How much is enough to retire?

Sippican said:
one number you can't fit into any equation to figure out if you have enough...when you will die.
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Yes this number sure makes a difference and not knowing it is frustrating. Though knowing it would probably indicate some really bad news.

Before I retired the company I worked at had retirement topic webinars, and one of them taught that people need to have 5 years more money than they think they will need, in order to have the confidence to spend what they can afford in retirement.

I just can't figure out what the base number is. According to the Social Security website, a woman my age can expect to live to age 88, so if I add 5 years to that it would be 93. But, otoh I've read that genetics is the biggest factor in life expectancy and when I add up my parents and grandparents ages at death (and add in some years to compensate for a couple of them smoking), it seems like genetically I only have until 79 yr as my life expectancy. Maybe I can add a couple years for being female and for improvements in health care, but that just ups it to 83.

So I think realistically 88 yrs would include the 5 extra years recommended by the webinar.

Gee, maybe I should go to Amazon and order that fan I wanted.
 
Nemo2 said:
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.
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First, I was using 5M as a easy to manipulate example. I don't have 5M, either!

I think lots of people are led to believe that at retirement, all of a sudden you enter a golden era where you no longer deny yourself the things you excluded when younger. This is how my brother thinks, it looks like.

But for me I've never been comfortable spending money and for many years made a sort of a game in how not to spend money. After a while the game becomes more satisfying than acquiring stuff, so it becomes a positive feedback loop.

But you sorta have to be into self-denial to start with, or it would be too hard.

Yes! I like to run a monthly surplus!!! It doesn't always happen, but I *like* it.

I'm happy, my wife says and acts like she is too, and you folks sound happy.

More power to you!!!
 

Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement lifestyle?

We have one daughter. I was almost 50 when she was born and by then I had lived the life of a childless old male, and had been fairly self-indulgent, within reason.

So after she got going I wanted to get the best life-toolkit for her (carefully selected private college prep K-12--I tool 4 years selecting and treated it as if I were taking an investment position in her name), then get her thru college with no debt.

This is all done.

Then I wanted to increase/enhance our own financial position without increasing personal expenditures other than for inflation. Happily, my wife seems to be on board with this.

Finally, we set up an estate strategy that made sense, spent perhaps a year at it. I'm fairly pleased with it--any substantial improvements would require us to move from a tenancy-in-common state to a community property state.

These kinds of considerations have really dictated how I'm living right now, which is to try to continue to expand our financial positions.
 
Sawfish said:
Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement lifestyle?
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I've been divorced once, widowed once.......never had kids, never wanted kids......now, thanks to my supervisor, (the love of my life), I have 5 granddaughters whom I adore. If the proverbial nest egg continues to appreciate, once we're gone they, and everyone else in our will, are welcome to it. (We're unlikely to come knocking on their doors asking for it back.)

We don't spend, not because we're misers and deny ourselves, and not because we're saving it for others, but because there's generally nothing we want......and if we ever do want something, we get it.......rare occasions.
 
NorthernLight said:
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!
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Money is the lubricant of life
 
Sippican said:
Sounds like you are living the life most folks dream of!
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I mistakenly made it sound different than it is. We watched our spending all of our lives, if we wanted a vacation or to buy something we planned and saved for it. After over 50 years of living like that, it has become our preferred way of living. Therefore, when we retired nothing changed, we know how much we spend and have emergency money set aside for unexpected problems including health issues. We are comfortable and have only the limitations we have always had...it works very well for us.
 
Sawfish said:
Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement lifestyle?

We have one daughter. I was almost 50 when she was born and by then I had lived the life of a childless old male, and had been fairly self-indulgent, within reason.

So after she got going I wanted to get the best life-toolkit for her (carefully selected private college prep K-12--I tool 4 years selecting and treated it as if I were taking an investment position in her name), then get her thru college with no debt.

This is all done.

Then I wanted to increase/enhance our own financial position without increasing personal expenditures other than for inflation. Happily, my wife seems to be on board with this.

Finally, we set up an estate strategy that made sense, spent perhaps a year at it. I'm fairly pleased with it--any substantial improvements would require us to move from a tenancy-in-common state to a community property state.

These kinds of considerations have really dictated how I'm living right now, which is to try to continue to expand our financial positions.
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I have 3 boys. All in their 30's and successful.
They always tell me to spend my money and don't worry about them.
So, when it comes to leaving a financial legacy, it will be towards my grandchildren. Making sure that my Trust spells out exactly when and how they can withdraw funds.
 
Timewise 60+ said:
I mistakenly made it sound different than it is. We watched our spending all of our lives, if we wanted a vacation or to buy something we planned and saved for it. After over 50 years of living like that, it has become our preferred way of living. Therefore, when we retired nothing changed, we know how much we spend and have emergency money set aside for unexpected problems including health issues. We are comfortable and have only the limitations we have always had...it works very well for us.
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Yes.

We never were spontaneous or impulsive, and it's still the same.
 
Sippican said:
I have 3 boys. All in their 30's and successful.
They always tell me to spend my money and don't worry about them.
So, when it comes to leaving a financial legacy, it will be towards my grandchildren. Making sure that my Trust spells out exactly when and how they can withdraw funds.
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If I may ask: where is the Gold Coast you referred to?

