Useful Links

veremchuka · 11-17-2012, 02:46 PM

I read that article before I came here today. I can't imagine having just $300k and I own my house and I have a pension and I LBMN and I have not spend any investments in 5+ years except for $21k to help pay off the mortgage. $300k? You better have one heck of a pension!

pb4uski · 11-17-2012, 02:57 PM

Quote:

Originally Posted by veremchuka

I read that article before I came here today. I can't imagine having just $300k and I own my house and I have a pension and I LBMN and I have not spend any investments in 5+ years except for $21k to help pay off the mortgage. $300k? You better have one heck of a pension!

or a simple lifestyle and low living expenses. I think the point is that conventional wisdom is that you need gazillions to retire, but if you own your home and have a simple lifestyle that you could do it on SS and 4% WR from a $300k portfolio. I know people who do it on less - note that these people are FRA or older - I can't see ER with only that amount.

FANOFJESUS · 11-17-2012, 03:06 PM

This is more shocking than the 300k story.
The Shocking Retirement Numbers That Will Blow You Away

According to recent estimates, there are 58 million Americans between the ages of 50 and 64. The median retirement savings for this group is only $26,000 per person.

Mulligan · 11-17-2012, 03:12 PM

Quote:

Originally Posted by veremchuka

I read that article before I came here today. I can't imagine having just $300k and I own my house and I have a pension and I LBMN and I have not spend any investments in 5+ years except for $21k to help pay off the mortgage. $300k? You better have one heck of a pension!

I couldn't imagine having $300k! Though it looks like I will in about 10 years or so if things keep going like they have. My pension is about $75k, with a small 2% bump in a couple of months. Plenty for me and then some, but I live in a low cost area, and don't live extravagant either, though I do what I want.

mathjak107 · 11-17-2012, 03:40 PM

Quote:

Originally Posted by rec7

This is more shocking than the 300k story.
The Shocking Retirement Numbers That Will Blow You Away

According to recent estimates, there are 58 million Americans between the ages of 50 and 64. The median retirement savings for this group is only $26,000 per person.

These estimates are all over the place and with something as infinate as what we have no one really knows.

Katsmeow · 11-17-2012, 03:50 PM

Quote:

Originally Posted by rec7

This is more shocking than the 300k story.
The Shocking Retirement Numbers That Will Blow You Away

According to recent estimates, there are 58 million Americans between the ages of 50 and 64. The median retirement savings for this group is only $26,000 per person.

The article also has the following quote:

Quote:

According to Ghilarducci, a safe rule of thumb is that you must have 20 times your annual salary saved up by the time you retire

Sigh. If DH and I had to have that he would still be working (he is 65) and I would be working for many more years as well (I still work part-time). We don't have anywhere close to 20 times our annual salary at the time he retired and and I went part-time. But, we're doing fine.

Ghilarducci is well known to be hostile to 401(k) and seems to want us all in annuities and she definitely slants what she says to make it seem like everyone is doing awful....

Moemg · 11-17-2012, 04:06 PM

Quote:

Originally Posted by Mulligan

I couldn't imagine having $300k! Though it looks like I will in about 10 years or so if things keep going like they have. My pension is about $75k, with a small 2% bump in a couple of months. Plenty for me and then some, but I live in a low cost area, and don't live extravagant either, though I do what I want.

I think a 75k pension certainly trumps $300,000 in savings .It is equal to almost $2,000,000 in savings and probably includes health benefits . Good work Mulligan !

Mulligan · 11-17-2012, 04:25 PM

Quote:

Originally Posted by Moemg

I think a 75k pension certainly trumps $300,000 in savings .It is equal to almost $2,000,000 in savings and probably includes health benefits . Good work Mulligan !

I certainly feel fortunate now, but when I started my career it wasn't even a thought. No health benefits, but for now it is pretty cheap for an individual plan here. Pension is based on final 3 year ave. Got a few breaks late in my career, otherwise I spent a great part of my career under 40k, so my needs aren't extravagant.

NW-Bound · 11-17-2012, 04:51 PM

I don't know about the 20X the annual salary of the two of us combined. Even adding my 2 homes to our stash, I am nowhere near it. Hah!

What I am betting on is that our expenses are 3.5%WR. That's my number and I am sticking to it. If somehow I fall short in the future because investment returns are below the historical average, they will give me my SS and take away from people who manage to live on 2.5%WR and sit on a big pile.

Hey, means testing is not all bad if I am going to profit from it.

pb4uski · 11-17-2012, 04:53 PM

Quote:

Originally Posted by rec7

.....According to recent estimates, there are 58 million Americans between the ages of 50 and 64. The median retirement savings for this group is only $26,000 per person.

I recently helped a good friend who is 58 with his retirement planning and was a bit shocked that his 401k balance was less than my annual 401k contributions the last year few years that I worked.

I just can't believe the number of people that have access to a 401k with a 50% or better match and do not even contribute an amount sufficient to get the free money.

samclem · 11-17-2012, 04:54 PM

Quote:

Originally Posted by Katsmeow

Ghilarducci is well known to be hostile to 401(k) and seems to want us all in annuities . . ..

