all you need is ~600K by age 50 to retire

[Teacher Terry]

shabby, I totally agree.

 

[Perryinva]

Yup. +2

 

[sab6499]

N

 

[Danmar]

N

Totally agree.

 

[alaska55]

Originally Posted by militaryman View Post
Dear ole Mom (76) lives on $1361/mo ( combined SS and CSRS survivor benefit pension )

This is net after health/dental premium ($270) and medicare premium

Home is paid off ( +55 community )

Federal Employee Health care working in tandem with Medicare

Energy Assistance pays most of Electricity....

Prop Tax limited due to Age/income....

Small 30K emergency fund

Older Buick will probably not be replaced when it dies.... will just use Free Senior Transportation that comes around a few times a week

Her Emergency Fund has seemed to be growing month to month

She does not seem to be dissatisfied with the amount of money available to live on

Eats out every other day at a modest restaurant and has Cable TV and Internet



I think it helps immensely to retire in an area that has a support network (transportation, local/close amenities) of course debt free and medical paid for.



Before my Father passed last year the two of them lived on a little more but also had higher (family) health premiums, and some Rx expenses tied to Dad. Certainly they lived off of less than $1700/mo net for the last 20 years from age 55-75

Somebody (i.e. taxpayers) pays for all of these "free" benefits.

What on that list is a big use of taxes? You might come with one, which is the Energy Assistance but alot of that comes from donations which you could help with when you pay your bill.

 

[HadEnuff]

This is for a family of two.

if you can accumulate around 500-600K by age 50, that will help you survive for 17 years till age 67. From 67 you can start taking your full SS benefit; You get your amount (say 2600) and your non-working spouse gets 50% of that (1300) totaling 3900 per month. Since the medicare will take of your healthcare costs, 3900 will be good enough to survive for the rest of your life.

So the absolute minimum you need to save by 50 to retire safely is 600K. For each later year you retire, you can reduce the 600K by 50K / year. Does this sound reasonable? Not saying we can retire with 600K at 50 as it depends on economy and its good to have some buffer, but if we want a number this sounds like the absolute min. needed

- Sam

What would scare me about this plan:
1. it makes an assumption of what the buying power of 600K will be in 13 years, relative to what a safe investment AA might be,
2. it makes assumptions about the buying power of the "nut", over a period of 17 years. What happens to that buying power if a market crash reduces significantly the income generating ability of that nut, or if a period of rising inflation and poor market returns occurs.
3. It makes even scarier long range assumptions about the buying power of the "nut" plus SS benefits, starting at 17 years out, and running to end-of-life (which comes with a bunch of assumptions in itself).

I would wager that if 10 couples embarked on such a plan, at least 5 of them would end up like those couples we read about in those "Retirement not what they planned" articles, of RV nomads cleaning bathrooms for a free hook-up in the RV park.

I remember being 37, and dreaming of the day I would not have to answer the bell on Monday morning. I totally get that. And to have 600K by age 50 is a very worthy objective. I would consider it a great start, but not a great finish.

as others have said, YMMV.

 

[cnocmmz]

Thank you for posting this. I'm hitting 50 in 6 mos. and this post is exactly what I had in my mind for me to ER. I did not know that non-working spouse gets 50% also so thank you for that. I am READY !!!

Yeah,,,not so fast.. I would rethink that because if you are not yet collecting SS, a lot may change with the SS rules when you get to 67.?? I would recommend stay working if you do not have any other guaranteed income to at least 55 to build up that buffer. Just a thought, either way you have done an awesome job thus far.

 

[Music Lover]

I would wager that if 10 couples embarked on such a plan, at least 5 of them would end up like those couples we read about in those "Retirement not what they planned" articles, of RV nomads cleaning bathrooms for a free hook-up in the RV park.

I remember being 37, and dreaming of the day I would not have to answer the bell on Monday morning. I totally get that. And to have 600K by age 50 is a very worthy objective. I would consider it a great start, but not a great finish.

as others have said, YMMV.

I disagree. I think that a lot more than 5 in 10 can live comfortably on $3900 a month. And none of them have to live in a falling apart RV to do so.

 

[HadEnuff]

What would scare me about this plan:
1. it makes an assumption of what the buying power of 600K will be in 13 years, relative to what a safe investment AA might be,
2. it makes assumptions about the buying power of the "nut", over a period of 17 years. What happens to that buying power if a market crash reduces significantly the income generating ability of that nut, or if a period of rising inflation and poor market returns occurs.
3. It makes even scarier long range assumptions about the buying power of the "nut" plus SS benefits, starting at 17 years out, and running to end-of-life (which comes with a bunch of assumptions in itself).