I used to live on the central coast of CA, near San Luis Obispo. This region called itself the Gold Coast, but the only rock was Morro Rock, so you must be talking about another place.
 
Sawfish said:
Let me ask: how many here have kids and if so, to what degree does the desire to leave a financial legacy to them affect your retirement lifestyle?
Click to expand...
I bought a life insurance policy so my daughter would have "something." Some time later, I couldn't afford the payments any more. But she was already doing waaaay better than me.

I wrote a will once, when I was living with someone, so that he would get all the household goods. The executor would get everything else, which would barely cover the inconvenience and labor.

I haven't written another will, as anything left would just be paperwork, an old car, and other hassles. I can't think of anyone I'd want to burden with that.
 
Sawfish said:
If I may ask: where is the Gold Coast you referred to?

I used to live on the central coast of CA, near San Luis Obispo. This region called itself the Gold Coast, but the only rock was Morro Rock, so you must be talking about another place.
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The Gold Coast is a metropolitan region south of Brisbane on Australia’s east coast. It's famed for its long sandy beaches, surfing spots and elaborate system of inland canals and waterways. Many wineries in the area.
 
Sawfish said:
If I may ask: where is the Gold Coast you referred to?

I used to live on the central coast of CA, near San Luis Obispo. This region called itself the Gold Coast, but the only rock was Morro Rock, so you must be talking about another place.
Click to expand...
Oh, and the Rocks....is a section of Sydney that is a favorite area for bars and clubs. Back in the day, its where the first inhabitants landed there and were also called aboriginals. I mentioned in my response because the writer was from Australia.
 
HoneyNut said:
Yes this number sure makes a difference and not knowing it is frustrating. Though knowing it would probably indicate some really bad news.

Before I retired the company I worked at had retirement topic webinars, and one of them taught that people need to have 5 years more money than they think they will need, in order to have the confidence to spend what they can afford in retirement.

I just can't figure out what the base number is. According to the Social Security website, a woman my age can expect to live to age 88, so if I add 5 years to that it would be 93. But, otoh I've read that genetics is the biggest factor in life expectancy and when I add up my parents and grandparents ages at death (and add in some years to compensate for a couple of them smoking), it seems like genetically I only have until 79 yr as my life expectancy. Maybe I can add a couple years for being female and for improvements in health care, but that just ups it to 83.

So I think realistically 88 yrs would include the 5 extra years recommended by the webinar.

Gee, maybe I should go to Amazon and order that fan I wanted.
Click to expand...
Live your best life, everyday, because you never know if there will be a tomorrow.
Every morning when I wake, I put my two feet on the floor and think. God has a plan for me because he let me wake up today and move under my own power. How lucky we all are to say that and yet we take it for granted sometimes. Some people would give anything to be able to do that every day.....Live your best life.
 
I suggest you go to early-retirement.org. They have a program called Firecalc that is very good.
 
The question of how much is enough is like asking how long is a rope …

for one thing how much your draw rate will be is a major factor .

we have had 122 rolling 30 year retirement periods to date .

over 60% have failed trying to use just fixed income at a 4% inflation adjusted draw .

that is an awful success rate .

so if someone is using no equities or little equities they need to reduce that draw .

it can mean as much as a 25% pay cut if one has to go to 3% draws instead because they want to use only fixed income .

you need at least 35% equities to get at least a 90% success rate of lasting 30 years to draw 4% inflation adjusted .

unless one is going to stick to a lower draw rate making inefficient use of the money one worked so hard to accumulate by using only fixed income , it is recommended that one at least goes to at least 35% equities so they can safely draw 4% inflation adjusted as a minimum


here is a chart of draw vs allocation


i-SSMXJ5L-XL.jpg
 
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here are the firecalc results for a 500k savings with just fixed income , spending 20k a year inflation adjusted from the portfolio.

you want at least a 90% success rate .

this is only the portion the portfolio can contribute, all other income gets added to it .

you can see it has failed miserably already over and over

FIRECalc Results​

Your spending in every year after the first year will be adjusted for inflation, so the spending power is preserved.



FIRECalc looked at the 122 possible 30 year periods in the available data, starting with a portfolio of $500,000 and spending your specified amounts each year thereafter.

Here is how your portfolio would have fared in each of the 122 cycles. The lowest and highest portfolio balance at the end of your retirement was $-258,780 to $1,174,787, with an average at the end of $95,698. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 64 cycles failed, for a success rate of 47.5%.
 
With the Federal Reserve System's unconstutional so-called "dollar" fiât currency, (debased 98% since Fed création, 1913), I expect huge continuing future dollars debasement.

The interest on the 30...100 T$ (largely unreported) US government debts will consume all taxes paid in by 2035. Essentially, the USA is already insolvent.

I Suggest Real estate, physical assets, certain collectables may be better to hold than dollars denominated assets like cash, stocks, REIT, etc. for preservation of future retirement savings.

THIS IS NOT FINANCIAL ADVISE!!! PLEASE Consult your financial advisor....
Bon courage

Jon
an optimist in the nuclear age




j
 
Actually if you take the value of everything in this country and look at it as what we owe is a mortgage on it , you would find we actually come in with less debt as a percentage then most Americans do with their mortgage
 

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