My parents retired with about $500k total. Dad now drives a school bus to stay engaged and active (and needed) plus social security they make do with $100k/year which is ample for their needs.
How did/will you make your decision to retire? SIAP
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Last: 1 mo ago by DannyDuberstein
So we should expect 75% or more of retirees to be homeless soon. Less than 5% of retirees have $1MM.
Maybe you'll be proven right but I'm seeing people living the youth of their senior years to the fullest. Since the community is so large there's a significant group of people that are nearing the end of their lives and they'll still here and haven't experienced a woof moment but maybe we're not as smart as you.
Maybe you'll be proven right but I'm seeing people living the youth of their senior years to the fullest. Since the community is so large there's a significant group of people that are nearing the end of their lives and they'll still here and haven't experienced a woof moment but maybe we're not as smart as you.
jja79 said:
So we should expect 75% or more of retirees to be homeless soon. Less than 5% of retirees have $1MM.
Maybe you'll be proven right but I'm seeing people living the youth of their senior years to the fullest. Since the community is so large there's a significant group of people that are nearing the end of their lives and they'll still here and haven't experienced a woof moment but maybe we're not as smart as you.
I'm not saying I'm smarter than anyone else and I'm not questioning people's happiness and living their lives.
I'm simply plugging numbers into the financial models and the models say, yes, a hell of a lot people are going to run out of money depending on how much they have and what their age is. It's math.
Rolling with only $1M at 68 (as an example) scares the hell out of me. I'm admittedly a conservative person and my housing costs make that number untenable so it's not remotely enough in my world. That's why I'm asking about ages and knowing annual expenses.
How long does your money really need to last? How many people over 80 need more than social security?
AggieT said:
How long does your money really need to last? How many people over 80 need more than social security?
Yeah, could be valid.
YouBet said:AggieT said:
How long does your money really need to last? How many people over 80 need more than social security?
Yeah, could be valid.
Valid point. My mom did spend $10k a month on Memory Care for her husband in his final stages of dementia. Healthcare could eat your lunch.
Lot of great points and conversation through this entire thread. Wishing all a healthy and happy retirement, how ever that looks for you.
Yes, this is the other thing that resides in the background.
Cost $8K per month to house my FIL in memory care. Three years. That's $300k (rounded up)burned in just three years almost all out of pocket.
Cost $8K per month to house my FIL in memory care. Three years. That's $300k (rounded up)burned in just three years almost all out of pocket.
Maybe? I have no idea, but I've never known anyone of that age that spends any significant amount of money. Maybe for a high end retirement spot? I'll jump off a mountain before I check into any nursing home I've visited.
I'm 47, and would like to be done at ~55 once my kids are off the payroll. I just have no idea of what it actually costs to do that. We generally live below our means, and our main expenses involve our kids. We spend a lot, but also save a lot. I'm sure we'll hit it hard once we retire, but assume that slows down quite a bit by 70 if we're lucky.
Edit- your comments on illness or memory care are valid.
I'm 47, and would like to be done at ~55 once my kids are off the payroll. I just have no idea of what it actually costs to do that. We generally live below our means, and our main expenses involve our kids. We spend a lot, but also save a lot. I'm sure we'll hit it hard once we retire, but assume that slows down quite a bit by 70 if we're lucky.
Edit- your comments on illness or memory care are valid.
It's just a budget exercise of which I have spent a lot of time doing. Your spending should certainly drop (in theory) when the kids are off payroll, but it's hard to project forward what that might look like.
For us it's a little easier because our fixed costs are well established and then it becomes how much can we cut variable costs. Our fixed costs (housing) are high and I have our annual budget projected to 90 years of age with annual inflation and a host of other assumptions I do on my own, plus running everything through our FA and other models.
What I haven't done is discount variable spending in that last decade back to your point but I would also rather be conservative and assume the worst.
For us it's a little easier because our fixed costs are well established and then it becomes how much can we cut variable costs. Our fixed costs (housing) are high and I have our annual budget projected to 90 years of age with annual inflation and a host of other assumptions I do on my own, plus running everything through our FA and other models.
What I haven't done is discount variable spending in that last decade back to your point but I would also rather be conservative and assume the worst.
jja79 said:
Per the Federal Reserve data the median savings for retirees 65-74 is $200K. Edward Jones says the average in this age range is $609,000.
The youngest guy in our group is 65 and the oldest 77. I'm 68.
