retirement, what's your magic number?

[dvcgirl]

Absolutely don't get it. Remember what you just said. For 30 years we've been living "la vida loco" on unsustainable, unreal (for lack of a better descriptions) money and growth. Folks saw the easy credit and unrealistic growth rates as some type of divine notion that this is how it will always be.

And I think also John p public bears quite a bit responsibility. as long as the party was rolling along, no one thought about what would happen when the tab came due.

Not only that we still are looking for a quick fix. I'm not going to get into my political leanings but I really don't think anyone could have fixed this mess in 4 years? Donkey, Elephant, Indian chief.

No quick fix.... It's like Mrs. Pete said....we're going to get back to living within our means. At the height of the insanity, Americans were pulling 800 Billion dollars a year out of their homes to spend at the malls. For the foreseeable future that game is essentially over.

We went from a 0% savings rate to a little over 6% last month. And Americans are paying down (or defaulting) on 60 Billion dollars in debt per quarter.

Soooooo.....we're heading back in the right direction with respect to our household balance sheets, but this isn't great news for all of those restaurants, malls, hotels (fill in the blank)...we've been building with debt this last decade.

The world isn't going to end, but for the next 5-10 years, we're going to need to be much more nimble as investors (well, for those of us lucky enough to have anything to invest). And definitely be looking to invest internationally, because domestically, our growth is going to be much slower than what we've seen this past decade.

 

[eliza61]

One of my biggest regrets is that I wasn't a big saver in my youth. My parents did drum into me live within my means but dh and I pretty much start saving until we were in our mid 30's. We travelled a lot and I don't regret that but every time I think of the magic of compound interest and all those years of not saving I turn an interesting shade of green.

 

[Colleen27]

I don't have a magic number anymore. There was a time when we were shooting for 1M, but I don't think there is a snowball's chance of us getting there the way things are going unless we sacrifice just about every pleasure we enjoy right now in favor of saving more. Right now, we're sort of winging it and working on finding a good balance between saving for tomorrow and enjoying today.

 

[runwad]

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 aour 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.

How long have you had your plan? Even though they say your premium will stay the same, I've read articles on older adults who's monthly premiums went up so high they had to cancel just wondering

 

[wdwfan16]

How long have you had your plan? Even though they say your premium will stay the same, I've read articles on older adults who's monthly premiums went up so high they had to cancel just wondering

About 6 years. We paid a higher premium to buy the fixed premium rider. We also paid more to get the inflation rider. Our premiums are exactly the same now they were when we got the policies.

Some policies have premiums that do rise but they started out with a smaller initial premium than we did.

The vast majority of the policies are 2 year, 5 year and unlimited benefits. Again we chose unlimited with the 100% home rider.

There are lots of different policies out there and you have to really read what you are getting.

 

[WheelCEO]

My goal is to sell my company within the next 5 yrs and use that $$ for investments and maybe invest in a new start-up. My ideal age would be 40-45 with $4-5 million

 

[Friendly Frog]

If we both could have kept our jobs until 65, we would have made the 1 million mark, not that I think that is enough.

We are probably in serious trouble because;

Neither of us have a pension plan of any type. and Medicare will be our only insurance.

I lost my job of 19 yrs when my company folded. I am now unemployed, over 50, and have health issues.

My husband is 60, and works contract work with start up companies, and that normally means no benefits and no health insurance. ( It was up to me to have a job with health insurance. )

Just found out tonight that DH's company is struggling, so he may be unemployed soon.

I don't know what we will do about health insurance now, let alone later. I am sure we will burn through our savings pretty fast. Jobs are just so hard to come by when you are over 50.

BTW- Where are y'all getting 5% on your money?!

 

[DisMN]

We didn't have a set $ but just that we'd save as much as we could and hit retirement running at DH's 30 yr mark at work. (Unfortunately we passed that 5 years ago now.)

About 17 years ago our house was totally paid off, we had the nice beginning of a 401K, and a small business that was just getting off the ground.
In the ensuing years we experienced 3 long term layoffs, a huge downturn in business in my store and some unexpected medical bills that were only partly covered by insurance.

We no longer have a paid off house, in fact only have a small amt of equity in it, we closed our store several hundred thou in debt, and had to cash in the 401 to survive the second and third layoffs. The final nail in our coffin is the company DH works for took away their pension. They won't get anything and as it's looking right now the PBGC will be bankrupt itself. Even if he does get PGBC funds it'll only be a small fraction of the pension he lost.

