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View Poll Results: How much money to retire
$500k 8 4.52%
$1M 21 11.86%
$1.5M 60 33.90%
$2M 45 25.42%
$2.5M 13 7.34%
$3M 10 5.65%
> $3M 20 11.30%
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Old 03-08-2008, 04:13 AM   #41
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I voted $1 million -- because the distance is too wide between 500k and 1 million. I'm confident life would be fine for me somewhere in between. My tastes won't suddenly change and I have good back up plans for sudden, unexpected setbacks.
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Old 03-08-2008, 04:33 AM   #42
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I voted 1.5M, which seems right to me. Question though. Will all of the baby boomers retiring now have 1.5M to retire on? If not what will the 80%-90% that do not have 1.5M on do?
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Old 03-08-2008, 04:58 AM   #43
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I've been thinking about what my actual, real response would be.

If I was looking at a choice between retiring now at 50 or working 5 more years until 55. I'd probably stay working just a bit longer... leverage my job through the bear market so I can buy stocks on sale and hold off just a bit longer on tapping into my portfolio. I have a feeling the "just a little bit longer" bug would be hard to fight, if you don't absolutely hate your job, in this market.
I have been liking my j*b less lately. But I am intending to work another 46 months. I can take ER and get a pension and Health Care Insurance.

If I left now, I would get my pension at 65.

My current plan is to do my time. I guess I am glad the recession is happening now. It should be on the mend and a healthy upswing in the next year or so. It would be in sync with the business cycle.
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Old 03-08-2008, 06:55 AM   #44
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I voted 1.5M, which seems right to me. Question though. Will all of the baby boomers retiring now have 1.5M to retire on? If not what will the 80%-90% that do not have 1.5M on do?
My gut feeling is money will be treated differently. People who saved will be taxed heavily, and social security will be severely means tested.

The media says younger people don't expect social security to be there, but I think they are creating that reality. I expect it to be there. But my whole life story -- I'm 45 -- is things changed just before I got there. I have three older brothers and all went through bigger classes and more electives in school, for example, and my year was the sudden cutbacks. The only plausible explanation I heard was new birth control options changed things that generation.

But I'm waxing on. I think there will be changes. There always are!
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Old 03-08-2008, 07:30 AM   #45
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I have been liking my j*b less lately. But I am intending to work another 46 months. I can take ER and get a pension and Health Care Insurance.

If I left now, I would get my pension at 65.

My current plan is to do my time. I guess I am glad the recession is happening now. It should be on the mend and a healthy upswing in the next year or so. It would be in sync with the business cycle.
That is very much where I am and in fact changed locations and jobs in January within Megacorp to ease the pain of w*rk these last 2 years. If I had been laid off and didn't have the nest egg I needed then I would look for another job for a few years if only to get health care.
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Old 03-08-2008, 08:11 AM   #46
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$1M for an income stream plus another $500K reserve for the health insurance situation, a total of $1.5M.
This is a good/realistic point above.

It is boggling to me (maybe it shouldn't) that 1/3 of a persons retirement nest egg probably needs to be allocated to health care.

Maybe an average split is:
1/3 health care allocation
1/3 "sustenance" allocation (housing, food, etc)
1/3 "living" - hobbies, travel, entertainment

I've always been hoping/dreaming that 80% of the 4% I draw could be used for fun stuff....
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Old 03-08-2008, 08:27 AM   #47
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My gut feeling is money will be treated differently. People who saved will be taxed heavily, and social security will be severely means tested.

The media says younger people don't expect social security to be there, but I think they are creating that reality. I expect it to be there.
I have no doubt SS will still be there for even the youngest people today...in some form. Like you, I expect the taxation and means testing to be greater, and the benefit levels to be lower.

I'm 42, so I may or may not be heavily hit by it. My guess is that when it becomes less generous, I'll be in the "transition" or "phaseout" group.
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Old 03-08-2008, 12:08 PM   #48
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My gut feeling is money will be treated differently. People who saved will be taxed heavily, and social security will be severely means tested.

The media says younger people don't expect social security to be there, but I think they are creating that reality. I expect it to be there. But my whole life story -- I'm 45 -- is things changed just before I got there. I have three older brothers and all went through bigger classes and more electives in school, for example, and my year was the sudden cutbacks. The only plausible explanation I heard was new birth control options changed things that generation.

But I'm waxing on. I think there will be changes. There always are!
You may be right about the social security being tied to means testing. I am afraid with medical cost and war cost the government is going to have to find ways to reduce cost which means the individual pays more. The part I don't like is I am beginning to feel like the grasshopper who worked all summer and stored grain for the winter while his friend played, but now I must share my grain with him.


