What is your retirement number?

[jinkies]

The calculators are really confusing and seem to be all over the place. We are on target to have over 2 million. Calculators are estimating that we should have $3 million in order to not outlive our money, but based on the post above that $3 mill would provide a $120k salary with no draw down, that doesn't seem right? Calculators were saying that I need 3 million even when I said I would only spend $60-75K a year and retire at 67.

In summary: no idea. We'll just do what we can and hope for the best.

[lolalolalola]

I have no idea! The number we need really depends on what age we retire. We don’t know what our annual budget will need to be after retirement either.

[simpsongal]

steamboat185 for 25xs formula, do you adjust for things like a paid off mortgage?

That's the thing I don't have figured out, I wouldn't include daycare, student loans, and mortgage in my retirement budget and those are the large majority of my spending. Yes, there would be medical costs and property taxes...but IDK....I'm team KOKO and divert extra to charity if I way overestimated.

[steamboat185]

Jan 12, 2021 15:07:02 GMT -5 simpsongal said:

steamboat185 for 25xs formula, do you adjust for things like a paid off mortgage?

That's the thing I don't have figured out, I wouldn't include daycare, student loans, and mortgage in my retirement budget and those are the large majority of my spending. Yes, there would be medical costs and property taxes...but IDK....I'm team KOKO and divert extra to charity if I way overestimated.

For us we are assuming that even though daycare and our mortgage will be gone healthcare costs and increased travel will take up any extra. I know other people who use the 25x rule are more optimistic that their spending will drop, but the research we’ve read doesn’t really support that and we’d rather not run out of money or drastically change our lifestyle. We are also expecting to retire by 45 so before Medicare and not on any employer health plan which will be higher medical costs than others.

[archiethedragon]

Jan 12, 2021 14:31:31 GMT -5 jinkies said:

The calculators are really confusing and seem to be all over the place. We are on target to have over 2 million. Calculators are estimating that we should have $3 million in order to not outlive our money, but based on the post above that $3 mill would provide a $120k salary with no draw down, that doesn't seem right? Calculators were saying that I need 3 million even when I said I would only spend $60-75K a year and retire at 67.

In summary: no idea. We'll just do what we can and hope for the best.

Make sure you are accounting for inflation correctly. $3MM today is a lot different than $3MM 30 years from now. And $120k per year today is a lot different than $120k a year 30 years from now.

[mich1]

Our accountant has told us something really interesting. He said in the years that he has been helping people, the one thing that everyone has in common is they always wish that they have more, but usually they don't need more. He said that even though most have budgets that are well within their retirement lifestyles, they always want more. The person who retires with $3 million wishes they have $5 million. Those who retire with $10 million wish they had $15 million.

He also said something else interesting. He said that when many retire, their expenses are as high as they are going to be. As most want to travel, the travel encompasses the vast majority of their retirement income. However, he has said that in the 25+ years he has been advising people, that only ONE of his clients have continued to travel up to her death. He said that by about 80, they tend to hang closer to home and their expenses drop. Observing this from an anecdotal direction, I have watched my MIL pay for expensive Arctic excursions and fully escorted tours, to zip between 72 to 80. My neighbor was providing Tauck with a very good income, until a few years ago. She goes as far as her family in CA now, that's it. The elderly gentleman across the street has hung up his passport too.

We are in our early 60s. The only reason why DH continues to work right now is that his employment gives us access to health insurance that the ACA doesn't. Locally, it sucks and if we lived 100 miles south it would be a whole 'nuther story. So in 2022, he turns 63.5, which gives him the ability to COBRA his way onto Medicare, and the COBRA gives us access to international health insurance. He is using the fact that we have a world cruise scheduled at the end of 2022 to hang up his slide rule.

