Senior spending tapers off: Scott Burns

[Dawg52]

I received in the mail yesterday a Fidelity Investments "Blueprint for your Retirement" magazine. #1 on the list was that you need to allow for 85% of your pre-retirement income. Why do these firms keep publishing crap like this? I don't need 1/2 of what I make now and my guess is that is the case for most that post here. The % that one needs varies so much form person to person that to use the standard 70-85% rate just seems silly.

Oh well, that is my venting for the day. Time for another cup of coffee.  

 

[azanon]

You know what went through my mind when I read your post?
Wimpy urban liberal

Well, the military told me i was a trained killer after i finished basic, and even gave me this cool looking ribbon to wear for shooting expert.  You should have been there JG, it was so neat.  I could probably see about 20 other basic's targets including my own from where i was standing, and all of theirs had bullet holes all over the target (or were missing alltogether).  Mine was in a tight pattern in the middle  , and all accounted for.

I also made it to the finals in my squadron in the pugil stick competitions.  So apparently, i'm relatively adept at whooping some ass both at range and in close quarters.

So, wimpy i may or may not be, depending on who you ask.  But be as quiet as possible if you break into my house.  The beretta's under my bed and i dont miss.

 

[Mr._johngalt]

Well, the military told me i was a trained killer after i finished basic, and even gave me this cool looking ribbon to wear for shooting expert.  You should have been there JG, it was so neat.  I could probably see about 20 other basic's targets including my own from where i was standing, and all of theirs had bullet holes all over the target (or were missing alltogether).  Mine was in a tight pattern in the middle  , and all accounted for.

I also made it to the finals in my squadron in the pugil stick competitions.  So apparently, i'm relatively adept at whooping some ass both at range and in close quarters.

So, wimpy i may or may not be, depending on who you ask.  But be as quiet as possible if you break into my house.  The beretta's under my bed and i dont miss.

Good for you.

 

[azanon]

Dog51- I think it just comes down to what you have in mind for retirement.  I'm probably going to be thinking 70-80% of preretirement income simply because i'm going to want to take a few vacations, have decent automobiles, keep my house in tip-top shape, etc.  Yeah i could probably get by with less, but I want it to be a highly enjoyable experience that's going to include those things.  

I think having a margin of safety is nice anyway; meaning you may only need 50%, but you have that extra 20% just as a buffer.  It'd be nice if we could die exactly broke on the nose, but that's not very realistic.

 

[azanon]

Good for you.

Unfortunately, those were my two high points.  I withdrew from the Air Force Academy about 2-3 months into the school year cause i just wasnt making the grades.  Oh sure, they wanted me to stay anyway (i guess because they lose a great deal of money allocated to my being there, which is lost when i left).  I was in the process of earning 3 F's for my first semester.   I just wasn't academically prepared for it at the time.  It'd be a struggle for me academically, even today.

But i will say, Basic Training was one of the, if not the, most incredible expreiences of my life.  They really did make me a trained killer.  I remember being scared of big bullies and things like that before i went in.   After that experience, i felt like i could kill anyone.  Sure, that probably isnt true, but the point is you'd die trying.

The last (physical) fight i ever had with my older brother was 2 months after i withdrew from there.  Up until then, he had won every one.  I beat him so bad that incident (it was a sun morning), i didnt even wrinkle my Sun morning clothes.   We've been much closer and nicer to each other every since then.

 

[FlowGirl]

I received in the mail yesterday a Fidelity Investments "Blueprint for your Retirement" magazine. #1 on the list was that you need to allow for 85% of your pre-retirement income. Why do these firms keep publishing crap like this? I don't need 1/2 of what I make now and my guess is that is the case for most that post here. The % that one needs varies so much form person to person that to use the standard 70-85% rate just seems silly.

Oh well, that is my venting for the day. Time for another cup of coffee.

85% seems exceptionally high, especially if you're looking at a traditional retirement age where the money doesn't have to last that long. If you're saving even 10% of your income then that knocks it down to 90%, and the savings on taxes and SS should push it below 85% without a problem. Throw in a paid-off mortgage, children out of the house, etc. and I would guess most people could do well on much less.

Since the spouse just got promoted, I recently redid our family spreadsheets and found that 25% comes right out of pay before we even see it (10% to TSP, SS, taxes, etc). Due to husband's job we have a very light tax load, so most probably see even more than that come out. Additional retirement savings and job related expenses knock that down to 68% of gross. Out of that we pay everything else - housing, groceries, travel, 2 vehicles... and the money just keeps piling up in our account. Since we are very comfortable at this level, we're targeting at least 70% of current gross ( or 100% of current "take home" pay) adjusted for inflation. We are still 12-15 years from ER, too far out to know what our real retirement expenses will look like, but this gives us something to shoot for in the meantime.

 

[Sheryl]

I am thinking that our spending may end up being about the same as pre-retirement -  although I will not be "saving" 25% of my income, or paying the higher tax rates,  I am hoping to start doing all the things I don't have time for now -  especially travel.  Even though we are shoe-string type travelers, 3 international trips a year is what I dream of - that's $5k just in airfares.    Scuba diving in most good dive spots is $100 per day....

SO loves to putter on home and garden projects, and every trip to Home Depot is another $100 minimum...

I also love taking classes in anything and everything - in the past couple years I've done chinese landscape painting, tennis, investing 101 (waste of money!) and green building design.

I see wanting to feed that habit even more generously when I have the free time.   So I plan on aiming for approx. the same spending as now.  But it's important to differentiate "spending" from "income."  Right now I'm not spending all my income.



Vocabulary word of the day:  Dilettante

 

[SteveR]

I received in the mail yesterday a Fidelity Investments "Blueprint for your Retirement" magazine. #1 on the list was that you need to allow for 85% of your pre-retirement income. Why do these firms keep publishing crap like this? I don't need 1/2 of what I make now and my guess is that is the case for most that post here. The % that one needs varies so much form person to person that to use the standard 70-85% rate just seems silly.

A couple of reasons come to mind.

1. Consider the source.  What does the source have to gain by having people believe they cannot retire on less than 80-85% of their current income?  

2. Conventional wisdom.  It is much easier to keep up the same mantra that has been used over the past several years than to actually explain to people that you can live very well on less.

3. 80-85% of most people's income (excluding many here) would be Required in retirement to pay off existing debts and to continue to fund excessive spending.  So, in fact, this statement may actually be true for most of the general population.  If people I know are any indication of the general population then I would guess more like 95-100% would be required in retirement.   :