How much is enough to retire?

Sippican

Sippican

Member
Location
South Coast Massachusetts
With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
What are other folks doing, and is it working for you?
 

Hi Sippican, welcome glad you found us
If you look at the' Retirement Thread' on the site ,you will notice a topic called' Financial', you might want to ck out what posters are saying. I've been in the stock market for yrs, my dad started me & my siblings yrs ago. I have a financial /stockbroker been with since '93, very happy with results
You'll meet wonderful group of members from around the world here at SF,cool place to hang out every day
Sue in Buffalo,NY
 
Also, Welcome! You're on the right track.
My personal thoughts are that you need to focus on YOUR retirement needs - not always listen to "the experts." My biggest "Ah Ha" moment came when I began to understand my monthly bills. Those didn't change much from when DH was working and when he retired. Once you understand what you are paying out each month - you need to invest with the understanding that you must create monthly income to cover those expenses - plus a little more (for a rainy day?).
Thus, I waited until FRA (Full Retirement Age) to take my Soc. Sec. - it paid a larger monthly amount than taking it at 62 and we couldn't wait until age 70. I set up several annunities (that lock in at a market high point) to pay monthly - I knew I would not have the discipline to withdraw the right amount by myself. Plus we have an investment account that floats with the market.
So far, we have managed comfortably on SSDI (disability) until age 65, Soc. Sec., a pension payment and an inherited IRA that will pay out for 10 years. For us - it is enough and we should easily cover the expenses of a Continuing Care Retirement Community that we have picked out. Good luck!
 
Myquest55 said:
Also, Welcome! You're on the right track.
My personal thoughts are that you need to focus on YOUR retirement needs - not always listen to "the experts." My biggest "Ah Ha" moment came when I began to understand my monthly bills. Those didn't change much from when DH was working and when he retired. Once you understand what you are paying out each month - you need to invest with the understanding that you must create monthly income to cover those expenses - plus a little more (for a rainy day?).
Thus, I waited until FRA (Full Retirement Age) to take my Soc. Sec. - it paid a larger monthly amount than taking it at 62 and we couldn't wait until age 70. I set up several annunities (that lock in at a market high point) to pay monthly - I knew I would not have the discipline to withdraw the right amount by myself. Plus we have an investment account that floats with the market.
So far, we have managed comfortably on SSDI (disability) until age 65, Soc. Sec., a pension payment and an inherited IRA that will pay out for 10 years. For us - it is enough and we should easily cover the expenses of a Continuing Care Retirement Community that we have picked out. Good luck!
Click to expand...
Thanks for the feedback! Yes, many folks think its about how much money you save. More importantly, is the spending side. Get that under control and that is ore than half the battle.
I got 3 financial advisors. Thinking to whittle it down to one. I'm leaning to the one that understands the retirement path, income, taxes, RMD, etc.
Thanks again for your thoughtful response.
 
Sippican said:
Thanks for the feedback! Yes, many folks think its about how much money you save. More importantly, is the spending side. Get that under control and that is ore than half the battle.
I got 3 financial advisors. Thinking to whittle it down to one. I'm leaning to the one that understands the retirement path, income, taxes, RMD, etc.
Thanks again for your thoughtful response.
Click to expand...
How do you feel about Real Estate Investment Trusts ? I am looking at one based in Quebec ( I live in Canada ) that has been producing 17 percent returns over the last 5 years, but the required investment is $200,000. JimB.
 
Ah, Sippican, I have 2 advisors and have split our accounts between the 2 companies plus our checking & savings with Navy Fed. Credit Union - just in case. (too many stories, along the way, of Advisors taking off with client's money or going under) Don't limit yourself too much - it is their job to know the market and economy. Its good to stay informed.
You're welcome!
 
jimintoronto said:
How do you feel about Real Estate Investment Trusts ? I am looking at one based in Quebec ( I live in Canada ) that has been producing 17 percent returns over the last 5 years, but the required investment is $200,000. JimB.
Click to expand...
Not attempting to offer advice, but the R.E. market, Canada wide, appear to be poised, (if they haven't already started), to pop, and 17% returns make me uneasy. Good luck.
 
Welcome, @Sippican ! I never prepared for retirement, because I thought Prince Charming would take care of such things. I also never made much money.

