I lifted this from another forum (that some here frequent), thought it was a good rule of thumb, at least for those without pensions and/or not counting on Soc Sec in large part.
Maybe #3 is the de facto LBYM threshold...just sayin'
When I was still working, too many people I knew were saving less than 10% unfortunately. Some had nothing at all saved at 40 and 50 years old, even though they had steady employment with us.
You can use math, too, and transcend the rules of thumb. Note that the post has been updated with a quick & dirty spreadsheet from Arebelspy:
How many years does it take to become financially independent? | Military Retirement & Financial Independence
With reasonable assumptions on financial rates of return, things happen a lot faster when you're able to save 40%. But 30% ain't so bad either.
I'd like to raise a somewhat related question. After spending years saving although not at the 30% level recorded here we have 2 military pensions and DW will have a small county pension (all covered somewhat by cola). We then have our retirement savings and will get something from SS. I expect we will be doing well with the pensions and SS once we get to 66-67. So our retirement savings will only be needed between retirement and SS dates.
At the SS point, we will have a pot of retirement savings and some other investments that will be above 1M. It will be nice to have a backup if we need long term care, but when do we start spending it? I don't want to die with lots of $$. Anyone on this forum having FIRE and have similiar thoughts? I don't need a new house, don't need to buy any more things, will will be able to travel and do charity. I guess it is about when I make the transition from saving saving saving to why save more when you have met the goal.
I know this sounds crazy, but I wanted to see if others have similiar thoughts. Thanks
This is the part of retirement where you have to be responsible for your own entertainment. You might want to start spending a little now, and accelerate as you near your filing date for SS.
Not only have you annuitized almost all of your income, but you might even be at the point where your monthly pension deposits could pay for your long-term care-- and with a COLA, too. For example, my father's care facility costs $214/day in a large Western city. His pension & SS income covers more than half of that. His SS has a 3.6% COLA this year, and it'll be interesting to see what happens to the cost of his care facility.
So it's worth looking at your budget to see whether you've just succeeded in the legendary self-insuring for long-term care.
Aside from the LTC perspective, here's what you can do with your money:
1. Find a cause you care about, and gift at least 10% of your income every year. You can do it anonymously through a charitable gift fund like Fidelity or DonorsChoose.org. If you want suggestions, "The Military Guide" royalties are being donated to Wounded Warrior Project and Fisher House. But we also give to a local food bank, a local homeless shelter, and a local surf access program.
2. Gift your kids (or nephews/nieces) and suggest that they fully fund their TSP or 401(k) or IRAs.
3. Start a 529 account for some family youngster.
4. Buy a nice car. Not a red Ferrari, but a nice car that you wanted when you were in your 20s and didn't have the money. If it's still killin' ya to spend the money then buy it used. If even that's not working then take a look at a late-model Toyota Prius. Or a Shelby Mustang. Or at least test-drive a Tesla.
5. You don't need a new house, but you might want to remodel the one you're in. Energy-efficient insulation & windows? Photovoltaic panels or solar water heating? An extra bedroom/bathroom? A bigger kitchen?
6. A housecleaner.
7. A yard service.
8. Surfing lessons.
9. Serious walking shoes that encourage you to put in five miles a day on the streets or the local trails.
10.
[Insert idea here from Ernie Zelinski's "Get-A-Life Tree"...]
We've done #1, 2, 4, 5, 6, 8, and 9. I haven't made the time to get going on #10 yet.