For us a magic number no longer exists. There won't be a retirement. Our only goal now is to hopefully finish paying down all our old business debt.......we've crossed off about half so things could be worse, eh? LOL

Congratulations to those of you who are succeeding with your retirement goals!

 

[Virgderon]

DisMn and Friendly Frog , I think what you are going through is far more common than some of the amounts saved that we are seeing here.

I applaud all of those folks that have done so well, but it does take a bit of luck along with the great savings habits. With DH being in IT, I would have thought you were crazy 10 years ago if you told me he would be laid off twice in 8 years! IT was supposed to be untouchable as a profession, and it was until this country starting sending all of our jobs offshore.

Anyway, when things were at their bleakest, a friend of mine who was a financial advisor said to just concentrate on being debt free before retirement, and that is what we are doing. We are still putting money in our 401k, but we are shooting for being mortgage free and debt free.

DisMN, hope I don't get flamed for this, but can't you write off your business debt or declare bankruptcy on it? It seems like a huge burden to have to pay for in addition to your normal bills.

 

[annsteere]

Our goal is 1 million, but will likely be between 500 and 700k. We have taken some huge financial hits the last 8 years or so. We will have no mortgage, and I know we can live simply because we already are. I'm concerned, but realistically know that we can't get to the million mark in 15 years.

Our secondary goal is to retire with no debt at all, not even car loans. This I know we can do.

This I can relate to. Reading this thread I thought "these people are WAY outside the average." Your numbers seemed so high. I was impressed with you and depressed about us. Maybe the difference is the distinction between what you'd like to have and what you really will have.

If numbers like 3 million really are what you will have, I applaud you.

Having the economy tank when we were both 58 and then having DH hit major medical issues, our reality will be nothing like that.

 

[dvcgirl]

This I can relate to. Reading this thread I thought "these people are WAY outside the average." Your numbers seemed so high. I was impressed with you and depressed about us. Maybe the difference is the distinction between what you'd like to have and what you really will have.

If numbers like 3 million really are what you will have, I applaud you.

Having the economy tank when we were both 58 and then having DH hit major medical issues, our reality will be nothing like that.

Well, I agree...I think that most people only respond to these threads if they are actually saving and investing (and doing relatively well). I too give DisMN a lot of credit for her honesty. And I agree that there are a *ton* of Americans in your boat right now DisMN. A lot of people have lost their small businesses and many older workers are being forced out of their jobs. I'm normally Mrs Personal Responsibility, but you may be forced to file BK and rent in retirement if things don't turn for you. And there's no shame in that. You can only fight it so long, and then you're going to need to protect yourselves.

As for these million+ numbers being "average", no they're not. The Employee Benefit Research Institute has been researching retirement savings for years and years. They calculate the Americans on average will *need* 350K in retirement savings in order to supplement their SS payments. The reality is that most Americans aren't anywhere close to that by the time they retire.

I also think that those of us who are super savers and investors will end up needing to readjust our expectations with respect to returns. We're not going to see the 12% return on investment that is often quoted by financial planners. The reality will be about 1/2 that, and again, only if you're diversified into emerging market funds.

 

[punkin]

Well, I agree...I think that most people only respond to these threads if they are actually saving and investing (and doing relatively well). I too give DisMN a lot of credit for her honesty. And I agree that there are a *ton* of Americans in your boat right now DisMN. A lot of people have lost their small businesses and many older workers are being forced out of their jobs. I'm normally Mrs Personal Responsibility, but you may be forced to file BK and rent in retirement if things don't turn for you. And there's no shame in that. You can only fight it so long, and then you're going to need to protect yourselves.

As for these million+ numbers being "average", no they're not. The Employee Benefit Research Institute has been researching retirement savings for years and years. They calculate the Americans on average will *need* 350K in retirement savings in order to supplement their SS payments. The reality is that most Americans aren't anywhere close to that by the time they retire.

I also think that those of us who are super savers and investors will end up needing to readjust our expectations with respect to returns. We're not going to see the 12% return on investment that is often quoted by financial planners. The reality will be about 1/2 that, and again, only if you're diversified into emerging market funds.

I have and that is why I no longer expect to hit my "magic number". Hopefully what we have will be enough. Otherwise, I'll be a burden to my children in my old age...and I intend to be very crotchety!

 

[nunzia]

Social Security will always be around, but for anyone under 50, it won't be what we expected. Still, the SS issue is relatively easy to fix. Medicare is another story.

