Retiree Finances Survey - article

[TheWizard]

I'd hate to think about retirement with only $514K in assets.
When RMD's kick in, you are immediately in partnership with Uncle Sam.

Don't quite understand this part.
I've been in partnership with Uncle Sam (paying income taxes) since starting full-time employment in 1973.
Why would anyone expect that to change in retirement, before or after starting RMDs?

 

[jazz4cash]

That average SS payout of $1500/mo does not seem representative for new retirees. As a couple that always had good income but never close to the max for SS, we could survive easily i think on SS FRA benefits only with no savings but it would be a lean lifestyle. It might get ugly after one spouse dies.

The irony is that those good incomes along with discipline allowed us to save and retire semi-early.

Edit: i see the average SS payment increased from $1543 to $1657 for 2022.

 

[pjigar]

That average SS payout of $1500/mo does not seem representative for new retirees. As a couple that always had good income but never close to the max for SS, we could survive easily i think on SS FRA benefits only with no savings but it would be a lean lifestyle. It might get ugly after one spouse dies.

True story: One of my tenant was a "retired" (on SS) couple and their mom-dad (also on SS). Dad passed away and they could not afford the rent anymore so they moved out and went on to rent an apartment in LCOL. This reminded me that assets give you choices. YMMV.

 

[athena53]

That average SS payout of $1500/mo does not seem representative for new retirees. As a couple that always had good income but never close to the max for SS, we could survive easily I think on SS FRA benefits only with no savings but it would be a lean lifestyle. It might get ugly after one spouse dies.

I've seen it happen a lot- one woman in my church had told me that she and her husband spent their retirement savings on their dream trip to Europe after retirement but they'd be OK on SS alone. And they were, sort of, till he died. She had to sell her little 2-BR house (listing said that the owner would not be making any repairs) and move into a studio in a retirement home. I know of two other women left in similar situations- and that's just in my church.

 

[ExFlyBoy5]

I've seen it happen a lot- one woman in my church had told me that she and her husband spent their retirement savings on their dream trip to Europe after retirement but they'd be OK on SS alone. And they were, sort of, till he died. She had to sell her little 2-BR house (listing said that the owner would not be making any repairs) and move into a studio in a retirement home. I know of two other women left in similar situations- and that's just in my church.

They spent ALL of their retirement on a single vacation? Did they traverse Europe in a private jet? It seems like they weren't well prepared in the first place if they blew it on a single trip.

 

[jazz4cash]

They spent ALL of their retirement on a single vacation? Did they traverse Europe in a private jet? It seems like they weren't well prepared in the first place if they blew it on a single trip.

Was thinking the same thing. Maybe they went ultra-luxe but most likely they had a bit of savings but not so much in the grand scheme of things.

 

[ExFlyBoy5]

Was thinking the same thing. Maybe they went ultra-luxe but most likely they had a bit of savings but not so much in the grand scheme of things.

If I were to guess it would be a lack of savings. I have a good friend who mentioned how impressed and happy he is that he has amassed $50K for his retirement. He is almost 50 years old.

 

[athena53]

They spent ALL of their retirement on a single vacation? Did they traverse Europe in a private jet? It seems like they weren't well prepared in the first place if they blew it on a single trip.

No, they weren't that way at all. I suspect there were no private jets and no chartered yachts and they didn't have very much saved. Maybe they figured that conserving it wouldn't make a big difference in the long run, which was probably true.

Could be PLUS loans on behalf of their children.

I've also see a lot of sad "I can't pay my student loans" stories from people who decided to change careers or get an advanced degree in their 40s and then found that their salaries didn't change enough to make the degree worth their money.

 

[jazz4cash]

The attitudes towards money can be startling. My 84 yo relative has SS only which is much less than the average and an inheritance of 100k. Saving grace for her is Tri Care and no Medicare premium. She lost her very lovely home due to cost of assisted living for now deceased husband. She was fortunate to qualify for a subsidized senior apt. They bent the rules to let her in. She thinks 100k is a huge sum and always mentions the “big pay raise” she got from SS.

 

[daylatedollarshort]

I've also see a lot of sad "I can't pay my student loans" stories from people who decided to change careers or get an advanced degree in their 40s and then found that their salaries didn't change enough to make the degree worth their money.

We've heard more than once our neighbors say that their kid was accepted at [fill in the blank expensive university], now we just have to figure out a way to pay for it. Like that was a normal thing for parents to do. I have never heard any of them say we just bought a a stock portfolio or a house for $300K now we just have to figure out a way to pay for it, but somehow thinking like this about college has become almost normalized in the U.S. today.

 

[Music Lover]

The attitudes towards money can be startling. My 84 yo relative has SS only which is much less than the average and an inheritance of 100k. Saving grace for her is Tri Care and no Medicare premium. She lost her very lovely home due to cost of assisted living for now deceased husband. She was fortunate to qualify for a subsidized senior apt. They bent the rules to let her in. She thinks 100k is a huge sum and always mentions the “big pay raise” she got from SS.

Realistically, if someone is living on less than avg SS then $100K is a lot of money...it would represent 8 or so years of income. It's about the same as someone spending $120k a year who gets $1 million.

 

[F.I.R.E User]

Is there a survey for an average F.I.R.E retiree?

 

[jazz4cash]

Realistically, if someone is living on less than avg SS then $100K is a lot of money...it would represent 8 or so years of income. It's about the same as someone spending $120k a year who gets $1 million.

Except she is not living on less than avg SS. She has to supplement from the inheritance. Point taken, though….she can easily stretch that out over her lifetime. The problem is she thinks she can afford a new car, take a cruise, and other luxuries, but so far she has refrained.

 

[mickeyd]

I wonder what the results would have been if all ER posters here would have would have exclusively taken this survey. No doubt, the survey results would have been much, much different.

 

[djsander]

There are always articles about the average person this or that. I’ve strived to be above average. So far it has worked out pretty good for me.

 

[Navigator]

Put me down as a skeptic. This is based on an online survey, which would seem to bias the results. It claims only one in three people are financially prepared for retirement, but this seems to be contradicted by their data. It says that the average retiree has $191,659 in retirement funds and outspends income by just over $4,000 per year. If I do the math right, that means the average person can be retired for about 47 years. I’m an optimist, but even I don’t think I’ll be retired that long.

 

[Masquernom]

The article uses the "expert-recommended $514,800" needed to finance retirement. Those with $191,000 are thus already far in the hole. Spending $4,000 each year from that $191,000 gets them further in the hole.

I assume the $514,800 would include something like the expected $200,000 in health care cost in final years of life. So you can't really divide the $191,000 by the $4,000.