor? Sidley examined the laws creating the five state pension funds and concluded that while each contains an "obligation of state" provision, none guarantees that the state will step in and pay the funds if they run out of money.

In simple language, that means if the pension funds run short of cash, public workers face the same sort of uncertainties that most workers in the private sector do."


In other words....nobody is safe.

 

[eliza61]

There are loads of financial calculators out there that show that final number in future dollars. It's a pretty humbling experience seeing that number.

Hey Girlfriend.

Humbling is not the word for it, I did one on line tool through Merrill lynch just for kicks and started laughing like a loon. jeez.

I'm trying to figure out what's going to happen with social security. As more and more of our population ages I can't see the feds just dropping it. So I don't think it will die completely.

Not sure of my magic number, I'm still trying to get my lips around college tuition. I took my son to an open house at Farliegh Dickerson, the host actually said tuition was 52K a year I mean he actually uttered those words like he was describing the weather. Needless to say Jr, will not be attending.

Anyway I do plan on leaving NJ but want to stay on the east coast so I'm thinking my cost of living will still be a bit high.
My company still has a pension for it's employees but this year they cut the pension for all new hires.

 

[LovableGluttons]

Mind if I chime in for bit on the retirement home thing?

If you or your spouse becomes ill, requiring total care, or you both become infirm, how will you maintain a home too?

I used to subscribe to the ideal of remaining in my home until I die.

Not now.

I don't want my kids having to clean my house as well as theirs.

DH and I have been discussing selling our home if it becomes too much to tend to and getting an apartment and a housekeeper.

Have you looked at pricing for Assisted Living or nursing homes?

I have yet to find a good long term care plan that does not make you wait 50 days before it kicks in. If Medicare covers 100% of only the first 20 days, 80% of the next 80, then nada, it looks grim.

DH being retired military, we have Tricare to use with Medicare, but the out of pocket costs could still be huge.

To stay out of a nursing home and have hired caregivers in home is big bucks that is not normally covered by insurance.


If you flip to a Medicare HMO, you may gain prescription coverage, but you lose coverage (like nursing home coverage) to pay for it.

 

[wdwfan16]

Mind if I chime in for bit on the retirement home thing?

If you or your spouse becomes ill, requiring total care, or you both become infirm, how will you maintain a home too?

I used to subscribe to the ideal of remaining in my home until I die.

Not now.

I don't want my kids having to clean my house as well as theirs.

DH and I have been discussing selling our home if it becomes too much to tend to and getting an apartment and a housekeeper.

Have you looked at pricing for Assisted Living or nursing homes?

I have yet to find a good long term care plan that does not make you wait 50 days before it kicks in. If Medicare covers 100% of only the first 20 days, 80% of the next 80, then nada, it looks grim.

DH being retired military, we have Tricare to use with Medicare, but the out of pocket costs could still be huge.

To stay out of a nursing home and have hired caregivers in home is big bucks that is not normally covered by insurance.


If you flip to a Medicare HMO, you may gain prescription coverage, but you lose coverage (like nursing home coverage) to pay for it.

It would depend on many things. First we have LTC with unlimited benefits. Ours pays almost $400 a day and we have the inflation rider too. They also give us 100% benefit for in care help. With that, if I was healthy I would keep the house and maintain it.

If something happened to DH I would sell the house. I would not want this big a home all by myself. I do not want anybody to feel they need to help me. I don't think I would want any house in my old age. I would most likely go to a senior place where I would have easier access to others my age who I could develop friendships with.

We have the money to cover the first days. It would be hard but we have it.

I am not one who is in the group "I will die in this house". I know people who were like that and they live a lonely life in the end. They were bound to the house and had no money for fun stuff.

 

[akcire]

Our number is $5 million. Due to medical issues we will have to work until we are medicare eligible--no buying private insurance for us.

I think we will hit our number, but if we don't and only hit $3 or $4 I am sure we can make it happen. The biggest thing is working until we are in our 60's.

 

[lisaross]

Don't really have a "magic" number..

I know my husband would like to retire at 57 - thats not happening, but perhaps at 62.