Righto. In fact, according to her previous writings, she wants us all in government-backed annuities with an elimination of individually-owned 401Ks.

samclem · 11-17-2012, 04:55 PM

Quote:

Originally Posted by pb4uski

I recently helped a good friend who is 58 with his retirement planning and was a bit shocked that his 401k balance was less than my annual 401k contributions the last year few years that I worked.

Well, that probably simplified the retirement planning process a lot.

mathjak107 · 11-17-2012, 06:13 PM

Quote:

Originally Posted by pb4uski

I recently helped a good friend who is 58 with his retirement planning and was a bit shocked that his 401k balance was less than my annual 401k contributions the last year few years that I worked.

I just can't believe the number of people that have access to a 401k with a 50% or better match and do not even contribute an amount sufficient to get the free money.

Same here, i also helped a friend with his planning. I was shocked looking at the lifestyle,the benz and the house and just how little they accumulated. Well they retired this year and next month are leaving nyc for florida. There was no way they could even consider staying here on what they saved

coolowl · 11-17-2012, 06:55 PM

I am so glad I happened on this thread today and especially am thankful to the folks who mentioned the amount of their net worth. I don't have nearly the numbers in my investments/savings that people in this forum have. Until reading this thread I thought I was alone. It's nice to know that there are some others who aren't millionaires.

I don't know how you all did it. I worked a steady 9-5 job, saved as much as I could and don't know how I could have saved/invested more. Those of you with millions....Jeepers. How'd you do it? You either had some super high-paying jobs, you inherited it, or what....

Anyway, good for you.

NW-Bound · 11-17-2012, 07:16 PM

I cannot answer for others, and can only speak for myself.

Yes, I have a 7-figure net worth. It does not come from inheritance, nor from being a small business owner, and only from our pay. I was among the founders of a couple of small tech start-ups, and that actually cost me money due to lost wages (worked for stocks that became worthless).

My money came from a LBYM lifestyle, no marital problems, children attending public schools, regular 401k contribution, and also after-tax savings, etc... The wind on my back from the stock market in 1980-2000 also helped a lot.

We were a dual-income couple, working for megacorps (both are among the Dow 30). Good pay, but not outrageous. No stock options as that privilege at our established (stodgy!) megacorps started at about 2 or 3 grades of pay higher than we ever attained.

So, it's just money accumulated after 30+ years of nose-to-the-grind-stone work. I've got a flat nose to prove it.

PS. I made the above joke because I recalled a conversation with another guy, early in my career. This guy did not believe in working hard, because he said all one would get for keeping his nose to the grinding stone was a flat nose. Well, if I see this guy again, I will say that my nose is still intact, and yet I have a stash to retire early on. Heh heh heh...

ER Fireball · 11-17-2012, 07:48 PM

Quote:

Originally Posted by Moemg

I think a 75k pension certainly trumps $300,000 in savings .It is equal to almost $2,000,000 in savings and probably includes health benefits.

So, how do you put a value on a pension plus health care benefits?

For many years it was proclaimed that the folks toiling away at the 'old brick and mortar' businesses were the stupid ones. The road to the future was jumping jobs and running to wherever the big money was being made.

Now, when it comes times to close out this career and move on to the next big thing, some of us are fortunate enough to have a pension and health care benefits in retirement. My calculations for 'how much is enough' are simpler in some ways, simply because I know that a significant amount of my expenses are covered. And if everything crashes, well, we will still be in a better place than the vast majority of people out there.

PV = f(# of payments, payment, interest rate)

# of payments = years left converting oxygen to carbon dioxide
Payment = pension payment
interest rate = ? expected portfolio return - inflation rate? for non-COLA pension? Would this be the same rate as a 'safe withdrawal rate'?

Mulligan · 11-17-2012, 08:50 PM

Quote:

Originally Posted by ER Fireball

So, how do you put a value on a pension plus health care benefits?

For many years it was proclaimed that the folks toiling away at the 'old brick and mortar' businesses were the stupid ones. The road to the future was jumping jobs and running to wherever the big money was being made.

Now, when it comes times to close out this career and move on to the next big thing, some of us are fortunate enough to have a pension and health care benefits in retirement. My calculations for 'how much is enough' are simpler in some ways, simply because I know that a significant amount of my expenses are covered. And if everything crashes, well, we will still be in a better place than the vast majority of people out there.

PV = f(# of payments, payment, interest rate)

# of payments = years left converting oxygen to carbon dioxide
Payment = pension payment
interest rate = ? expected portfolio return - inflation rate? for non-COLA pension? Would this be the same rate as a 'safe withdrawal rate'?

Many people compare them to a value of a purchased annuity, but comparing it to someone's asset base isn't very meaningful because there usually is no legacy value after death. But it sure makes budgeting and daily life easy. It's just like having a monthly paycheck except in retirement. Spend X each month , save X each month and wait for the next one the following month. Even a simpleton like myself can do that!

rescueme · 11-17-2012, 08:50 PM

Quote:

Originally Posted by ER Fireball

Would this be the same rate as a 'safe withdrawal rate'?

It is the inverse of a 4% withdrawl rate. Multiply $75k x 25 and you come up with a portfolio value of $1,875,000. A 4% annual withdrawl would get you that $75k/year.