Who needs a million $ cash to retire

[daylatedollarshort]

I have a brother-in-law who just moved from the Phoenix area to San Diego after he finally retired at the age of 70.

He said when he told a new neighbor where he came from, the neighbor said "You are moving in the wrong direction. Most retirees move out of CA.".

It is mostly income and education based on who is moving in and who is moving out -
https://www.latimes.com/business/la-fi-california-census-migration-20181221-story.html

"The U.S. Census Bureau, in its newly released surveys for 2017, shows that California’s net migration remained fairly stable. Since 2010, as the economic recovery took hold and housing prices skyrocketed, departures accelerated — but the number of newcomers rose steadily as well.

The state attracts a steady stream of college graduates, especially from the East Coast, even as many less-educated residents moveto neighboring states — and to Texas — in search of a lower cost of living."

 

[Spanky]

I have a brother-in-law who just moved from the Phoenix area to San Diego after he finally retired at the age of 70.

He said when he told a new neighbor where he came from, the neighbor said "You are moving in the wrong direction. Most retirees move out of CA.".

Phoenix is a nice retirement place -- to play golf, to play pickleball, to lie by the pool, and to sit around the fire pit at night. It might be too hot and dry for some people. DW, for example, does not like the climate because of the heat (in the summer) and the dryness. She prefers the weather in Carlsbad, about 20 miles north of San Diego.

 

[Twistnshout]

my mom retired in 96 at 59 with 100k small SS and small pension. They live in a modest house in a not all that great or all that bad of an area. It was cheap so they lived cheaply.


She has invested, and did a pretty good job of it. She is in 7 figures plus whatever my step dad has.


She never worked once she retire so it can be done provided you retire smartly.


I'm 61 with a nice pile of cash, pension, SS. I will live quite well compared to her but I will be spending a LOT more then her. I'm thinking it's all relative. Just be smart and realistic about the money you do have.


Also remember you get the most out of retirement in your 60's given statistically you will be healthier and can do quite a bit. Don't wait for your pile to be HUGE only to find yourself ill and not able to do the things you want to do.


If you don't have the pile you'd like to have supplementing it with a part time job is pretty smart too provided you don't hate doing it.


I haven't retired yet, fortunately I don't hate my job and get lots of vacation but it's never enough and as I get close I find little things about my job to be annoying. It's how I know I'm getting close to ditching the place. lol


Do lots of retirement calculators and be HONEST about what you spend. Typically you spend less in retirement but my advise is to calculate using what you spend now.

 

[Spanky]

Most of the people we know who moved here in retirement are either very rich, they bought small condos, or both. The small condo people seem to spend much of their time in club activities, travel or local sight seeing, so they aren't home that much anyway.

In other words, you have to wealthy to retire in the Bay Area unless you already own a house purchased long ago, have earned a high salary from the tech firms, and have saved a "good" portion of your income. Despite the high cost of living in the Bay Area, the influx of tech workers continue to rise because of the extremely generous compensation. A software engineer with less than 5-years of experience could earn up to $250K a year. DD and her husband, both senior software engineers working for the largest technology employers in Silicon Valley, are collecting high pay checks while paying only a small mortgage payment for a $200K loan for the house which is now valued more than $1M.

 

[Spanky]

Also remember you get the most out of retirement in your 60's given statistically you will be healthier and can do quite a bit. Don't wait for your pile to be HUGE only to find yourself ill and not able to do the things you want to do.

If you don't have the pile you'd like to have supplementing it with a part time job is pretty smart too provided you don't hate doing it.

I haven't retired yet, fortunately I don't hate my job and get lots of vacation but it's never enough and as I get close I find little things about my job to be annoying. It's how I know I'm getting close to ditching the place. lol

As you said, "you get the most out of retirement in your 60's", what will be it take for you to retire?

 

[daylatedollarshort]

In other words, you have to wealthy to retire in the Bay Area unless you already own a house purchased long ago, have earned a high salary from the tech firms, and have saved a "good" portion of your income. Despite the high cost of living in the Bay Area, the influx of tech workers continue to rise because of the extremely generous compensation. A software engineer with less than 5-years of experience could earn up to $250K a year. DD and her husband, both senior software engineers working for the largest technology employers in Silicon Valley, are collecting high pay checks while paying only a small mortgage payment for a $200K loan for the house which is now valued more than $1M.