Our home mortgage will be paid off in 7 years - i'll be 50 hubby 51.

we put 6% into his 401k at work and they match that plus we put 200.00 per month into a ROTH.

we also put small amounts into mutual funds - i will probably use that to help kids with college..

I will get a small pension from a prior job maybe 200.00 per month - my husband will also be getting a pension -

Hoping for some social security..

Time will tell..

 

[Lucky4me]

We had the million dollar plan that is never going to happen. dh's catastrophic illness, racking up a lot of medical bills and now his inability to work at age 49 is the reason.
Our financial guy said not to sweat it, we are better off than a lot of people. We've lived frugally over the years, so not much will change.
There won't be any world travel like we wanted, but we're okay with that.
I think the major thing that will happen is our kids won't inherit as much money. We'll have to live off some of the principal of our portfolio, probably starting in a few years.
If Social Security disability ends, we're in deep trouble. We're depending on that, a lot.

 

[RitaE]

As somebody who works in Financial Planning I can tell you.

Most people don't even hit $100k.

and

$1 million probably isn't enough - but it is still way more than ... see above.

 

[abmitch01]

I'm a hospice nurse so seeing people who don't have long term care insurance is something I see every day. Medicare pays for hospice 100% but if you need more than 1-2hrs a day hands on care, you have to supplement with private hire. At $20-ish per hr, savings get wiped out pretty fast.

the cost of assisted living, etc is downright scary.

I think I'm too young to get long term care insurance but it will def be something I consider. I hope I can afford the premiums.

 

[wdwfan16]

I'm a hospice nurse so seeing people who don't have long term care insurance is something I see every day. Medicare pays for hospice 100% but if you need more than 1-2hrs a day hands on care, you have to supplement with private hire. At $20-ish per hr, savings get wiped out pretty fast.

the cost of assisted living, etc is downright scary.

I think I'm too young to get long term care insurance but it will def be something I consider. I hope I can afford the premiums.

This is risky. You are young and healthy and your premiums will reflect that. Ours are a flat premium for the rest of our lives. When I am retired our LTC premiums will be low compared to all other costs. If you had an unexpected illness you could be denied.

A PPers DH is only 49. He is not unable to get LTC. Had he bought is at 39 he may have been able to help the family more financially (depending on the plan and eligibility).

Check out the premiums with an agent. You will be shocked how much they go up as you age.

 

[bettymae1121]

Shooting for $2M but we could probably get by with less, our retirement plans are very modest. I plan on getting into mostly bonds by the time DH is 50 (I'm 4 years younger). I don't mind taking risk right now (DH is 38 and I'm 34) but by the time we reach middle age I don't want to be in stocks. I'd rather have a safe 5% return than a risky 8% return. We'll retire on what we have saved and will make our retirment fit our financial situation. We know no matter what we'll have enough to keep a roof over our heads, food on the table and medicine in our pill bottles, everything else is gravy.

LTC insurance is a big question mark for us. I can qualify for it right now no problem (will still hold off a few years though, I'll look into it when I'm around 40). But DH, he's an insulin dependant Type 2 diabetic (has had it for about 8 years now). Does anyone here know, can he even get it? I know it will be more expensive due to his medical history, but at this point I don't know if they'd even write a policy at any price.

 

[abmitch01]

thanks, I didn't even know you could get LTC ins at 40

 

[wdwfan16]

thanks, I didn't even know you could get LTC ins at 40

We already have ours. We got them in our early 30s. You can get them when you are a minor. I believe I read on the DIS of a mother who had it on her daughter and she got it when she was a minor. I am sure this is exceedingly rare.

I wish we got it in our 20s but I am so glad we did not wait until we were in our 50s to think of it. It might have been too late.

 

[eliza61]

I read yesterday that HALF of all Americans never in their entire lives own a paid-for house. I don't think it's quite the goal that it used to be in past generations.

You're right that the house will keep on costing, but having it paid for IS a huge, huge step in the right direction. Maintaining a house isn't nearly so expensive as paying for a house.

A very good friend of mine just took out a $400K mortgage At 50!! She always wanted to live in a mansion and said she'd rather die with a big mortgage, than not have her dream home. Go figure. both her and her dh are retired NYC cops and he still works. I know quite a few intelligent, successful people who plan on dying with a full mortgage.