[scout8]

Significantly less than the numbers mentioned here. Recently we moved and took much lower paying jobs so we are living a bit out of our savings now. We will likely retire in a few years (early to mid 50's) and should have about 1.2M. We will be able to live off of this number because we plan to move somewhere in Latin America with a much lower cost of living. If something changes and we need to stay in the US, that won't be enough money. In that case, we would need to keep working longer, but would probably just work part time. Neither of us are the type that wants to keep working. We are willing to make major changes to our life style/spending habits in order to stop. My calculations do include a small amount of social security, but don't include any potential inheritance, even though we will most likely inherit money.

[tcu2003]

I don’t have this fully flushed out yet, but I think at least $5M in retirements and investments. DH wants to retire at 60 (I will be 55 then), which will be in 15.5 years. So it still seems like so far off, and we have two kids to get through school in the meantime (well, youngest kid would be halfway through college of DH does actually retire after he turns 60). I think I’ll probably keep working at least another year or two after DH, but we’ll see.

Meanwhile, our strategy so far is to just keep maxing out everything we can.

[kadams767]

I don't have a number yet, but I think it's likely lower than most of the responses so far. DH and I apparently are low-spenders, because using that 4% safe withdrawal calculation, our number is less than $1m.

@@ We don't have kids, though, and have no problem with the idea of spending down the principal of our portfolio. That's what it's there for, IMO. I don't want to try and stick to a safe withdrawal rate just to leave the balance untouched for when I die.

[ohgillian]

Jan 12, 2021 17:41:08 GMT -5 kadams767 said:

I don't have a number yet, but I think it's likely lower than most of the responses so far. DH and I apparently are low-spenders, because using that 4% safe withdrawal calculation, our number is less than $1m.

@@ We don't have kids, though, and have no problem with the idea of spending down the principal of our portfolio. That's what it's there for, IMO. I don't want to try and stick to a safe withdrawal rate just to leave the balance untouched for when I die.

@@@

I have 2 kids, but I also have no problem with spending down the principal. I was actually just talking w/my mom about her planning, and she was talking about how much she can spend per year while not using any of her principal. I was like, "Why mom??" 

[sandandsea]

I want my parents to spend all that they have, but I’m not comfortable planning to do so myself. My great grandparents lived to 112, 99, 97 and almost all made it into their late 80s. I don’t want to plan on 100 and then have another decade to pay for. this also accounts for a higher number.

[wanderingback]

I literally have no idea. 

[suzubell]

I have a very generous pension that will pay out 85% of my final salary if I retire at 58, so our number is not nearly as high as others. We would still like to hit $1.5 million or higher, though. We have a son who may need to live with us or be supported by us longterm, so that affects the number.

[chpmnk1015]

I dont know at all.. something i need to figure out though..

[steamboat185]

Jan 12, 2021 18:46:13 GMT -5 sandandsea said:

I want my parents to spend all that they have, but I’m not comfortable planning to do so myself. My great grandparents lived to 112, 99, 97 and almost all made it into their late 80s. I don’t want to plan on 100 and then have another decade to pay for. this also accounts for a higher number.

Same and they needed care for the last few years that was very expensive.

[fryjack2]

We don't have a number because H will never really retire. He never plans to fully stop practicing in some capacity. He's 45.

I am in grad school getting another degree so I imagine I'll be working another 20 years doing something? I'm 41.

We have a good income and aren't huge spenders so I think we should be ok.

We travel a lot now, so our retirement plans don't include saving travel till retirement.

This may be morbid, but I have no desire to live in a nursing home waiting to die, using up funds that my kids or grandkids could use to actually LIVE life. If my quality of life is not one I'd like to keep living, I hope I can do something about it.

