Throughout my years on AN, I have often come across discussions about salary, quality of life, saving habits, spending habits, definitions of luxury and wealth, etc. In those threads, I frequently read posts from some members who state that they have already saved so wisely that they are pretty sure that they will be able to retire "comfortably." Others haven't gotten there yet, but feel confident that with their current financial habits, they will absolutely get there.
Knowing there is no one definition of "enough" or "comfortably," I still wonder what the general consensus is.
How much do you need in your retirement account to feel confident in a comfortable retirement, and at what age do you plan to completely retire?
I don't see any retirement. I hope i go quickly, as i cant see doing this job at 70,much less 55. My husband lost all of his 401k in 2008, so he will have nothing, and I'm picking up the daily living slack, so can't save enough to matter. So hopefully quick and easy.
LOL, @martymoose, your reason for edit above: "can't tupe."
Yes, the whole 401K thing is scary, because the employee has no control over how it is invested. If it is not invested well, or the entity in charge of it does illegal things, etc., the employee is screwed. That's why I've always felt so lucky that DH and I are in charge of our own retirement account. At least if we mess it up, it's something WE did or didn't do, not that we were powerless victims of someone else's unwise or unethical behavior. Feeling in control of one's own destiny is a wonderful thing, even if it's not 100% the case.
For me, it's sort of like flying. I'm terrified, because I have absolutely zero control of the situation. I don't feel terrified while I'm driving. I feel like I have a whole lot of control of the situation, even though that's not entirely true and the statistics show that car travel is much more dangerous than air travel. In all matters in our lives, whether it be financial, personal, medical, etc., feeling like one is in control has a lot to do with personal happiness or anxiety levels.
Retire ASAP. For me, 55ish. I figure debt free and 2 million in liquid cash will allow me to live off of 80K a year. 1 million liquid cash will give me 40k a year. So 1.0 - 1.5 million and no debt. I'll be living the dream. Of course as a working RN (12 hour shifts), I'm pretty much living the dream already.
It's probably easier to start out with a leg up. But it's also possible to start at the rear of the pack and still come out ahead or at least farther up front than dead last.
Work hard, live frugally, budget everything, say no to just about everything, pay yourself first.
work extra hours, work 2 and 3 jobs. Hold Rent Parties. Learn to fish. Get cheap cuts of meat, and day old produce and bread, 2nd hand clothes, use food pantries. Sew for others, walk pets, run errands for others, just do everything you can possibly do to make a buck.
Stop feelihg sorry for yourself.
I know those people. We all take care of them. They usually die (or get disabled sick) about a year after they retire. They all say the same thing. "I should have traveled more, I should have spent more time with my friends and family. I should have lived more." Never have I heard anyone say, "I should have worked more."
I know those people. We all take care of them. They usually die (or get disabled sick) about a year after they retire. They all say the same thing. "I should have traveled more, I should have spent more time with my friends and family. I should have lived more." Never have I heard anyone say, "I should have worked more."
Valid point ... but that's no reason not to plan and save some money. There is a reasonable "happy medium" that can be found.
The people who frustrate me are the ones who are saving very little and counting on "society" (i.e. younger people and those who have been savers) on bailing them out and supporting them when they get old/infirmed and can't work. "I'll worry about that when the time comes," is just a more socially acceptable way of saying that they are planning for us hard working people to pay their bills for them.
My sister retired early and lives an expensive lifestyle. When she started talking about me moving in with her after I retired to save money, I told her "No way." If she didn't think she would have enough money left when she gets really old, she should stop spending so much on luxuries now -- and stop expecting me to pay her bills someday.
What a lot if people aren't mentioning is long term health care costs. And I wouldn't be thinking about it either except my Mom mentioned one year she paid out $70K for my Dad between rehab and assisted living. One bad hospitalization put him in a WC, gave him C diff, and exacerbated his Alzheimer's. When searching for his last place, a nursing home, I learned to say "private pay", but even then many places didn't have a male bed. There are only so many Medicaid beds a nursing home has to have, and you have to be down to pretty much nothing to be eligible. While everyone thinks they won't ever go into a nursing home, I think I read it's 3 of 4 that will (could be wrong).
Excellent point and why I have an iron clad advanced directive. If it happens I'm headed to the cheapest, most awful nursing home where I hope to quickly get septic and die without anything more than pain meds.
Keep inflation of the money supply in mind. I think inflation runs about 3% per year, at least.
Every time the Fed Res turns on the printing press and our government takes out an interest-bearing loan from them, the value of every dollar and coin drops. It buys less than it did before.
It's such an evil thing to not back up our money with a precious metal. It is backed instead only by air (the full faith and credit of the US government). Well what if people stop having faith in the government?
What really bites about the US borrowing from the private corporation known as the Fed Res is that our Constitution says that CONGRESS has the authority to coin money.
Don't count on having fewer costs in retirement than you do now. I think it's a fallacy to think you'll need only 75% or 80% in retirement of what you currently need. Count on needing as much if not more because of inflation, rising prices, unexpected expenses.
Do go to seminars put on by financial planners, sellers of annuities, stockbrokers, insurers, Social Sec experts, and so on. There often free, they might feed you a meal, you get some valuable information.
