Anyone else have such a large range?

[accountingsucks]

I obsess over my budget, financial projections, retirement nest egg, etc. One of the things I'm finding is that the nest egg I will need in about 13 years for retirement varies wildly depending on the variables. Right now my range of desired savings is about $1.2 Million to $2.2 million. The former number assumes not that much travel, driving cars to the ground, skipping organic groceries, etc. The latter number leaves alot of room for travel, newer cars, etc. I think realistically I will need somewhere in the middle. Some days I strive for the former depending on how crappy my job is making me feel. Anyone else have such a large range in their numbers?

 

[W2R]

It sounds like you are thinking you will NEED $1.2 M, but that you might WANT $2.2M. To me, it's the classic problem of need versus want. That doesn't help much with the dilemma, which is real and can be puzzling.

Before retirement I tried to save enough to take care of what I would need first, and then (while working extra years required to get health insurance) I knew that other than health insuranceI was just saving for what I would want, rather than need, in retirement. Working during that period of time (when I had enough to cover my bare bones needs but not much else, but had to keep working anyway) was tough for me.

 

[Aiming_4_55]

It could be fairly normal as it'll depend on your lifestyle that you see for yourself and family, if that applies.

For me, I have 3 numbers that I'm targeting:
(1) Barebones (less than my current budget)
(2) Current Lifestyle + Healthcare + partial college tuition fund for 2 kids + slight increase in travel (6 weeks away)
(3) Current Lifestyle + Healthcare + full college tuition fund for 2 kids + extra extra travel (10 - 12 weeks away)

The range between 1 & 3 is just over $1M for me, but I'm planning for a family of 4.

 

[brewer12345]

Realistically, there are probably several magic numbers for each person: bare bones, moderately comfy, generous extras, and OMG I have a crap load of money.

I have a number in mind where I pack it in without worrying, but I also have a number that would allow me to ESR. As I get more sick of the rat race, I am thinking more seriously about the ESR number.

 

[Animorph]

I went with the same retirement budget that I used when we both worked, modified for healthcare and kids in college and then leaving home. I did look at smaller budgets as fallbacks if things didn't go as planned. I have plenty of contingensies if the budget needs to be increased, but nothing formalized.

 

[FUEGO]

I have sort of the same range. Just under a million and a 4% SWR would cover the basics plus a small vacation/fun/discretionary budget ($6000). $1.4 million is what we need to lower the SWR to around 3-3.25%. Add in a more generous vacation budget and that pushes the number up further. We are almost at that "just under a million" figure but at age 32 I'm not ready to lock in a lower standard of living by ERing today, since our jobs aren't particularly stressful and it is easy money right now. I'd rather stick it out a few more years to pad the portfolio and buy better chances of portfolio survival and more fun money for the next several decades.

 

[Huston55]

I obsess over my budget, financial projections, retirement nest egg, etc. One of the things I'm finding is that the nest egg I will need in about 13 years for retirement varies wildly depending on the variables. Right now my range of desired savings is about $1.2 Million to $2.2 million. The former number assumes not that much travel, driving cars to the ground, skipping organic groceries, etc. The latter number leaves alot of room for travel, newer cars, etc. I think realistically I will need somewhere in the middle. Some days I strive for the former depending on how crappy my job is making me feel. Anyone else have such a large range in their numbers?

Hello fellow obsessor.

I think such a range is expected, especially given that you're 13 yrs away from retirement. If you were to monetize Aiming-4-55's extra items in #3 below, it could certainly add up to $30-$40k/yr, the high end of which requires $1M to sustain. So, I think your range is not abnormal.

The other observation, which I've noticed for myself, is that as you get older and closer to retirement, the "guaranteed" income streams you have (SS, pension, SPIA; whatever applies to you) tend to narrow your range, as does a more conservative (and expected to be more stable) AA.

It could be fairly normal as it'll depend on your lifestyle that you see for yourself and family, if that applies.