You may think it's catastrophicly low but I'm watching it play out with no problems for real people. There's Texags rich and real life. As I said this isn't a criticism of anyone working on a bigger pile but I'm out here seeing people who are the happiest I've ever been around.
I gave up my All American Club tickets, Houston Oaks and Traditions memberships so my carrying costs went way down. We pay $2K/year and play 200 or so rounds so do the math. We go to midweek MLB day games, so we pay hardly anything. I'm 2.5 years into living here, 14 months retired and I've found being in more control of spending is the key.
I'm sorry I missed it. Where do you live?
Obviously everyone's cost of living is different...and sometimes much different. Mine is relatively high right now, but hoping to significantly lower that when kids are out of the house. Much harder to do with a spendy spouse though.
Rearding the age discussion, my dad is a relatively healthy 80 year old who used to travel, eat out, hunt, fish, etc...and that is all sort of come to a screetching halt over the last few years even though he's relatively healthy. So I can definitely see the cost of living dramatically dropping at that point (although I hope I live as long and longer and still doing all the stuff I love).
At 52 (kids out of the house when I'm 60), this discussion is really interesting/helpful.
Rearding the age discussion, my dad is a relatively healthy 80 year old who used to travel, eat out, hunt, fish, etc...and that is all sort of come to a screetching halt over the last few years even though he's relatively healthy. So I can definitely see the cost of living dramatically dropping at that point (although I hope I live as long and longer and still doing all the stuff I love).
At 52 (kids out of the house when I'm 60), this discussion is really interesting/helpful.
I'm a ways off from retirement as I'm 38.
But can't help but think this "I was able to retire with less than $1mm" argument is going to be similar to the "I was able to buy a house with one income, quit buying coffees" one.
That said, we have a number in mind and are on a current projection to be at it when our 1 year old graduates high school. Obviously a lot can change but we're hoping to retire shortly after they go to college.
But can't help but think this "I was able to retire with less than $1mm" argument is going to be similar to the "I was able to buy a house with one income, quit buying coffees" one.
That said, we have a number in mind and are on a current projection to be at it when our 1 year old graduates high school. Obviously a lot can change but we're hoping to retire shortly after they go to college.
The current group of retirees is not a great baseline given the massive bull market. Anyone living modestly with anywhere near $1mm could easily live off social security and their returns. Someone above nailed it, which is sequence of returns risk. Plop that same retiree in 2006 and then check on them over the next 7 years. You're about to see your nestegg shrink by 30-40% quickly and not return for 6 years - whatever is left of it at least after you spend that time dipping into it. Much tougher row to hoe.
Yes, people retire with little to nothing. But many if those are also the ones that spend their last days in some of the most depressing nursing that medicare will cover; those homes are even in suburbia. Some have to move in with family.
Yes, people retire with little to nothing. But many if those are also the ones that spend their last days in some of the most depressing nursing that medicare will cover; those homes are even in suburbia. Some have to move in with family.
I'd also add that for someone who is 70, $1 million bucks right now is worth a miliion bucks. But if you are 50, when you're 70, that equivalent # is going to be $1.8 million at 70 assuming 3% inflation. If you're 40, that's $2.5 million at 70 to equal what a million is now. So to a 40 year old, at 70, it will take $5 million to get you what $2 million would today. Doesn't seem like such an outrageously texags rich # anymore when you consider that. Many of us are talking two different periods in time where the value of a dollar is much different
I think one big difference in the numbers here vs sub$1mm retirement is factoring in SS.
The vast majority that are in the 50s and younger on this board are not factoring it into their plans. If you're at SS age today, you have a pretty good bet.
While it's not necessarily huge, it is a very significant portion of spend. It doesn't help with an early retirement completely but factoring it into models can swing a retirement date by years.
I personally am planning my early retirement without SS in the numbers, but have a couple extra columns in my spreadsheet to forecast with SS. Still 7-10 years out without SS, With SS pushes up another 2 years. However, that would still leave up to 20 years before max SS age for political climates to shift, so I just use the safe road, and my kids get more help down the road if SS works out.
The vast majority that are in the 50s and younger on this board are not factoring it into their plans. If you're at SS age today, you have a pretty good bet.
While it's not necessarily huge, it is a very significant portion of spend. It doesn't help with an early retirement completely but factoring it into models can swing a retirement date by years.