I read an interesting thought that while we are encouraged to wait till at least full retirement if not age 70 to claim social security because you get a 7-8% increase each year you delay, that doesn't take inflation into account. Also the SS COLA is not the real rate of inflation especially for older people with the high and increasing cost of healthcare. Plus the cost of medicare increases every year, but if it is taken out of your social security it increases less so as not to harm people on social security.
I'm hoping to retire at 62 and debating whether to take social security then or wait and live off my pension and Roth IRA and 403B. That is what the rich do to maximize their return because they have the ability to hold off, whereas the majority of the population can't afford that option due to lack of savings, layoffs and/or poor health. I'm hoping we'll have expanded medicare if not national healthcare in the next ten years. Health insurance is the biggest reason many people stay in the workforce till 65.
I have to think much of the reason people aren't saving enough now is the expectation that everyone is entitled to everything. Sucks I know, I was raised by poor but hardworking frugal people who taught us to save. Most of the younger people I work with who make far less money live in homes twice as expensive as mine. Twice as nice also, lol, but mine are paid for. I don't get the entitlement, maybe because I never really had much. I don't know. Great thread by the way. :)
I've seen this "entitlement" if you call it that both from people who were poor and also those who grew up in a more affluent middle class. I know some who were so traumatized by feeling poor they went overboard on spending once they got a job and felt the need to make up for what they missed out on back then. Also I've seen the reverse where people who grew up very comfortable try to maintain the same affluent lifestyle their parents could afford when they themselves are making much less and can't seem to accept that reality.
I advocate a middle ground not just saving and being frugal for the sake of it, but also enjoying life and spending money on what you love such as hobbies and travel. I especially believe it is best to travel when you're young and in good health, not postponing it to retirement!
I like the budget of 50% needs, 20% savings and debt repayment and 30% wants. If you want you can always reverse it to 30% savings with 20% wants. There are times needs may be more than 50% such as just out of college in a high cost city or when you have a baby, but having a goal budget helps you at least get in the habit of saving.
I regretted that I was never taught about retirement when I was young, or even just younger. Now that it is too late to do anything about it, I am in the same boat as many. So I gave the talk to one of my grandchildren when they started working. After four years in the workforce and now making only 35 cents less an hour than I did at my first job as a licensed nurse, not one red cent put away toward retirement, or an emergency fund, or a fund for a down payment on a car. This is what raising the generation of entitlement brings forth. It is disheartening to see that one failed on more than one front.
I read an interesting thought that while we are encouraged to wait till at least full retirement if not age 70 to claim social security because you get a 7-8% increase each year you delay, that doesn't take inflation into account. .
I have read intelligent arguments either way but for the me the bottom line is two fold:
1. How much money, time and research do you think was done before offering this "bonus" to those who wait? I would bet my bippy there is no way it works out in favor of the individual in a majority of cases.
2. As I have said ad nauseam I have no intention of lingering and the expenses, sans medical, for those much later in life 80s-90s is reduced. I won't be buying clothes, cars, or probably much else except pudding and bingo cards.
I'm going for whatever paltry check I can get as soon as I am eligible.
I advocate a middle ground not just saving and being frugal for the sake of it, but also enjoying life and spending money on what you love such as hobbies and travel. I especially believe it is best to travel when you're young and in good health, not postponing it to retirement!
.
Excellent advice and this is where I have finally allowed myself to be. I know my 50s-60s will be the best health I will be in until its curtains so now is the time I'm starting to enjoy the fruits of my labor.
What a lot if people aren't mentioning is long term health care costs. And I wouldn't be thinking about it either except my Mom mentioned one year she paid out $70K for my Dad between rehab and assisted living. One bad hospitalization put him in a WC, gave him C diff, and exacerbated his Alzheimer's. When searching for his last place, a nursing home, I learned to say "private pay", but even then many places didn't have a male bed. There are only so many Medicaid beds a nursing home has to have, and you have to be down to pretty much nothing to be eligible. While everyone thinks they won't ever go into a nursing home, I think I read it's 3 of 4 that will (could be wrong).
My plan is to retire when I'm 40 or 45. By then I should have $300-500k in the bank. I may work 6 months a year after that for a year or two and then see if it's sustainable for the long run. I'll likely retire overseas or in Mexico.
Horseshoe, BSN, RN
5,879 Posts
LOL, @martymoose, your reason for edit above: "can't tupe."
Yes, the whole 401K thing is scary, because the employee has no control over how it is invested. If it is not invested well, or the entity in charge of it does illegal things, etc., the employee is screwed. That's why I've always felt so lucky that DH and I are in charge of our own retirement account. At least if we mess it up, it's something WE did or didn't do, not that we were powerless victims of someone else's unwise or unethical behavior. Feeling in control of one's own destiny is a wonderful thing, even if it's not 100% the case.
For me, it's sort of like flying. I'm terrified, because I have absolutely zero control of the situation. I don't feel terrified while I'm driving. I feel like I have a whole lot of control of the situation, even though that's not entirely true and the statistics show that car travel is much more dangerous than air travel. In all matters in our lives, whether it be financial, personal, medical, etc., feeling like one is in control has a lot to do with personal happiness or anxiety levels.