For me, I have 3 numbers that I'm targeting:
(1) Barebones (less than my current budget)
(2) Current Lifestyle + Healthcare + partial college tuition fund for 2 kids + slight increase in travel (6 weeks away)
(3) Current Lifestyle + Healthcare + full college tuition fund for 2 kids + extra extra travel (10 - 12 weeks away)

The range between 1 & 3 is just over $1M for me, but I'm planning for a family of 4.

 

[Live And Learn]

I obsess over my budget, financial projections, retirement nest egg, etc. One of the things I'm finding is that the nest egg I will need in about 13 years for retirement varies wildly depending on the variables. Right now my range of desired savings is about $1.2 Million to $2.2 million. The former number assumes not that much travel, driving cars to the ground, skipping organic groceries, etc. The latter number leaves alot of room for travel, newer cars, etc. I think realistically I will need somewhere in the middle. Some days I strive for the former depending on how crappy my job is making me feel. Anyone else have such a large range in their numbers?

To answer your question - I could have written the above myself !

And as W2R said, since I have the "need" part covered I'm finding it more and more difficult to go to w*rk each day. My motivation is that I want to have the WANTS covered also, so as I drive home each day I imagine a fun way that I'll spend the days pay once I retire.

 

[plex]

Have a pretty good grasp on what I'll need/want, but I'm know I'm a rarity. The number, in future dollars, is about $800k+paid off house. In today's dollars that is something like $600k+paid off house. Comes with contingency plans B, C, D, and E too, so I feel pretty safe with that number.

There really isn't a range, I have a very strong grasp of expenses, so there's never really been any surprises there, and specifically sought out a job that is very early retirement friendly.

 

[donheff]

I vacillated on a range like that only in my case it was between living pretty large and what Brewer described as an OMG amount. I had been planning to stay at work for two or three more years to OMG levels, but when I attained eligibility for a full pension presenting the opportunity to go at just very good, I couldn't resist.

 

[ziggy29]

Every time I rerun the numbers and re-think things, it seems like I reach a different conclusion about when I can get out. To a large degree it depends on the stability of my wife's new career in ministry, but as of now I'm eyeing 2016 as the time when I get out (maybe not complete retirement, but at least to something a lot less stressful with less demands on my time). That would make me about 50 at the time. But we'll see.

 

[67walkon]

Paralysis by analysis. Too many of us suffer from it.

I'm the same way. We are generally very frugal, but are not hesitant to spend money on things we consider important. I might consider a new road bike important and my wife might consider new window treatments important, but we don't spend it unless we have the extra money.

For the most part, I tend to run the numbers based on what our budget says and then add a comfortable safety margin. For instance, I think it will cost us about $100-120,000 to maintain a similar life style in retirement, but I plan based on spending more in the first few years. I want a nice, cushy margin until we figure it out completely. My suspicion is that we will spend a lot less than what I am allowing for, but we won't know without doing it.

At some point, and for me it's early next year, we all have to trust FireCalc and our own spreadsheets and pull the trigger.

 

[rodi]

Boy this post hits home.

I too have a range. And I guess I'm doing the "just one more year" thing (or 4) to get it from the bare minimum to the comfort zone. But given my employer's love of headcount reductions it's a really comforting thing to say "No need to panic" if I get cut.

My current goal shifted from age 52 (I'm 51) to age 55. This is to guarantee the house is paid off (only 2 years left on current payoff schedule) and that the kids 529's are funded. It will also give me some more high earning years for SS earnings... which is a good thing for when I add that income stream.

It's weird knowing I *could* pull the trigger now - but there'd be no extras in the budget for the next 40 years... I want a few extras.

I doubt I'll get to the OMG I'm rich point that Donhoff mentioned unless we continue to have weeks like last week in the market. I'm not counting on that.

 

[ronocnikral]

Ranges will be large the further out you are. As you move closer, the ranges should close in. E.g. the day before you pull the plug, you'll have a REALLY small range.