[aprilsails]

Right now DH has decided that is $4.5M (CAD). Which is really really high. He is an aggressive saver and we are on track for me to have $1.5M and for him to have $3M in our accounts at 65. For many reasons I think he is being stupid about this and I hope that he eases up on the aggressive saving:
@@@ mentioned
1. I would like to go and do things post Covid. Because of his budget we do not have money to spend on much travel or eating out, etc after we spend money on basics and home improvement upgrades (he has no issue spending 10k on a new fence this year, but god forbid we spend $1k on a weekend to take the kids to the zoo. We also still use the bedroom set his parents bought for him at the age of 5. It’s not a kids set from the time, but it is freaking butt ugly and I hate it. We cannot agree about spending money on a new bedroom set. We’ve been living together for 14 years.
2. We stand to inherit a great deal at some point. I’m obviously hopeful that isn’t until we’re at retirement age or later, and that this money could be earmarked for our children.
3. 6/8 of our grandparents, and both of his parents, have had major health issues between 60-70 which meant that they were unable to travel or even remotely enjoy their retirement. My parents are still in their early 60s and working and seem healthy, but genetics are a bitch. His parents never travelled since his Dad travelled so much for work and hated it, so he doesn’t see the point.
4. He thinks that it is important that we never draw down our retirement savings so we have money to leave for any grandkids. He strongly believes that the cost of living in the world is unsustainable and that we need to set our children and grandchildren up for success now. Basically if we can’t afford to help our kids buy a home, they will never be able to afford it themselves. So his goal is to establish adequate inter generational wealth.

We both make good salaries so this is all attainable. I question though if he will be able to stop trying to make more money and to transition to retirement. His Dad has really failed to do that.

[Wallflower]

Jan 12, 2021 18:35:40 GMT -5 ohgillian said:

Jan 12, 2021 17:41:08 GMT -5 kadams767 said:

I don't have a number yet, but I think it's likely lower than most of the responses so far. DH and I apparently are low-spenders, because using that 4% safe withdrawal calculation, our number is less than $1m.

@@ We don't have kids, though, and have no problem with the idea of spending down the principal of our portfolio. That's what it's there for, IMO. I don't want to try and stick to a safe withdrawal rate just to leave the balance untouched for when I die.

@@@

I have 2 kids, but I also have no problem with spending down the principal. I was actually just talking w/my mom about her planning, and she was talking about how much she can spend per year while not using any of her principal. I was like, "Why mom??" 

I expect I will be spending down the principal but hopefully not until my last years. To my mind, the principal is there to cover the expensive, nursing home years (though I do have long-term care insurance to help).

I haven't set a specific goal but using 25x, it's about 1.5m, which should be doable. I have half that right now and should be able to double it by the time I'm ready to retire. (53 now, would like to retire at 62 but more likely 65.)

[keweenawlove]

Jan 12, 2021 11:55:22 GMT -5 numbers said:

We don't have a magic number.

We're in the "max out 401ks every year and hope for the best" camp.

This is us. In my magical "get a huge amount of money somehow" scenario, 5 M is my number that I would take me to completely "retire" right now. I'm 33, H is 37. Realistically, I'm sure that number will come down when actual retirement becomes more of a reality. 

[Poppy]

Healthcare is such a big wild card. I work for a small company and my boss is transparent about the cost. For family coverage right now it's ~20k for a mediocre plan. I know that our older employees are more expensive to insure. He said this year wasn't bad but in other years the costs have increased more and he expects a big hike next year.

I guess if we're not Medicare age we'll need to take a close look at this and then we'll probably use the 25x method from there.

[Susie]

dup

[Susie]

I don't have any idea. Team max our 401ks and hope for the best, plus H will have a pension if he stays with the state for a very reasonable number of additional years.

[savan]

Jan 12, 2021 14:14:49 GMT -5 noodleoo said:

Jan 12, 2021 11:55:22 GMT -5 numbers said:

We don't have a magic number.

We're in the "max out 401ks every year and hope for the best" camp.

Sort of a related question:  how do you factor possible inheritance?  We are both likely to inherit a decent amount, but have never talked to our parents about it.  I prefer to not count on anything, so we've been saving a ton for a long time.  But then sometimes I wonder, if we are likely to inherit money, it would be nice to know so that we could plan accordingly.  H's parents have also said they want to "help" pay for the kids college but we have no idea how or how much.  

