31% think $250K is enough to retire on

[Nords]

In line with the "scraping by on $250K" thread, it turns out that a substantial minority of wage earners feel that they can retire just fine on a $250K portfolio:

Is $250,000 in savings enough to retire? | Prism Money | Analysis & Opinion | Reuters.com

As they sling the numbers:

... That leaves approximately $16,857 per year left to be satisfied by pension income, work income and withdrawals from investments. If we assume no work or pension income, that’s a withdrawal rate of 6.74 percent based on a $250,000 portfolio. [Editor's note: compared to the most common four percent rule of thumb.] Definitely a bit too high for comfort from a regular portfolio. But if the person annuitizes via a single premium immediate lifetime annuity, it’s not terribly outside the range of possibility.

Of course the article could also have been titled "69% aren't confident enough to retire on $250K!!"

 

[unclemick]

That's about what I did retire on - in 1993 - back when a dollar was a dollar. At age 49.

Now - given my slashing expenses to make 'cheap SOB' seem like luxury, toss in some temp work, no health insurance, AND AND the fickle finger of fate - the 90's market. Twas easy in hindsight.

Plus I really didn't like the idea of work.

Today to make such an amount work for all season's would be more than a bit of a stretch.

heh heh heh - and that's a mild understatement. Could I do it again? Maybe on a bet but I wouldn't want too.

 

[RetiredGypsy]

What's the percentage of people who buy lottery tickets that think they'll win?

 

[rescueme]

What's the percentage of people who buy lottery tickets that think they'll win?

All of them (100%) ...

I get your point - you gotta believe!

 

[MasterBlaster]

Well you can retire on $250k if you aim for the really really low lifestyle.

using the ubiquitous 4% SWR you can have an income of $10k per year.

A big bag of beans and some varmit meat and you are set !

 

[jdw_fire]

looks like another thread where people dont read the entire posts. from the article

So $30,000 appears to be a decent ballpark estimate of the 30th percentile for household income in the U.S. (We’re going for 30th percentile here so that it lines up with the idea that 31 percent of people estimate needing less than $250,000.)
If we go to the Social Security Administration’s “Quick Calculator” and plug in 1/1/1946 as a birthdate (such that they’re 65 now, and about to retire) and $30,000 as current earnings, we get a ballpark estimate of Social Security benefits of $10,848 per year.
If we assume the person ends up paying 7.65 percent less total tax (due to not having to pay payroll tax), that’s $2,295 in tax savings.
That leaves approximately $16,857 per year left to be satisfied by pension income, work income and withdrawals from investments. If we assume no work or pension income, that’s a withdrawal rate of 6.74 percent based on a $250,000 portfolio. [Editor's note: compared to the most common four percent rule of thumb.] Definitely a bit too high for comfort from a regular portfolio. But if the person annuitizes via a single premium immediate lifetime annuity, it’s not terribly outside the range of possibility.

this doesnt look all that far fetched for the income level talked about. looks like maybe all the net income from working is replaced with SS and the $250k

 

[Independent]

The article is better than most in that it at least recognizes that low income people need less money to continue their current spending.

I guess the question is "If I were earning $30k per year at a job that I didn't like, I had saved $250k (which is 8x may annual income), and I were 65, would I continue to work?"

That's a different view of what's "enough".

 

[NW-Bound]

When my parents retired, they had less than $250K of liquid investment assets, counting both before and after tax categories. But they were no "Uncle Mick"!

They owned their home and a rental property, which were worth more than $500K combined. They were no early retirees, so were drawing SS and a small state pension. My father deceased, and my mother now lived alone comfortably on a total annual income of less than $30K. Again, her housing cost is minimal.

To retire early on just $250K? Well, there are always people who can or could like Uncle Mick and Jacob, but for me, it's too tough! I'd rather go to work!

PS. Actually, if I were single, had no dependents, and did not care about health insurance, a $250K portfolio may provide enough for me to park my little motorhome in the NM mountains like I often fancy myself doing to play a recluse. Heck, I am sure there are some people doing that already.

 

[MasterBlaster]

For too many people retirement means a paid off house and SS. The concept of a retirement nestegg has illuded them.

 

[FIREd]

Quite a few people in my family retired with SS, a paid off home and not much else. They never made a lot of money to start with (<$20K per year), so they are doing quite well in retirement despite having <$100K in savings.

But things are getting tighter for them. Their SS income is indexed on general inflation but, with such a low budget, their expenses are overwhelmingly food- and energy-related. As a result, their purchasing power has eroded quite a bit over the past 3-4 years.

 

[chinaco]

Sad isn't it?

Of course, they could be taking the position that $250k is more comfortable than the $35 k they have now!

 

[Major Tom]

PS. Actually, if I were single, had no dependents, and did not care about health insurance, a $250K portfolio may provide enough for me to park my little motorhome in the NM mountains like I often fancy myself doing to play a recluse. Heck, I am sure there are some people doing that already.

There are quite a few of them here:

VanDwellers : "Live in your Van 2"

 

[NW-Bound]

Hmm...

I only look at the 1st picture shown on that Web link, but it surely does not portray a serene lifestyle like I imagine on Walden Pond.

Something is wrong here!

PS. This is more what I am talking about here!

Note: picture linked in from Andy Baird's Web site (Upgrade frenzy)

 

[MasterBlaster]

Nosiree, I'm not gonna work for the man no more ! You're not gonna git me up in one of those office buildins' Nosiree ! Nobody's gonna tell me what to Do ! Nosiree !

Not when I can retire right now !

< Attached are images of the summer and winter palaces as well as the land yacht>

I did have one question though. What should I do with my extra money ?