But, we can all pencil whip the numbers however we like. I just save as much as I can while maintaining the lifestyle I want. I run the numbers about once every 2 years to see if there are any tradeoffs that make sense (if I stop doing a hobby and invest the money, does it make a difference and is the difference worth forgoing a hobby?).

 

[FIREd]

My range was fairly tight because I knew I didn't want a barebone-type retirement and I didn't dream of a lifestyle that required a OMG-sized portfolio either. Basically I wanted something between comfy and extra comfy.

 

[MasterBlaster]

If you haven't already read Lee Eisenberg's book "The Number", then by all means read it. He is a wonderful writer and eloquently proses what we all here feel. Mr Eisenberg was at one time the editor-in-chief of Esquire magazine among other things. I found the book to be very entertaining and it certainly is relevant to this thread. The book looks at the retirement "number" from many different practical, emotional, and moral perspectives.

By the way, I notice that it sells on Amazon for $1.17 (plus $3.99 shipping) or as low as one cent used (plus shipping).

http://www.amazon.com/The-Number-Completely-Different-Think/dp/0743270312

 

[cr7090cap]

I, too am an OCD numbers runner. You have to be careful, or it can consume you. My wife and I have lived below our means for a long time, and I believe this should be a priority for anyone, not only those approaching retirement. Our budgets have always been fairly austere. We have never lacked for anything- necessities or some of the finer things in life. At thirteen years, you have a ways to go. As far as nailing down THE NUMBER now, you are probably causing yourself a great deal of unnecessary anxiety. I have spent the last few years doing the same thing. Looking back it was probably wasted brain energy. In addition, alot can happen next week, let alone in thirteen years. I think the two most important things you can do is 1) Live below your means and 2) Save as much as you can for as long as you can. The NUMBER will then take care of itself, it did for me.

 

[Alan]

I obsess over my budget, financial projections, retirement nest egg, etc. One of the things I'm finding is that the nest egg I will need in about 13 years for retirement varies wildly depending on the variables. Right now my range of desired savings is about $1.2 Million to $2.2 million. The former number assumes not that much travel, driving cars to the ground, skipping organic groceries, etc. The latter number leaves alot of room for travel, newer cars, etc. I think realistically I will need somewhere in the middle. Some days I strive for the former depending on how crappy my job is making me feel. Anyone else have such a large range in their numbers?

I was very much like this and can appreciate your obsession over the numbers. All I can say is that 13 years is a long time to "over-worry" the future. Just keep doing all the good stuff you are doing and in 10 years or so you should be a lot wiser and able to see things more clearly than you can today.

 

[67walkon]

I skimmed what I could of the Amazon book. The guy is right. Is the "satisfaction factor" 60% of what you spend now, while employed? Or 70%? I tend to think that the "start up costs" of retirement are going to be a little higher because so many of us have put off things for too long; projects around the house, travel to some special place, getting situated to do whatever it is you would rather be doing than working, etc. But that will be offset by no work related expenses and more time to do what you want to do.

Time is precious, especially when you reach a certain age. Only you know what that age is for you. I would rather have a little less money and time to do stuff while I'm still young enough and healthy enough to do it as opposed to having a lot more money but being too old to do the things I like to do.

I'm bailing next year. I don't have enough to fly around on private jets, but I've got enough to support a primary house and a vacation house and to eat, so I'm good.

 

[Bimmerbill]

I have the same issue. I'm 46 and can retire with reduced benefits at 56, or with full benefits at 60. I have trouble guessing (estimating?) what my expenses will be in 10 or 14 years.

Since I can't really figure out how to estimate, I have a hard time working backwards from "the number" to now. So, I can't figure out if I am saving enough- or too much.

 

[ziggy29]

My range was fairly tight because I knew I didn't want a barebone-type retirement and I didn't dream of a lifestyle that required a OMG-sized portfolio either. Basically I wanted something between comfy and extra comfy.