My dad likes to tell me not to worry so much about retirement because I will have a healthy inheritance.  I tell him to spend it all.  For now I'm not factoring any of it.  I have no clue what will happen in the future.  He may need assistance living at the end that will use it all.  We did receive a substantial inheritance from my grandmother this year but we chose to spend it on house projects.  Maybe not the most MM use for it, but I think my grandmother would have approved.

My dad is planning to pay 100% of our kids' college expenses and we have planned for that.  We have nothing set aside for their college.  He started 529s when they were born so we know that money is there and worst case they can get by on partial cash flow and loans like we did.

[sicilygirl]

Our number is around $5M. We are in an HCOL area (SoCal), which plays into that and also want to retire in our early to mid-50s. I'm 36 and H is 35, and we're on track for that to happen but who knows where life will take us. Two years ago, we lived in a completely different part of the country, had different jobs, and our number was much, much lower.

[woowoo]

$2.5 million is our target and we have fallen off the track to meet this right now with my husband still on furlough.
But we also do not plan to fully retire until around 63-65 unless there is a health reason to do otherwise. My Dad is 65 and still working full time and is just not ready to quit.

We spend our money on travel now vs. in retirement. I don't want to wait until I'm 65 to see the world and travel. We budget to take one very large trip (2+ weeks international) every other year, plus smaller trips. We call these trips our mini-retirement trips.

[SusanBAnthony]

For how we handle inheritance and future expenses-

If we get an inheritance, we will basically add it to our net worth. I that gets us to the point we can retire, great! But we probably won't make any decisions right away, we'll wait a while and make sure we're emotionally ready.

For health insurance, I'm mentally assuming it'll be 1k/month in premiums plus other expenses. I figure we will exchange the coat of kids for the cost of insurance.

We plan on a 3-4% withdrawal rate so our principal should hold steady/grow with inflation. If we get to a point where it is growing and we are getting older we'll likely either spend more or move it to more conservative investments. Basically we plan for the principle to be used for end of life care. We aren't getting long term care insurance so we'll self-insure so to speak with the principle.

My H's grandmother killed herself to save enough to give all her grandkids a 10k inheritance. Not that we won't appreciate it but with inflation and the fact that all her grandkids are middle aged (she is still kicking at 96!) that 10k is not a big deal to any of us. She should have not worried so much about saving it for us (it was a big Thing for awhile that she couldn't afford stuff because she was trying to not touch that money). I figure if our kids get an inheritance, great, but it doesn't factor into our plans.

[njohnson1972]

$2M/60 years old is my target.  Divorced, 49, 2 kids (7 and 9 yrs old).  Prepaid state college tuition.  No inheritances in the future.  With my current savings rate, I will hit my target $2M by age 58 with an average 7% return.  I have invested in a local hotel that I don't include in calculations.

[scm1011]

I am counting on some sort of inheritance, yes. My father is not well and has added me as joint owner to all his accounts in the last year so I have a good idea of what I stand to inherit, but I know there are a lot of factors that could jeopardize that and I am aggressively saving on my own as well (after a very lackluster start in my 20s). Basically it will mean the difference between a modest retirement and a much more extravagant one, I should be okay either way.

[awkwardpenguin]

We have a couple numbers I use for projections, but honestly it's all still in flux. I quit a few months ago to stay home with the kids until the pandemic is largely under control, but likely will bring in income again at some point in the future. I definitely do not want to work more than another 10 years, DW is less committed to early retirement but I think she wants to be done in her mid-50s, which is only like 12 years anyway. Chances are we'll make that work through the substantial financial flexibility we've built into our plans.

We both stand to inherit medium amounts from our parents, but hopefully we'll be retired and the kids will be in college before that happens, so we don't factor it into our plans. I sort of view it as a hedge against future healthcare costs.

[awkwardpenguin]

Jan 12, 2021 13:46:49 GMT -5 k3am said:

How much are folks budgeting in monthly per adult for health insurance?

I put $24k per year into the early retirement budget for health care, but that is an overestimate since at 65 we'll get Medicare.