Should I pay down the house or should I invest it ?

 

[Andre1969]

Hmm...

I only look at the 1st picture shown on that Web link, but it surely does not portray a serene lifestyle like I imagine on Walden Pond.

Something is wrong here!

Yeah, tell me about it. That first pic makes me think of a modern day "Grapes of Wrath", or that movie where David Carradine played Woody Guthrie!

 

[Andre1969]

Nosiree, I'm not gonna work for the man no more ! You're not gonna git me up in one of those office buildins' Nosiree ! Nobody's gonna tell me what to Do ! Nosiree !

Not when I can retire right now !

< Attached are images of the summer and winter palace as well as the land yacht>

Wow, livin large there...that Caprice is two-tone AND has whitewalls!

 

[MasterBlaster]

Wow, livin large there...that Caprice is two-tone AND has whitewalls!

Well, after carefully examining my expenses, I ran the numbers at least a hundred times to make sure that I won't run short.

I used a conservative SWR cause I don't know about what the future holds. In the end I concluded that I have enough to live without puttin' up with all the office politics and all tha t suckin' up to the boss.

I'm free now to live my life on my terms !

You too can retire now ! The good life awaits you.

 

[Andre1969]

Oh, as for $250K? I think that's about what my grandmother has saved up. She's 87 now. However, she gets a pension, plus social security, plus my deceased Granddad's pension and SS. I think she gets around $40,000 per year.

Granddad retired way back in 1971. Grandmom retired at the end of 1980, but went back to work because she's a bit of a work-aholic. Worked off and on until 1994, when she turned 70.

I have no idea what kind of a nest egg they had saved up back in the day. Neither one really went all that high on the career ladder. Granddad was federal gov't, but some kind of wage grade or whatever they call it. Worked on a gov't farm. Only had a 6th grade education, but could do just about anything he needed to, farm-related, build a house, repair it, and do just about anything to a car that it needed, at least until emissions controls got too hot and heavy! I think Grandmom made it to GS-7 or GS-8 in the federal gov't.

They just never spent a lot of money and were happy with the simple things in life. I'm sure if it wasn't for those pensions though, that $250K wouldn't be there. Or, at least would be much smaller.

 

[Andre1969]

Well, after carefully examining my expenses, I ran the numbers at least a hundred times to make sure that I won't run short.

I used a conservative SWR cause I don't know about what the future holds. In the end I concluded that I have enough to live without puttin' up with all the office politics and all tha t suckin' up to the boss.

I'm free now to live my life on my terms !

You too can retire now ! The good life awaits you.

Oh, I gotta confess, I have something similar to that sitting in my yard. Just with a Mopar slant!

Heck, I even made the same mistake twice!!

 

[racy]

31% also believe in witches.
WHO Believes in Reincarnation? - Netscape Home & Living

 

[Katsmeow]

My parents never made a lot of money but they were big savers and paid off their house many years early. Alas, as a child of the depression, my mom was never comfortable with any type of risk in saving. Her sole investments her entire life (she is 87) were CDs and government savings bond. They weren't sophisticated and didn't really understand any other type of investment and still dont. My mom (dad died 10 years ago) grasps the concept that equities can go down but she can't grasp inflation risk.

That said when they retired (early 60s) they mostly had SS each and my mom has a couple of tiny pensions (total $4k a year or so).

They did have savings. However, here's the thing. For years and years they never spent any of the savings. The SS was enough. After my dad died, my mom has spent some of the savings but mostly lives on SS and the tiny pensions and is fine. (Not the lifestyle I want but it works for her).

 

[Major Tom]

Hmm...

I only look at the 1st picture shown on that Web link, but it surely does not portray a serene lifestyle like I imagine on Walden Pond.

Something is wrong here!

PS. This is more what I am talking about here!

Note: picture linked in from Andy Baird's Web site (Upgrade frenzy)

Now that's more my speed too! If and when I do the camper thing, I'm thinking about a Roadtrek.

That Yahoo group I posted has a lot of members who seem to be living in vans either from economic necessity, or are doing it for the lifestyle but on a limited income, such as SS only. It's interesting reading their stories.

 

[NW-Bound]

When researching the Web for info on RV'ing, I ran across a blog by a man who calls himself a "mobile kodger". Seach for that term if you are curious. He is a real traveler, and a really good story teller.

From his blog, I have learned about this lifestyle similar to your Yahoo group. Some people enjoy it. Quite a few appears to do it out of necessity, although I believe that they can have a better living condition if they would "work for the man" as most people do.

 

[Major Tom]

When researching the Web for info on RV'ing, I ran across a blog by a man who calls himself a "mobile kodger". Seach for that term if you are curious. He is a real traveler, and a really good story teller.

From his blog, I have learned about this lifestyle similar to your Yahoo group. Some people enjoy it. Quite a few appears to do it out of necessity, although I believe that they can have a better living condition if they would "work for the man" as most people do.

I follow his site and agree - he is a true adventurer and excellent storyteller. He is very much the protagonist in his own journey of mobile exploration and discovery.

As far as "working for the man" goes, I have never had a problem with this as I know you don't, though some do seem to. Employment is a blindingly simple contract as far I'm concerned; I do what my employer wants me to do (within reason of course) and in return I get paid. End of story. It's what you do when you want money.

 

[rescueme]

Employment is a blindingly simple contract as far I'm concerned; I do what my employer wants me to do (within reason of course) and in return I get paid. End of story. It's what you do when you want money.

It's amazing how many people don't understand that simple fact. They make more out of a j*b than what it really is...