The small condo retirees we know bought in the suburbs for probably around $300K - $400K. But that would be for around 1,000 sq feet or less, around an hour commute into the city and not in the South Bay, which is pricier. For two of the couples, their condos here are their second homes.

But utilities on their condos aren't much, they are on Medicare, seniors get a big discount on BART, and they all just have one car (or one car at this home) so if their condos are paid for their other fixed expenses probably aren't too high.

 

[DireWolf]

If we are talking about the success rate as computed by FIRECalc and similar retirement calculators, let's not forget the rate is typically computed over a 30-year retirement period.

Not exactly. FIRECalc is a FIRE Calculator. It is right there in the name, even. You enter the horizon right in the first tab. Same with (lol, i guess you can't mention some of the others here). They look at actual X length periods in their history. I think you are confusing with things like the Trinity Study, that looked at the traditional 30 year horizon.

Yet, hard statistics show that only 46% of the 55-year-olds make it to 85. The less lucky 54% don't live long enough to have to worry about being broke at the end of the 30-year period. We will not hear them complain about lack of money.

I often see people pointing out "but you could die!" and other things. Does that affect your retirement planning in any way? You still have to plan to living to the other side of the bell curve.

 

[NW-Bound]

Nope. FIRECalc is a FIRE Calculator. It is right there in the name, even. You enter the horizon right in the first tab. Same with ********. The look at actual X length periods in their history. I think you are confusing with things like the Trinity Study, that looked at the traditional 30 year horizon.

I knew how FIRECalc uses the historical data.

And most people use the default 30-year horizon, unless they retire very young.

I often see people pointing out "but you could die!" and other things. Does that affect your retirement planning in any way? You still have to plan to living to the other side of the bell curve.

Sure. That's why my WR is 2.7%, and that is with no SS yet.

My post was in response to earlier posters who said 50% financial success rate meant 1/2 did not fail. I said that the "success rate" was even higher if we considered people who never made it to the 30-year mark, or whatever more optimistic period that they used in their plan.

So, when a calculator shows a 60-year old has a 50% risk of dying broke in 30 years, his real risk is actually lower than 50% when he adds in the chance of him croaking within that 30-year period, which is fairly high.

If you retire at 60 and die at 65, congratulation on a "successful retirement", financially speaking that is.

 

[Andre1969]

I knew how FIRECalc uses the historical data.
And most people use the default 30-year horizon, unless they retire very young.

I run my numbers out to the age of 100 with FireCalc. However, since I'm only 49, that's only taking historical 51 year timespans into account. So, just to be safe, I also run a few scenarios such as 30 years, 35, 40, in case there are some historical shorter periods that would have failed, and therefore, never made it to 51 years.

 

[NW-Bound]

But then, as Bernstein pointed out in his "Retirement Calculator from Hell", we have no guarantee that the next 50 years will bear any resemblance to the last 50 years.

Why do I like to have a low WR? It's so that I would do better than my cohorts, whatever SHTF.

As Bernstein pointed out,

If you want to retire early, what matters is not how much you save, but how much more than everyone else you save. In a world where everyone saves as if they’re going to retire at fifty-five, or even at sixty-five, none can.

 

[Gumby]

Fortunately for us, most don't.

 

[NW-Bound]

Yes.

And we should stop belittling spendthrifts who do not save.

We need them more than they need us, I think.

 

[HI Bill]

...we should stop belittling spendthrifts who do not save. We need them more than they need us, I think.

Before I was married, one of my major concern about ER was whether there would be enough workers to staff Taco Bell restaurants. I kid you not. Yes, we need workers to keep paying into SS, paying taxes, and keeping the ship running 'smoothly' or 'status quo', at least, that's what Washington wants!

 

[Rianne]

Before I was married, one of my major concern about ER was whether there would be enough workers to staff Taco Bell restaurants. I kid you not. Yes, we need workers to keep paying into SS, paying taxes, and keeping the ship running 'smoothly' or 'status quo', at least, that's what Washington wants!

