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Old 12-08-2012, 01:41 PM   #21
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I have friends that ask me when they can reitre or how much money they need to save all the time. Without doing an in depth analysis, here's what I say to them:

1) Determine the annual amount of money you need to sustain your total standard of living.

2) Add up all income sources at retirement (i.e. SS, pension rentals etc.)

3) Subtract #2 from #1 and the difference is what your investments need to supply.

4) For a 20 year retirement multiply #3 by 22, for a 30 year retirement multiply #3 by 28 and for a 40 year retirement multiply #3 by 35.

Simple and straight forward. However, most people have a hard time calculating #1.
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Old 12-08-2012, 02:21 PM   #22
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Originally Posted by jkern View Post
I have friends that ask me when they can reitre or how much money they need to save all the time. Without doing an in depth analysis, here's what I say to them:

1) Determine the annual amount of money you need to sustain your total standard of living.

2) Add up all income sources at retirement (i.e. SS, pension rentals etc.)

3) Subtract #2 from #1 and the difference is what your investments need to supply.

4) For a 20 year retirement multiply #3 by 22, for a 30 year retirement multiply #3 by 28 and for a 40 year retirement multiply #3 by 35.

Simple and straight forward. However, most people have a hard time calculating #1.

Yes, its just that simple. Wonder why more people won't take the time? I guess some just like being wage slaves.
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Old 12-08-2012, 05:18 PM   #23
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Originally Posted by Katsmeow View Post
The book sounds interesting but from this I get the idea he is one of those who doesn't think anyone should ever consider SS in deciding whether to retired. He seems to think that the only income one has is from portfolio.

This also doesn't seem to consider what if there are two of you.

For example, DH's SS is a little over $22k a year and mine will probably be a little more - for sake of argument, say $25k a year. That's $47k. So why would someone with that SS need $1 million in order to have an income of $50k a year?
Not really.

On pp#250-251 he lays out a formula that includes: portfolio income, SS, pension(s), home equity, inheritance, and part time work.

Again, this book is light on numbers and heavy on philosophy but, the numbers it does have seem very sound to me.
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Old 12-08-2012, 10:22 PM   #24
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Quote:
Originally Posted by jkern View Post
I have friends that ask me when they can reitre or how much money they need to save all the time. Without doing an in depth analysis, here's what I say to them:

1) Determine the annual amount of money you need to sustain your total standard of living.

2) Add up all income sources at retirement (i.e. SS, pension rentals etc.)

3) Subtract #2 from #1 and the difference is what your investments need to supply.

4) For a 20 year retirement multiply #3 by 22, for a 30 year retirement multiply #3 by 28 and for a 40 year retirement multiply #3 by 35.

Simple and straight forward. However, most people have a hard time calculating #1.
Would this work for ER where you have retirement years without SS?
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Old 12-08-2012, 11:02 PM   #25
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You can have a house in a good gated golf community (the Houston area), travels and in general lives well, without having to be in the rich or even kind of rich category, if you cut out private jet, sitting on the board or owning a second home.
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Old 12-08-2012, 11:21 PM   #26
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Wouldn't it be nice to be rich? I guess I will have to make do with what I've got.
Go for longevity-- in about a decade that $20M will only be worth $15M...
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Old 12-09-2012, 07:16 AM   #27
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You can have a house in a good gated golf community (the Houston area), travels and in general lives well, without having to be in the rich or even kind of rich category, if you cut out private jet, sitting on the board or owning a second home.
I'm too rich right now to sit on a board!

For some people money is not enough. They have to have status and recognition too.
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Old 12-09-2012, 09:05 AM   #28
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For some people money is not enough. They have to have status and recognition too.
True.

Those are the one's who go into politics ...
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