A few years before I retired, I found out how much the Canadian public pensions amounted to, and it sounded like an awful lot to me. But things changed, and I ended up moving to a "dying" town just to afford rent. I'm doing okay, but things are tight.

Occasionally a young person asks me if I have any advice for them. I tell them to try to put a little money aside, even if it's only 5% of their income.

People say money isn't important, they're happy with this and that. Well, I can't afford this or that!
 
Nemo2 said:
Not attempting to offer advice, but the R.E. market, Canada wide, appear to be poised, (if they haven't already started), to pop, and 17% returns make me uneasy. Good luck.
Click to expand...
This REIT owns commercial buildings across Canada. It trades on the TSX and has done so for 11 years, with consistent annual returns ranging from 12 to 17 percent . JimB.
 
jimintoronto said:
This REIT owns commercial buildings across Canada. It trades on the TSX and has done so for 11 years, with consistent annual returns ranging from 12 to 17 percent . JimB.
Click to expand...
Go for it then, if you think it's a buy.....me, among other things, I'd consider the increases in working-from-home, and shopping online, and how those will impact the commercial R.E. market......I won't even mention 'recession'...(oops, too late).
 
Sippican said:
With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
What are other folks doing, and is it working for you?
Click to expand...
It's an interesting phenomenon that early in life you have a small pile of principal and so to get an *absolute* return that is satisfactory you are looking for a higher rate of return.

But if you have, e.g., 5M out there, a 4.50% rate is just fine to live on and even to marginally expand.

I don't personally mess with stocks/bonds/ETFs/REITs/etc. I do not know enough about it and also would have to keep up with it. The management company does that within a fairly narrow set of goals, which is largely preservation of capital. Schwab private client for most retirement; Ameriprize and Ameritrade for some other account, retirement and post-tax.

We have rental properties, several small apts. These I do keep up with. They give 5-12% cash-on-cash, each starts at the lower figure and often over time increase towards the higher end. Due to changes in landlord/tenant laws it is getting more risky than before, however.

The next round of financing of them will also be a challenge. On average, you are refi'ing or selling every 7-10 years. The longest we've ever held anything is 14 years.

So far it is working...
 
Sippican said:
Thanks for the feedback! Yes, many folks think its about how much money you save. More importantly, is the spending side. Get that under control and that is ore than half the battle.
I got 3 financial advisors. Thinking to whittle it down to one. I'm leaning to the one that understands the retirement path, income, taxes, RMD, etc.
Thanks again for your thoughtful response.
Click to expand...
YES! about watching expenditures!

I'm a life-long tightwad, known by all relatives as being tight with a buck, so I actually *like* that part, but...
 
I planned for retirement but was forced to retire early when the company I worked for shut down when I was 63, my retirement age was 66. After a good review with my financial advisor, we decided to not start SSI until 66. Because I was over 50 the company that shut down gave me a good severance bonus and I had saved money for an emergency over the years. We lived on that money until I turned 66, allowing us to leave our nest egg intact until 66 as planned.

After we retired, we found our expenses really were less than we thought. We found that our SSI and our savings would be enough for us to live on, we did already have our home paid for, so it was just bills, food, and medical and fun money that we needed. It is now 7 years later, and we still feel we are in good shape going forward. We have traveled some and pretty much feel free to do things we enjoy.

Saving for retirement really is important...
 
jimintoronto said:
How do you feel about Real Estate Investment Trusts ? I am looking at one based in Quebec ( I live in Canada ) that has been producing 17 percent returns over the last 5 years, but the required investment is $200,000. JimB.
Click to expand...
17% is a high number. REITS have a place in some portfolios. I had a medical properties REIT. It was ok, but fluctuated way too much on share price for me. I'm going into retirement this year and am looking very conservative going into 2023 with the state of the US economy. A 'required' investment would make me hesitant for a couple of reasons; 1) Why? 2) what is the duration you must hold before you can liquidate?
 
Disgustedman said:
Personally I applaud each person who retires with wealth in a paid off house or more. I wish I'd had you for a guide, mentor or friend.

I might not be in the position I am had we been. Still, congrats of smart investments, good planning and light indulgences.
Click to expand...
Ahhhh, nope, not a paid off house. all 3 financial advisors advised against it. With a 2.75% interest rate and monthly P&E of $866.00, I could get far more on my investments than 2.75%. At anytime I could pay it off, but won't. Let it ride and use the money to make more than the 2.75%.
 