I personally am planning my early retirement without SS in the numbers, but have a couple extra columns in my spreadsheet to forecast with SS. Still 7-10 years out without SS, With SS pushes up another 2 years. However, that would still leave up to 20 years before max SS age for political climates to shift, so I just use the safe road, and my kids get more help down the road if SS works out.
DannyDuberstein said:
I'd also add that for someone who is 70, $1 million bucks right now is worth a miliion bucks. But if you are 50, when you're 70, that equivalent # is going to be $1.8 million at 70 assuming 3% inflation. If you're 40, that's $2.5 million at 70 to equal what a million is now. So to a 40 year old, at 70, it will take $5 million to get you what $2 million would today. Doesn't seem like such an outrageously texags rich # anymore when you consider that. Many of us are talking two different periods in time where the value of a dollar is much different
Thanks for the buzzkill
Arizona
I wasn't talking about what I have. I'm giving my real life experience living with thousands of retirees, the majority of whom have <$1MM and are doing fine. Much less than 5% of retirees nationwide have $1MM or more.
I worked in banking forever and saw high income people barely surviving. It's the spending that's key.
I worked in banking forever and saw high income people barely surviving. It's the spending that's key.
10andBOUNCE said:DannyDuberstein said:
I'd also add that for someone who is 70, $1 million bucks right now is worth a miliion bucks. But if you are 50, when you're 70, that equivalent # is going to be $1.8 million at 70 assuming 3% inflation. If you're 40, that's $2.5 million at 70 to equal what a million is now. So to a 40 year old, at 70, it will take $5 million to get you what $2 million would today. Doesn't seem like such an outrageously texags rich # anymore when you consider that. Many of us are talking two different periods in time where the value of a dollar is much different
Thanks for the buzzkill
LOL, sorry. Just something we all have to consider. That said, your salary and existing savings should benefit from that same push to help get you there anyway
I've always really appreciated the perspective of people who are near or at where I want to be someday. I call it wisdom. I'm 54 and sincerely thank you for sharing what you see and experience.
Anyone on here deal with an overweighted company stock situation?
Any opinions on stock exchange funds (I'm not a fan but willing to be wrong)?
Any opinions on stock exchange funds (I'm not a fan but willing to be wrong)?
I think a good way to look at the "can I afford to retire" question is through an income lens. A lot of good info has been shared on here, and it DOES come down to how much you plan to spend during retirement. A simplified example:
A couple has decided they can retire on $100,000 a year income, all in. They have $1 million in IRA assets.
Social Security: For simplicity, let's say they get $40,000 a year from SS (probably more).
Pension: Let's say together, they get $30,000 a year in pension income.
IRA withdrawals: At the common benchmark of 4% withdrawals, they're producing $40,000 a year in income.
Therefore, their annual income is $110,000, which is more than enough to support their chosen expenditures each year (on a measly $1 million of assets ). You can obviously scale the above numbers to reach your own asset levels.
In addition to the above, if they have home equity, that can be accessed if the sequence of returns risk is too much to support their income needs (or they can always scale back their desired income, if they're willing to do it). Inflation is not factored in above, but the $1 million in assets should at least partially protect against inflation, depending how it's invested (I'd want at least 60%+ in equities). Health care should be included in the $100k spend, but long-term-care policies might be prudent to supplement the later years' income needs. Inheritance can be looked at as "whatever is left over" or by purchasing life insurance to provide a floor of benefits provided when both die.
Bottom line is you CAN survive on a million at retirement, if you can live on a $100,000 a year budget. Solving for Income is an important way to look at the equation, and makes sense to most people.
A couple has decided they can retire on $100,000 a year income, all in. They have $1 million in IRA assets.
Social Security: For simplicity, let's say they get $40,000 a year from SS (probably more).
Pension: Let's say together, they get $30,000 a year in pension income.
IRA withdrawals: At the common benchmark of 4% withdrawals, they're producing $40,000 a year in income.
Therefore, their annual income is $110,000, which is more than enough to support their chosen expenditures each year (on a measly $1 million of assets ). You can obviously scale the above numbers to reach your own asset levels.
In addition to the above, if they have home equity, that can be accessed if the sequence of returns risk is too much to support their income needs (or they can always scale back their desired income, if they're willing to do it). Inflation is not factored in above, but the $1 million in assets should at least partially protect against inflation, depending how it's invested (I'd want at least 60%+ in equities). Health care should be included in the $100k spend, but long-term-care policies might be prudent to supplement the later years' income needs. Inheritance can be looked at as "whatever is left over" or by purchasing life insurance to provide a floor of benefits provided when both die.