Then again, there are going to be an awful lot of disillusioned Americans in the not-too-distant future.

...or in the right now....

 

[dvcgirl]

...or in the right now....

Excellent point. Jobless claims are up again today....hit 500,000 which is a psychological number for the market. If we don't see a true "double-dip" recession we'll be fortunate. The economy is sputtering.

Also, we've been hearing that large corporations are sitting on a record amount of cash (they are). However, the last two days we're seeing what some companies are starting to do with that cash....BHP put in a huge bid for Potash, today Intel is buying McAfee. This might be good for investors of these companies, but this is a net loss for the job picture.

 

[bettymae1121]

I also think that those of us who are super savers and investors will end up needing to readjust our expectations with respect to returns. We're not going to see the 12% return on investment that is often quoted by financial planners. The reality will be about 1/2 that, and again, only if you're diversified into emerging market funds.

One step ahead of you. I've always thought the 10%-12% "average returns" they told us to use in our retirement calculations were pie-in-the-sky. I always use 8% for pre-retirement and 5% for post (because once I'm retired it will all be in bonds, every penny of it). DH and I should hit my $2M magic number (or so close to it it won't matter much) using just 8% as the average annual return.

 

[aboveH20]

For those of you who will be paying off mortgages early or way before retirement, our situation will make you feel even better. My husband just retired after 30+ years in the ministry and living in church housing. We took out our first mortage a month before he retired. Our health insurance premium is even higher than our mortgage payment!

We have been able to save money and I am still working. Unfortunately when it came time to apply for college scholarships for our kids, I think the colleges thought we were saving our money just for them, not for a down payment. We got very little financial aid.

Since we're new at retirement we're still tryng to figure out how much of our invested money we can withdraw without jeopardizing long term needs (like food ).

As long as we can afford our "renewal" trips to WDW I guess life is good.

 

[punkin]

For those of you who will be paying off mortgages early or way before retirement, our situation will make you feel even better. My husband just retired after 30+ years in the ministry and living in church housing. We took out our first mortage a month before he retired. Our health insurance premium is even higher than our mortgage payment!

We have been able to save money and I am still working. Unfortunately when it came time to apply for college scholarships for our kids, I think the colleges thought we were saving our money just for them, not for a down payment. We got very little financial aid.

Since we're new at retirement we're still tryng to figure out how much of our invested money we can withdraw without jeopardizing long term needs (like food ).

As long as we can afford our "renewal" trips to WDW I guess life is good.

Oh yes. I hear you. No financial aid for my child either. I was shaking when I wrote that first tuition check this month.

 

[wdwfan16]

One step ahead of you. I've always thought the 10%-12% "average returns" they told us to use in our retirement calculations were pie-in-the-sky. I always use 8% for pre-retirement and 5% for post (because once I'm retired it will all be in bonds, every penny of it). DH and I should hit my $2M (or so close to it it won't matter much) using just 8% as the average annual return.

We are even more conservative. We run our numbers with 6% and 4% and should hit our income we want (without SS) when we retire.

 

[tinkarooni]

Oh yes. I hear you. No financial aid for my child either. I was shaking when I wrote that first tuition check this month.

I would love to know what college tuition "really" costs...can you or somebody give me an idea of a yearly cost for a realistic school. I know we won't get financial aid, and I'm trying to get some handle on what we will need to save just for college. It's so hard to know what to save for first although we pretty much are just saving saving saving and hoping there will be enough to go around.

 

[eliza61]

I would love to know what college tuition "really" costs...can you or somebody give me an idea of a yearly cost for a realistic school. I know we won't get financial aid, and I'm trying to get some handle on what we will need to save just for college. It's so hard to know what to save for first although we pretty much are just saving saving saving and hoping there will be enough to go around.

Oh tink,
it can run the gamut. so here's a few tips that help me. My oldest son will be a sophmore and we get no financial aid. His freshman year he got a few small scholarships.

First, we tried to narrow down what type of school he would thrive in (he's a asperbergers kid so he definitely needed small) . Then we visited or got information on a variety of schools 2 year, 4 year in state and otu of state. After we got all the tuitions and book fees and living expenses estimated. we sort of calculated what we could afford and still save for retirement.

That being said, my son is at Marshall (out of state) in Huntington WV. Last year tuition/room and board ran us 18K. out of pocket incidentals ran another 2K.

I'm offically living off of ramen noodles and rice.

My youngest starts college in 2 years so we will have 1 year with 2 college tuitions.