I would wager that if 10 couples embarked on such a plan, at least 5 of them would end up like those couples we read about in those "Retirement not what they planned" articles, of RV nomads cleaning bathrooms for a free hook-up in the RV park.

I remember being 37, and dreaming of the day I would not have to answer the bell on Monday morning. I totally get that. And to have 600K by age 50 is a very worthy objective. I would consider it a great start, but not a great finish.

as others have said, YMMV.

I disagree. I think that a lot more than 5 in 10 can live comfortably on $3900 a month. And none of them have to live in a falling apart RV to do so.

But your missing the bigger point about the viability of the assumptions, over what amounts to a period of maybe 50+ years. Assumptions about inflation, SS benefits,investment performance, health.....

Certainly, today, with today's purchasing power, one could live on $3900/month. The bigger question is what happens to that over half of a century.

 

[Music Lover]

But your missing the bigger point about the viability of the assumptions, over what amounts to a period of maybe 50+ years. Assumptions about inflation, SS benefits,investment performance, health.....

Certainly, today, with today's purchasing power, one could live on $3900/month. The bigger question is what happens to that over half of a century.

Not everyone living on $3900 a month needs that much. Some may only need $2500. Plus there is some inflation built into SS, correct?

$3900 is plenty of money for many who LBYM, don't live in a HCOL location, and don't have expensive hobbies. I know several people who barely made that much in their best years and have retired on less.

 

[HadEnuff]

Not everyone living on $3900 a month needs that much. Some may only need $2500. Plus there is some inflation built into SS, correct?

$3900 is plenty of money for many who LBYM, don't live in a HCOL location, and don't have expensive hobbies. I know several people who barely made that much in their best years and have retired on less.

no doubt. and many who have retired on more than that, based upon assumptions far more conservative, and over shorter timespans, have wound up destitute.

I'm not saying it's impossible, but the longer one projects, and the more assumptions one makes, the bigger the risk of it not working out as planned.

 

[Teacher Terry]

I know I have mentioned it before but I knew 2 couples that retired on a tight budget in their late 40's and by 60 were sorry. They had to keep pinching pennies and were not able to travel or go out like their friends were doing. Yes you could move to a very LCOL but is that what you want to do when you are older and have to make new friends, etc?

 

[Music Lover]

I know I have mentioned it before but I knew 2 couples that retired on a tight budget in their late 40's and by 60 were sorry. They had to keep pinching pennies and were not able to travel or go out like their friends were doing. Yes you could move to a very LCOL but is that what you want to do when you are older and have to make new friends, etc?

Well, if they live in a HCOL area and enjoy extensive travel, then maybe $3900 a month isn't enough for them. But, there are millions of people that don't fit those parameters and can live quite well on $3900 a month.

It all depends on your lifestyle.

 

[Teacher Terry]

My point was that originally people had enough but as time and inflation take control living in a MCOL gets more expensive and eventually the life they enjoyed evaporates and now they are just surviving.

 

[Major Tom]

I know I have mentioned it before

Hehehe - seeing that we often discuss the same (or at least, very similar) subjects here on a regular basis, I think it's inevitable that many of us will make multiple near-duplicate replies. I know I do

but I knew 2 couples that retired on a tight budget in their late 40's and by 60 were sorry. They had to keep pinching pennies and were not able to travel or go out like their friends were doing. Yes you could move to a very LCOL but is that what you want to do when you are older and have to make new friends, etc?

Agreed, unless the individuals concerned are going into it with eyes wide open, and are convinced that they can happily live on very limited means for the rest of their lives (or have no choice). Few would willingly want to do that. I retired on a very limited income in my mid to late 40's, but with a conservative WR, and SS coming online in the future, there are good indications that I'll have more fun money in the years ahead. I would like to let it all hang out at some point in the future - or at least let it dangle for a while

It's important to know yourself and have a capacity for realistic planning.

 

[Teacher Terry]

I think age matters too. When my parents retired they had plenty of $ and a good pension. My Dad was sick but my Mom traveled and did the things she wanted to do. When my Dad died at 73 the pension went down because she got the survivor benefit. She still was able to travel etc on her $ saved. By 87 she no longer wanted to travel and had no $ left but still could live ok on her income. It was important to her to not leave a dime owing to anyone so her funeral was pre-paid and she instructed us to sell her car and then treat everyone that came to the fuenral to a lunch at the restaurant she specified. WE would have been happy to make up any difference but the car ended up being enough to pay for that meal. Now if she had lived longer she still would have been fine since she did not want to travel anymore. If she had wanted to travel we would have taken her on trips as gifts which we did a few times not because she did not have the $ but because we thought it was a better gift then things. I think the difference is not being able to travel at 60 is way different then not being able to at 87. Also I think sometimes people believe they will be content to do things that don't cost $ but once they have the energy and time they feel differently. Of course there will always be those people that are happy doing free things which is fine.