Worker's and the spendthrifts who keep the economy running smoothly. I think furniture warehouse would go out of business without my SIL.

 

[NW-Bound]

I have been worrying about not having enough workers to change diapers of nursing home patients.

Recently, I pointed out that among my children and their cousins of child bearing age and also their spouses, they have 1 kid among 21 of them. Yes, 21 down to 1.

The eldest of the above cohort is 50, and the youngest is 30 because I only count those older than 25 to be of marrying age. In a few years, a few more will be added to that count of 21.

It appears my sweet grandniece will stay very lonely.

 

[Teacher Terry]

My husband and I have 5 kids between us and no grandchildren. Things are changing.

 

[Twistnshout]

As you said, "you get the most out of retirement in your 60's", what will be it take for you to retire?

I have been waiting for a severance package since 2015. It never happened so here I am still hoping. It's pretty lucrative so I hate to miss it but if it doesn't happen by this coming spring I might just go anyway.

Right now I'm setting up my new jeep with do-dads and building an off road trailer and using income rather then savings income.

 

[Paulz]

It appears my sweet grandniece will stay very lonely.

Some of the loneliest people I know have been married. Never equate married with happy or single with lonely!

 

[NW-Bound]

Some of the loneliest people I know have been married. Never equate married with happy or single with lonely!

I meant my 2-year-old grandniece will not have a cousin to play with, being the only child of her generation.

 

[Spanky]

I have been waiting for a severance package since 2015. It never happened so here I am still hoping. It's pretty lucrative so I hate to miss it but if it doesn't happen by this coming spring I might just go anyway.

Right now I'm setting up my new jeep with do-dads and building an off road trailer and using income rather then savings income.

Good luck on the package, which could happen.

 

[Twistnshout]

My husband and I have 5 kids between us and no grandchildren. Things are changing.

I didn't have my son until I was 40. I never wanted kids either.

I think part of that was my parents going thru a messy divorce. Why in the world would I want to put myself and children thru THAT.

The wife was persistent and we have a great son to show for it. I now think children round you out as a person. Done right you get as much from them as they do from you.

Still in todays world boys/men don't see a lot of upside to marriage and a lot of down side.

Girls/women don't need men for money. they either make good money or they have the government giving them handouts.

My son is still in college has a girlfriend and wants to get married ASAP and have kids ASAP...where did that come from lol

 

[Doc0]

Read an article that said the median brokerage account at one of the major brokers was 500K. 500K RMD's 18K first year rising to 31K in the 10th year. SS is inflation adjusted so if you have like 25K SS you start @ 43K and rise to 61K in 10 years if you inflation adjust SS @ 2%. Still in the 12% bracket if MFJ. Not going to buy an island but you can live OK on 50K/yr

 

[JJpop]

Ya ya ya

This topic is always covered and it always comes down to the individual circumstances.There is no magic formula and everyone is different so the numbers are meaningless unless they are very similar to yours.

 

[SoReadyToRetire]

.There is no magic formula and everyone is different so the numbers are meaningless unless they are very similar to yours.

But that's part of the fun/interest of threads like these ... you read through, looking for others in similar circumstances, and learn from their experiences.

I say keep these "useless" threads coming!

(I'd also be interested in the "what are your expenses" one someone above mentioned. Saw that someone pays $13K in property taxes and nearly fell off my chair--I couldn't do that. The $4600 we pay for our little ranch in VT is bad enough--esp if you have no kids and still have to support the schools.)

 

[FIREchief]

This topic is always covered and it always comes down to the individual circumstances.There is no magic formula and everyone is different so the numbers are meaningless unless they are very similar to yours.

All true, but I find it interesting that a number of posters in this thread, from different situations, have somehow arrived at a number in the neighborhood of $60K per year (SS + pension + investments) as a "reasonable" number to maintain a comfortable lifestyle into retirement. That obviously excludes LTC and assumes that most/all healthcare costs are covered under Medicare or perhaps ACA for those approaching 65.

If we adopt that as a premise, then the OP's question about need may come down to:

Need = (60,000 - SS - pension)/.04

So $25K SS and $20K pension suggests a necessary nest egg in the neighborhood of $375K. A non-COLA'd pension would complicate things.