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Old 03-08-2008, 01:41 PM   #49
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You are 50 years old....
You do not have health insurance so you need to provide for it till 65 (medicare).
You have no pension except SS for you and your spouse.
I voted >$3m because of these three conditions, and because my personal risk profile urges me to plan for unforeseen contingencies.
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Old 03-08-2008, 09:12 PM   #50
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I voted 1.5M, which seems right to me. Question though. Will all of the baby boomers retiring now have 1.5M to retire on? If not what will the 80%-90% that do not have 1.5M on do?
Social Security. Medicare. Lower standard of living.
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Old 03-09-2008, 12:59 AM   #51
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I'm the one who picked $500K, but we're in a situation that almost doesn't exist anymore. We have a defined-benefit pension with 100% COLA (for the Wash. D.C. metro area), medical, prescription, dental and vision coverage for life for 30% of the group premium. This becomes secondary to Medicare at 65. Zero debt, no mortgage. The only possible "gotcha" that I can think of is long-term-care coverage but only 5% of people end up needing that.
Another "gotcha" is that the COLA defined pension may disappear. This is evident in the private sector in which many companies default their pension obligations. The majority of people would say that the government will never follow suit. However, the government is heavily in debt. The current payout in pensions exceeds the current government payroll. How much longer can the government continue to pay?
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Old 03-09-2008, 04:58 AM   #52
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Another "gotcha" is that the COLA defined pension may disappear. This is evident in the private sector in which many companies default their pension obligations. The majority of people would say that the government will never follow suit. However, the government is heavily in debt. The current payout in pensions exceeds the current government payroll. How much longer can the government continue to pay?
Wow Spanky ... kinda pessimistic don't ya think? Next you'll tell me there is no Santa Claus or Easter Bunny.
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Old 03-09-2008, 06:20 AM   #53
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Interesting.


The sweet spot for most seems to be between $1-2 M.
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Old 03-09-2008, 07:59 AM   #54
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I voted for $2 million. We retired almost 7 years ago at ages 54 and 48 with $1.6 million. Now we are 55 and 61. We've averaged taking about 4% year from our portfolio to live on and the value of our portfolio is now $2.1 million. House is paid for, children are finished college and we are extremely lucky in that we have retiree health care from a former employer for $75 per month. We have a portfolio split between stocks and bonds 50/50. All the stocks we own are in good dividend paying companies - although a lot of these are banks which have taken a huge hit. Up until this point we have felt very comfortable with our finances and investing - but the market lately is making us a bit nervous (actually very nervous). We do have the option of my husband taking social security next year - so we might reduce the amount we take from our portfolio if the market continues it's nosedive. I will say that these past 7 years have been the happiest of my life.
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Old 03-09-2008, 08:26 AM   #55
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With everyone focused on "the number" it seems like a good time to remember Bob Clyatt's solution. Amazing how much even a modest income stream makes a difference, using the 25x rule of thumb. Bringing in even $20k per year in ESR is like having an extra $500K saved, at least for as long as you can keep up the work.

Working on my taxes right now. I retired at the end of 2006 after two years of part time work. Part of my retirement agreement was that I would receive a portion of fees I had billed but not collected. As a result I made about $30,000 last year. This year my old work place hired me to help out with a hospital bonding project and I expect to make about the same. The work is now done and in a week or so, taking off for the south!

I feel very lucky that I have been able to have some extra money come in over the past couple of years. It makes me much more comfortable taking trips and doing other fun stuff. And buying beads for my bead projects.

I don't know if I will hunt up any more work, but it is comforting to know that I can.
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Old 03-09-2008, 11:17 AM   #56
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We do have the option of my husband taking social security next year - so we might reduce the amount we take from our portfolio if the market continues it's nosedive. I will say that these past 7 years have been the happiest of my life.
I never get tired of hearing from folks who RE'd and have been extremely happy after doing so. I think with the option of taking SS now, that you are well set up.
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Old 03-09-2008, 05:51 PM   #57
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I could retire with a home paid off and 500K but SS will only pay me about 1,200 a month so it would mean drawing down my nest egg maybe what medical cost plus 6K a year to get by. Married like in this would be easier since SS would be more than double and property taxes and things wouldn't be. It would be poverty but I could do it. It would be easy if I took a reverse mortgage but they cost too much so I would wait until I was over 80 to consider it.
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Old 03-09-2008, 06:06 PM   #58
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I could retire with a home paid off and 500K but SS will only pay me about 1,200 a month so it would mean drawing down my nest egg maybe what medical cost plus 6K a year to get by. Married like in this would be easier since SS would be more than double and property taxes and things wouldn't be. It would be poverty but I could do it. It would be easy if I took a reverse mortgage but they cost too much so I would wait until I was over 80 to consider it.
An SWR of 4% of that $500K would be $20K/year, before taxes, and I suppose maybe $15K or so after taxes. That would give you $9K/year for health insurance and deductibles, which from what I have read on the board might be possible if you are in good health. But if you are not, it could be a problem until Medicare kicks in.

Living on $1700/month after taxes in a paid off house with my medical care already paid for doesn't sound like poverty to me, but then I guess we each have our own definition of poverty.
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