Bottom line is you CAN survive on a million at retirement, if you can live on a $100,000 a year budget. Solving for Income is an important way to look at the equation, and makes sense to most people.
I was pretty psyched about being single and retired because you can control your own life and date whenever you want and travel whenever you want...
only to then watch these interviews with Bruce Willis's wife where she discusses early onset dementia.
yet another thing to worry about!! how do you know you are getting dementia if someone is not living with you?
only to then watch these interviews with Bruce Willis's wife where she discusses early onset dementia.
yet another thing to worry about!! how do you know you are getting dementia if someone is not living with you?
Working our way towards 200 round for the year and an average cost of $10 round.
LMCane said:
I was pretty psyched about being single and retired because you can control your own life and date whenever you want and travel whenever you want...
only to then watch these interviews with Bruce Willis's wife where she discusses early onset dementia.
yet another thing to worry about!! how do you know you are getting dementia if someone is not living with you?
Will it matter?
Much respect to the dude playing with no legs.
txaggie_08
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Bad camera work by me.
I had a chat with a dude 10 years ago in Park City, UT that went like this:
Dude: (I had a Ping visor on) did we play golf yesterday?
Me: Nah, but I do like golf!
Dude: my bad. How's it going?
Me: Great! Rode mountain bikes all day! What's your story?
Dude: retired 21 years ago. Ski 100 days a year and play 100+ rounds of golf a year. 20 YEARS IN A ROW!!
Me: (thinking this guy is my hero) Heck yeah brother!
My friends tell me that will be me in 25 years. Sure hope so!
Dude: (I had a Ping visor on) did we play golf yesterday?
Me: Nah, but I do like golf!
Dude: my bad. How's it going?
Me: Great! Rode mountain bikes all day! What's your story?
Dude: retired 21 years ago. Ski 100 days a year and play 100+ rounds of golf a year. 20 YEARS IN A ROW!!
Me: (thinking this guy is my hero) Heck yeah brother!
My friends tell me that will be me in 25 years. Sure hope so!
Important to note that good life doesn't cost much money. A few illustrations:
jja79 said:
I wasn't talking about what I have. I'm giving my real life experience living with thousands of retirees, the majority of whom have <$1MM and are doing fine. Much less than 5% of retirees nationwide have $1MM or more.
I worked in banking forever and saw high income people barely surviving. It's the spending that's key.
Totally agree. Guess I just need more to spend than $1M. Margin of error is way too large at that number (again, depending on your age).
At what age are people taking their social security? By my calculations, at 62, I would get about $32K a year. If I wait till 65 that goes up to $41K. I see no reason to start drawing it out at 62? I could work an easy/no stress part time job and earn $32K a year. I'm thinking that I have no reason to start drawing SS till I absolutely need to. If I'm not drawing down my retirement accounts in my early 60's and still living comfortably, is there a reason to start drawing it earlier than needed other than worrying that it might not be there at some time in the future?
My understanding is that the math really depends on how long you think you'll live.
If you take it at 65, and die at 67, you would have been better off taking it early.
If you live until 90 then deferring is more beneficial.
Hard to know when you have to make that decision.
If you take it at 65, and die at 67, you would have been better off taking it early.
If you live until 90 then deferring is more beneficial.
Hard to know when you have to make that decision.
“There is no red.
There is no blue.
There is the state.
And there is you.”
“As government expands, Liberty contracts” - R. Reagan
There is no blue.
There is the state.
And there is you.”
“As government expands, Liberty contracts” - R. Reagan
Quote:
At what age are people taking their social security?
I think about that way more than I should. I follow a financial guy I really like who strongly advocates for taking it early no matter what. I understand his point but not sure I'll do that.
I believe my breakeven ages are 77 (claiming at 62 vs 67), 79 (claiming at 62 vs 70) and 81.5 (67 v 70).
No hard and fast rule on that one. Tax planning is a key factor. RMDs come into play in your 70s, so depending on how significant your 401k/IRA balances, your total income (with social security) could throw you into a high enough bracket to where you would have been better off collecting a lower amount for 2-5 years longer. Or as mentioned above, maybe you are someone with a health issue that doesn't expect to live to a ripe old age. I think many would benefit from waiting, but that's not an assumption that goes for everyone
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