How much minimum monthly retirement income should be enough for retire?

[RetireeRobert]

OP, yes you "can" retire.

Whether you "should" retire all depends.

[Shinge1233]

Quote:

Originally Posted by cyber888 It depends on what's your pension .. and what's your expenses. Do you have a lot of leeway. When you say enough .. you receive $3000 and spend $3000 ? Or do you receive $5000 and spend $2,500.

The following are my conditions:

My monthly pension can covers the most current average monthly basic expenses plus 20% extra.

Also, approximate 30% of extra 457k monthly fund for emergency and vacation uses ( 4% of my total assets).

Therefore, I have 1.2x 1.3 = 1.56. 56% extra fund can be used every month and set aside.

SS doesn't count on yet because it requires 62 yrs above to collect it.

house has been paid off

Pension covers medical insurance. I can pick PPO or HMO.

Is it safe to retire? Or still wait....

[RobbieB]

You can retire. There is no safety.

Roll the dice!

[Sunset]

Quote:

Originally Posted by Shinge1233 The following are my conditions: My monthly pension can covers the most current average monthly basic expenses x 1.2 30% of 457k monthly fund for emergency and vacation uses ( 4% of my total assets). SS doesn't count on yet because it requires 62 yrs above to collect it. house has been paid off Pension covers medical insurance. I can pick PPO or HMO. Is it safe to retire? Or still wait....

OP - Plain numbers would be a much better way to ask.
Nobody can tell if your house expenses are realistic as you don't say what they are.

The bold part means to me, 30% of your 457K = 4% of total assets

How much do you plan on spending on vacations, and how many vacations do you plan per year.

Hopefully you did firecalc and other retirement calculators from other sites, plus used the simple rule 3.5% of savings (not counting house) should be at least equal to annual income needed.

[gauss]

Quote:

Originally Posted by mistermike40 The Pension Benefit Guaranty Corporation (PBGC) guarantees tens of millions of private-sector pensions, including mine. There is a benefit cap that varies by age (and possibly other factors). In my case, my pension is 100% insured (assuming PBGC's solvency).

+1

One thing that I learned about this, that wasn't obvious, is that you may be at risk during your first 3 years of retirement -- especially if you have a well funded pension plan (ie near 100%).

For a fully funded pension plan, only those that have been retirement eligible for at least 3 years can split this part of the money in a PBGC termination. Those with less than 3 years of retirement eligibility will be at the end of the line and likely only receive the PBGC minimums which are heavily discounted for age.

Suffice it to say, I was real nervous starting in March of last year when DW only had about 2 years in and the Pandemic hit and I learned this rule for the first time when checking on PBGC guarantees for her pension.


We can discuss this further in a separate thread if anyone is interested.

[DrRoy]

I think you can retire. I find that I am spending more than I did before RE. A good bit of that is because I am overfunded and the market has been good. I could adjust spending down if needed but it is so nice not to have to.

[Time2]

Quote:

Originally Posted by Shinge1233 The following are my conditions: My monthly pension can covers the most current average monthly basic expenses plus 20% extra.

most?

Quote:

Also, approximate 30% of extra 457k monthly fund for emergency and vacation uses ( 4% of my total assets).

I don't know what this means.

Quote:

Therefore, I have 1.2x 1.3 = 1.56. 56% extra fund can be used every month and set aside.

So if all of your monthly expenses are $5,000 and you have $7,803 coming in every month, and the $7,803 is reasonably secure, I would say that you could retire. Especially with SS being icing on top of all that.

Quote:

SS doesn't count on yet because it requires 62 yrs above to collect it. house has been paid off Pension covers medical insurance. I can pick PPO or HMO. Is it safe to retire? Or still wait....

[scrabbler1]

Shinge, just comparing your situation to mine suggests you can retire. I needed to have a reasonably reliable income stream using my non-retirement assets and income streams such as SS, while keeping a decent cushion for unanticipated expenses. Then, when I become old enough to include my retirement assets and income streams (my "reinforcements"), my financial picture only gets better. You have this and health insurance already covered, at least through age 65 (I didn't always have that, especially prior to the ACA). You surely look good to go!