+1

If I wait to retire until we have enough to fund a lifestyle well above what I think I need to be happy, then I've worked way too long...

 

[martyb]

I can retire this coming January, with the basics covered, plus a little more. I'm constantly crunching the numbers, having conversations with myself, and my wife when she wants to hear it for the umpteenth time, about whether it's enough, or whether instead I should work another year or two to add a little cushion.

The biggest elephant in the room for us is that we don't own a home. We're currently renting two apartments, because I work 125 miles from where she lives and works. I sleep 4 nights a week at my apt. then drive to see her on weekends. We've been doing that more than 3 yrs.

It probably makes sense to buy a house now, before I retire, but I HATE the thought of going in debt for a mortgage (although now's the time with the low rates) or even worse....spending the cash from my retirement savings. The majority of our retirement will come from my COLA'd pension that begins when I retire, and then 5 yrs later a smaller military pension begining at age 60. I won't really qualify for much SS, only around $200 or so. Wife will get some SS, maybe $600 at 62, but she's only 52 now.

If I pay cash for a house, that means no mortgage, which is great, but also wipes out a big chunk of our savings. We only have around $300k. If we spend $200k on a house, the pensions will cover everything, with a little breathing room.

I don't know if it makes more sense to carry a mortgage, therefore a requirement to withdraw monthly from the savings to cover the payments, or simply pay cash for the house, leaving the savings 2/3 lower, but then not needing to withdraw anymore due to the pensions covering everything. On one hand, mortgage rates are probably lower than I can earn on savings, however, carrying a mortgage means I can't really look at my portfolio for anything beyond paying the mortgage because I need it to keep earning enough to cover the mortgage. Perhaps a few yrs down the road it will have increased enough to kick off some excess $$.

If I had a substantially bigger portfolio, this would be a no-brainer to me. I'd pay cash for a house, skim off the remainder as needed...or if needed. Probably wouldn't need to touch it except for special occasions (or a new toy, emergency, etc.). Maybe I really do need to work a few more years to build up more cushion.

 

[Animorph]

I don't know if it makes more sense to carry a mortgage, therefore a requirement to withdraw monthly from the savings to cover the payments, or simply pay cash for the house, leaving the savings 2/3 lower, but then not needing to withdraw anymore due to the pensions covering everything. On one hand, mortgage rates are probably lower than I can earn on savings, however, carrying a mortgage means I can't really look at my portfolio for anything beyond paying the mortgage because I need it to keep earning enough to cover the mortgage. Perhaps a few yrs down the road it will have increased enough to kick of some excess $$.

No reason you can't take out the mortgage when you buy the house and then pay it off (or partially off) whenever you feel like it. If you buy with cash you can do a cash-out loan, but it will cost more and will not be as easily tax deductible. Also, it will very likely be easier to get a loan when you still have W-2 documented income, though the pension will be good.

The mortgage payment, other than escrow, doesn't inflate, so if we get a nice big inflation you'll be all set.

 

[akck]

In my plan, I just use a lower end number, but have some travel as part of the budget. I don't have vehicle replacement or major repairs as part of the budget. However, I do have some slop in my expense numbers and I assumed any amount over my retirement goal would go to those items. Since I've already exceeded my retirement goal, I'm fairly comfortable we'll be able to cover everything when I retire within the next two years. It also helps that we've been completing some major home remodels and maintenance during the last few years, so we won't have to face those for 20+ years.

 

[ShortInSeattle]

I think the two most important things you can do is 1) Live below your means and 2) Save as much as you can for as long as you can. The NUMBER will then take care of itself, it did for me.

That sounds wise. I can empathize with the OP too. Our "number" includes a comfy standard of living, I think, but as the years go on I find myself wondering if We should give up a little padding in exchange for an earlier date. As you said though, worrying too much isn't productive. It's probably best to soldier on until we're at that future date and can decide accordingly.

SIS