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Old 11-04-2009, 07:20 PM   #21
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Hold the presses!!!! They could be right IF you have some money stashed in a 401K and a pension and are covered by a health plan and eligible for SS. These folks are not preaching to ER types, rather the drones who have tunnel vision and work to 65 and die a year later. When you factor in full SS benefits and a shorter retirement life span, it becomes easier to get to their percentages. We just had a different set of goals for our retirements and added a lot of years to our post career life.
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Old 11-04-2009, 10:20 PM   #22
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I thought the article was just terrible. "Studies show..." is very flawed. Which studies? What exactly did they show?

And, yes it sets up an impossible situation. If you need 80% or 90% of pre-retirement income (that must be after tax income, surely) them how to people ever save up enough?

Even leaving all that aside you have to look at your situation. Many types of expenses will go down in most retirements (child related expenses, work related expenses, commuting expenses, and so on). Some may go up. For us, perhaps health care related particularly if one of us retires before 65. We don't really like travel all that much so it may go up a bit but not that much. As for expensive hobbies...thankfully we like to play World of Warcraft and that is cheap.

Just this evening we were talking about what we would need in retirement and it is about 25% of our current gross income and even that leaves a lot of room for reduction if needed.
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Old 11-04-2009, 10:55 PM   #23
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Kinda like "THEY say"... I'm sure if you asked the after tax question - it would be 80-90% of after tax income would be the after tax amount you would need to retire 'safely'...

Just before I ER'd I met with one of these financial guru's with their mantra's and one size fits all approach -- He assured me I didn't have anywhere's near what I needed to retire, but he could sell me some heavily loaded funds and insurance to help me out. I asked him if he had any funds w/o loads and told him I didn't want the insurance. We parted company after I received the $50 check for listening to his spiel... Needless to say I still smile about it after 7yrs of ER... It is unfortunate these gurus are able to scare some folks from very sound retirement opportunities...
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Old 11-04-2009, 11:40 PM   #24
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We're living on about 40% of our w*rking w2 at this time. However, we were at 66% of w2 when I was w*rking. So, not much of a sacrifice, since much of the difference (between 66 and 40) is taxes and w*rk related expenses. Same standard of living + a bit of travel.
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Old 11-05-2009, 12:34 AM   #25
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Years ago, when this was Dory's board, we had a conversation about this among retirees. Most of us (that responded) were living in the range of 20 - 35% of pre-retirement income.
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Old 11-05-2009, 07:39 AM   #26
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Of course how much you make is also important. Someone on minimum wage will probably need 100% of their pre retirement income. It will have been difficult to save for retirement because they probably won't have a 401k and won't have had much left over after expenses to fund an IRA. The only thing they have going for them is the larger relative SS they'll get when compared to someone making a lot more money.
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Old 11-05-2009, 10:18 AM   #27
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Quote:
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Years ago, when this was Dory's board, we had a conversation about this among retirees. Most of us (that responded) were living in the range of 20 - 35% of pre-retirement income.
Yep - with brief excursions into really cheap SOB land - for health reasons(mine) I listened to her 'suggestion' that I loosen the purse strings AFTER:

A one year 12% all time never to be repeated best and final 'really frugal' in the 90's.

heh heh heh - I backed off when she made me 'an offer I could not refuse' .
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Old 11-06-2009, 06:41 AM   #28
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What really comes out of this is that if you want to retire and maintain your lifestyle you have to LBYM pre retirement. So you'd better be living on 70, 50 or 30% of your income and saving the rest for retirement and the smaller the fraction you live on the more financial security you'll have.

That should be the first thing out of a "financial guru's" mouth. Unfortunately I see LBYM becoming increasingly difficult without a radical rethink of what most people consider a resaonable lifestyle
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Old 11-06-2009, 07:18 AM   #29
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What really comes out of this is that if you want to retire and maintain your lifestyle you have to LBYM pre retirement. So you'd better be living on 70, 50 or 30% of your income and saving the rest for retirement and the smaller the fraction you live on the more financial security you'll have.

That should be the first thing out of a "financial guru's" mouth. Unfortunately I see LBYM becoming increasingly difficult without a radical rethink of what most people consider a resaonable lifestyle
It constantly amazes me when I encounter people who think that their paycheck is an allowance that regulates how much they can spend until they receive the next paycheck. I am nice, though, and haven't ever said, "Are you on CRACK?" when hearing someone talk like that.
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Old 11-06-2009, 07:19 AM   #30
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I think it is impossible to read guidleines, and think it may apply. As stated above, too many variables- income during working years, savings, children, mortgage etc.

Though we are still 17 months out, we tracked expenses for years with Quicken, and determined what we wanted to live on based on history. Admittedly, we have been good savers, and we have tweaked the plan. But we have been living (spending) now comfortably only what we expect our retirement expenses to be after retirement for 3 years now. We also plannned and saved for medical expenses/premiums since we will FIRE at 55. This has given us comfort knowing our budget is realistic, and confirming we can maintain this during retirement with savings and DH small pension. We budgeted 3.5% inflation, 0% returns until retirement, and 6% after retirement. For SS we are assuming only 75% of what might be available- and still have some room. We also have a budget for car replacements, maintenance etc.

I do think retirment is a plan that has to be worked and tweaked. If you can "try it on" before jumping in, it really helps!
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