[Koolau]

One of the reasons we hedge on saying "yes" or "no" is that none of us knows the future. It sounds like you have enough to meet expenses into your future (only you know how accurate your numbers are.) You have SS on the horizon to fill in the lumpy bits. BUT none of us knows how our lives will turn out. We often speak here of "black swan" events (those that are unlikely, but DO occasionally happen to someone.) For many of us here, we worry about long term care - which could bankrupt almost anyone at $10K/month (for one person) if you live long enough in a care facility. What about divorce or death of a spouse? At a minimum that will screw up your tax situation - and a lot more, though I have no experience, thank God.

You might spend a few hundred dollars on hiring a Certified Financial Planner (but do NOT get one who sells stuff - only pay by the hour.) Ask her to go over your numbers and assumptions to see if your projected income will cover your expected expenses. Ask for advice on where to place your money if you don't feel comfortable with what "we" do here (heh, heh, a WHOLE other area of fun!)

Let us know what FIRECalc says. Think about some "back ups" to your Early Retirement plan (Go back to w*rk? Move to LCOL area? Sell assets like the extra car or whatever? etc. etc.?)

If you are determined to ER, you can probably make it work. We just can't say yes or no and be as accurate as you can (once you do ALL the math and the what-if thinking.) Good luck because YMMV.

[Shinge1233]

Quote:

Originally Posted by Time2 most? I don't know what this means. So if all of your monthly expenses are $5,000 and you have $7,803 coming in every month, and the $7,803 is reasonably secure, I would say that you could retire. Especially with SS being icing on top of all that.

Thank you for your comments!

Let me talk you my exact number....

Every month average basic expense includes house, food , entertainment, repair...are $ 4100.

My pension is $5200 monthly plus 2% every year living adjustment.

$450000 457 k fund ...based on 4%rule.. I have $1500 every month to use for emergencies or vacation.

Social security at 62 , I have $2200 monthly approximate. But I am only 57 yrs old and need to wait 5 more yrs.

So... Total retirement income before 62 is $6700 monthly and average monthly expenses are $4100 . After 62, I will have $8900 monthly retirement income and $4100 expense plus inflation and living adjustment.

Therefore, I am thinking to retire...

[cfran]

I think your situation is that simple, you are good to go by a good margin and there is zero reason to overthink it!

[finnski1]

Quote:

Originally Posted by Shinge1233 Thank you for your comments! Let me talk you my exact number.... Every month average basic expense includes house, food , entertainment, repair...are $ 4100. My pension is $5200 monthly plus 2% every year living adjustment. $450000 457 k fund ...based on 4%rule.. I have $1500 every month to use for emergencies or vacation. Social security at 62 , I have $2200 monthly approximate. But I am only 57 yrs old and need to wait 5 more yrs. So... Total retirement income before 62 is $6700 monthly and average monthly expenses are $4100 . After 62, I will have $8900 monthly retirement income and $4100 expense plus inflation and living adjustment. Therefore, I am thinking to retire...

With those numbers and your health insurance covered seems like you are in very good shape. That's a very nice pension PLUS a COLA!
Enjoy your retirement.

[Dawg52]

Quote:

Originally Posted by cfran I think your situation is that simple, you are good to go by a good margin and there is zero reason to overthink it!

+1. Go for it.

[levindb]

As others have said, you are stating what your current expenses are, and that is a great start.

The next step, is to look at your FUTURE expenses. How about that world cruise you were dreaming about? Do you want to move to a new location? Close to ocean, warmer temps, maybe a lake and a small boat may be in your future. You seem to focus on retiring FROM something, but what will you be retiring TO? What will you do Monday morning after you retire?

I did not see any numbers for taxes in your brief summary and handling taxes in retirement is slightly different from when you are drawing a salary. To cover taxes with $50K of annual spending, you may need another $10K in pension/withdrawals.