 

[Perryinva]

These have all been great points. Not sure if it was mentioned but I noticed most people talking about SS 17 years later (from 50 to 67), but this guy is 37 so he is actually estimating success based on SS 30 years from now? Are you kidding?? That is beyond a stretch.

And does it really make sense to assume you really know how you will want to live that far down the road? You read of posters saying “I’ll have more fun money and be able to do things once SS kicks in”. Hunh? The time to do fun things is sooner, when you still can, not once you can afford it but can’t. Its a balance thing. You may have to work longer to guarantee both.

At 37 my concept of what I would be/want to be doing when retired wasn’t even close to what the reality is now. Most everyone here remembers the scary inflation of 1978 through the early 90s. When living it, it seemed like there was no hope of ever getting ahead , not with mortgage rates in the 12+ % ranges, and watching significant price increases on about everything every year. I remember getting 10% raises and still wondering how I would ever save enough to invest and take advantage of the high rates. A DOW of 23000 was ludicrous. Anyone starting retirement on a tight fixed budget during that era was screwed. My parents, who were not smart investors, REed about 1982, because they thought they were rich with $500k back then, (real estate sales) and had no concept of SWR, found themselves working again (or mostly trying) in their late 50s early 60s to keep their SOL reasonably close and ended up lowering it significantly. They really never did anything because they were always worried about money. Only DF is left at almost 79, and life is TV, drs visits and bowling. They divorced in mid 60s, mostly because of money. DM would have been broke in 4-6 years had she lived past 69. She was pretty bitter about her view of how her life turned out, but it was all their own doing. I was surprised at that, as at least they lived a “highish life” for a while. Bad math skills and ignorance were their undoing.

Seen it, not worth it. Better to make less in a job you enjoy working longer, than more in one you despise so you can RE sooner, IMHO.

 

[Danmar]

It all depends on your lifestyle.

Yes. If you add the word “desired” before lifestyle you have distilled the last 265 posts.

 

[Music Lover]

Yes. If you add the word “desired” before lifestyle you have distilled the last 265 posts.

Very true...

 

[HadEnuff]

I have known many older retired people who are not living the retirement lifestyle they desired, or envisioned, simply because they overestimated the purchasing power, and/or the success of their investment strategies, because they retired earlier than they should have, based upon their overly optimistic assumptions.

So it's not just about the lifestyle you think you can be happy with. It's whether or not your dollars will provide you that lifestyle, over a period of, in the case of the OP, a half-century.

 

[RobLJ]

I actually agreed with most of your post, but then chuckled at the below. My greatgrandfathers lived to mid 90s in pretty good health, and all 4 grandparents lived into their 90s. My paternal grandfather was extremely active--had a cabin in Colorado and hiked and fly-fished into his early 90s before he slowed down; maternal grandmother was also preternaturally active.
I'm about to be 60 but hiked 12 miles with 2800 elevation gain Saturday. We biked in Southern Italy in August with our youngest and some Houston friends and had a great time.
60 is the new 50 or so I tell myself until it doesn't work. Admittedly, my grandparents were teetotallers and I'm. . . decidedly not (sipping Glenlivet right now).

Edit: the Tahoe Rim Trail in my backyard (I live in Reno) is a lot of travelling that's only 20-60 miles away, so that part isn't expensive. A couple gallons of gas. It reminds me of granddad's Colorado cabin 30 miles down valley from Aspen that he built himself when I was a shaver, for about 15k. Paradise. I probably wouldn't have semi-retired to Reno from Houston if it hadn't been for his example, and the love for hiking and fly-fishing I got from him.

And does it really make sense to assume you really know how you will want to live that far down the road? You read of posters saying “I’ll have more fun money and be able to do things once SS kicks in”. Hunh? The time to do fun things is sooner, when you still can, not once you can afford it but can’t. Its a balance thing. You may have to work longer to guarantee both.

 

[big-papa]

All you need is love (beatles July 1967) or a pop record with endless royalties. But seriously folks. Life's been good to me so far.

Wouldn't have seemed nearly as cool if it was "All One needs is love".

 

[Free bird]

Dow 50k coming up. A chicken in every pot. Make that two chickens. How much is enough?

 

[RobLJ]

Wouldn't have seemed nearly as cool if it was "All One needs is love".

All YOU need is love.
All I need is $600,001.50.

 

[Free bird]

They're floating the idea of reducing 401k contribution to $2400.00 max per year to pay for the tax cut. Truth is stranger than fiction.