Sawfish said:
It's an interesting phenomenon that early in life you have a small pile of principal and so to get an *absolute* return that is satisfactory you are looking for a higher rate of return.

But if you have, e.g., 5M out there, a 4.50% rate is just fine to live on and even to marginally expand.

I don't personally mess with stocks/bonds/ETFs/REITs/etc. I do not know enough about it and also would have to keep up with it. The management company does that within a fairly narrow set of goals, which is largely preservation of capital. Schwab private client for most retirement; Ameriprize and Ameritrade for some other account, retirement and post-tax.

We have rental properties, several small apts. These I do keep up with. They give 5-12% cash-on-cash, each starts at the lower figure and often over time increase towards the higher end. Due to changes in landlord/tenant laws it is getting more risky than before, however.

The next round of financing of them will also be a challenge. On average, you are refi'ing or selling every 7-10 years. The longest we've ever held anything is 14 years.

So far it is working...
Click to expand...
Sounds like a good plan!
Landlord/tenant laws are the worst. Very difficult to navigate.
I had a tenant once that went as far as they could in the court system. 6 months (this was back decades ago) in the court system and it came down to Sheriffs at the door to move them.
I chuckled from across the street watching the deadbeats loading a sofa on the top of their car, in the pouring rain.
 
Timewise 60+ said:
I planned for retirement but was forced to retire early when the company I worked for shut down when I was 63
Click to expand...
I was forced to continue working until I was 46.......... that was 34 years ago....I'd've preferred never to have started, but I bit the proverbial bullet and stuck it out, (not continuously of course).

We have nowhere near the $5 million that Sawfish mentioned, (I'm not sure I could see it from here even if I stood on the roof)......but we handle our own finances/investments and have never spent more than we bring in, (the Micawber Principle), and generally the outgo is considerably less. We're not spenders, there's basically nothing we want, and we have what we need, but we do like to travel......on our terms...which is close to ground level because that's what we enjoy.......chacun à son goût I guess.
 
Timewise 60+ said:
I planned for retirement but was forced to retire early when the company I worked for shut down when I was 63, my retirement age was 66. After a good review with my financial advisor, we decided to not start SSI until 66. Because I was over 50 the company that shut down gave me a good severance bonus and I had saved money for an emergency over the years. We lived on that money until I turned 66, allowing us to leave our nest egg intact until 66 as planned.

After we retired, we found our expenses really were less than we thought. We found that our SSI and our savings would be enough for us to live on, we did already have our home paid for, so it was just bills, food, and medical and fun money that we needed. It is now 7 years later, and we still feel we are in good shape going forward. We have traveled some and pretty much feel free to do things we enjoy.

Saving for retirement really is important...
Click to expand...
Sounds like you are living the life most folks dream of!
 
I really am just lucky I was raised by my mother. One thing she knew was how to make do. We had little. Good practice for a divorce at 40. I was pretty focused to not be poor. I got my nursing license and the race was on. I do not know much about stocks. Rather terrible at it in fact. No financial advisor. But….I have been lucky in real estate.
 
Sippican said:
With all the articles you read these days, and retirement calculators, there is still one number you can't fit into any equation to figure out if you have enough...when you will die.
I am an active investor in the markets and these days with the craziness of the economy, I find (in opposition of my financial advisors) that safe money is the right choice these days. I'm finding that a 4% return is a good return in these crazy times. So, I'm in Money Markets, and CD's. I'm getting 4.29% in MM, 4.25 & 4.50% in two CD's.
I get it, I may miss the upswing if/when the market turns, but I don't like timing the bottom and would be ok with catching stocks on the upswing.
What are other folks doing, and is it working for you?
Click to expand...

Welcome!

In the last couple of years I too have decided fixed earnings are a better fit for me. I still have a little over 20% of my portfolio in the market but the rest is all fixed interest investments. I may pull that last bit out of the market soon and move it to a fixed earning account, then I will never have to check the ticker tape again!

My thinking at this point in my life is a steady return is so much easier to plan around, and just makes me more comfortable. Honestly if I can keep my money in 3% to 5%
earnings I should be able to live comfortably for the rest of my life.
 

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