Do you have, or will you have a spouse/partner to share your life with? Older folks with $$ become more attractive...

[Shinge1233]

Quote:

Originally Posted by levindb As others have said, you are stating what your current expenses are, and that is a great start. The next step, is to look at your FUTURE expenses. How about that world cruise you were dreaming about? Do you want to move to a new location? Close to ocean, warmer temps, maybe a lake and a small boat may be in your future. You seem to focus on retiring FROM something, but what will you be retiring TO? What will you do Monday morning after you retire? I did not see any numbers for taxes in your brief summary and handling taxes in retirement is slightly different from when you are drawing a salary. To cover taxes with $50K of annual spending, you may need another $10K in pension/withdrawals. Do you have, or will you have a spouse/partner to share your life with? Older folks with $$ become more attractive...

Yes, it is true. I might need to add 15% more for the federal and state taxes . So my pension is approximate $4400 per month after taxes with COLA and no debt. However my average monthly expenes are also conservative which is close to $3600 plus $500 for saving.
In fact, I would like to move to Florida if I can. My house value in Los Angeles is close to$700000. I believe I can get a small house for living and get other one for rental income in Florida, just in case. Of course, my wife will go with me. We just want a simple life in a little town.

[Chuckanut]

Quote:

Originally Posted by Shinge1233 My question ...When should I retire? What mean enough? . We always think not enough then never retire... If I have enough pension for my basic expense and have emergency or saving fund , and 457k set aside. Why do I need to work for?

Like many, I can't tell you if you should retire. But, I can share my story and you may take what you wish and leave the rest.

I had not thought I could retire earlier than 65-66. But, I was motivated to look harder when I lost several slightly younger than me loved-ones in their mid-50's. I first tried a Monte-Carlo calculator and later graduated up to FireCalc.

I was surprised (maybe shocked?) to find that the only thing between me and retirement was medical coverage. On the advice of a friend I went to a retirement presentation put on by the state for teachers and state employees. I found out that I could purchase medical coverage through one of the state plans offered to active employees. I had to pay the entire cost, but it was a good plan and still cheaper than buying one on my own. That was in mid-August. At the start of October I informed my principal that this was my last year teaching.

[1242Vintage]

Make sure the amount you estimate for state and federal taxes is reasonably accurate!

I retired back in May 2020 with a pension and other monies in 457 plan, 401(k) and IRAs and am doing my 2020 taxes now.

My biggest lesson-learned at almost a year into retirement is that I underestimated taxes and therefore didn’t have enough withheld from my monthly pension payments.

Double check your math and estimate on taxes to make sure you don’t have any surprises.

[Shinge1233]

Thanks for all response, helps , and advises.

Actually I am a state worker and have worked more than 25 years. Therefore I have 100% medical coverage when I retire. I may require to pay a premium if I want a better HMO or PPO coverage.

By the way, I am still planning to retire anytime but still not firm yet. I would like to get more examples and nice experiences here for reference. Hope to have a good life after retire.

[dak2018]

Sounds like you have adequate resources - especially if you have a $700K house that can be sold. You also indicated willingness to move to a potentially lower cost of living location, and that is a big deal. Flexibility can overcome lots of financial restrictions, but I don't see that you really have any restrictions to worry about!

My only comment would be to make a serious effort at reconstructing your spending for the last couple of years and to make an estimate of how things will look moving forward. The lumpy expenses ( cars, home repairs, etc.) will happen, and you want to be well positioned to take care of them without stress.

Go for it - the clock is ticking on us all!

[Montecfo]

Quote:

Originally Posted by ExFlyBoy5 Well, I am pretty confident that my mil pension will continue unless a) I murder someone or 2) the entire US Government goes bankrupt. But, not a bad question. I know a mess load of airline pilots who have had a rough go because of changes to their retirement plans and bankruptcy (and having 2+ ex-wives probably doesn't help, either).

You get to have 2 or more wives in America?

What a country!

Is that just limited to pilots?