Anyone Comfortably Retired With Retirement Savings Under the Million Mark?

[Tracer]

Got close to a million but not quite there. Bought a couple of SPIAs with some of it that gives me a monthly income for life. The annuity payments are mostly tax free because the SPIAs were purchased with after tax funds. For now, the annuity payments and SS cover my basic expenses. I just started pulling my RMDs also. My current income plus what's left in my IRAs and other investments will take me to age 100 if markets are "significantly below average" over that time according to Fidelity's retirement planner. If average or better, I'm sure I'll be doing more traveling. Having zero debt at retirement made all the difference.

[indiajust]

Pensions are just a promise, the IRA is a fact. All my corporate masters have gone bankrupt and disappeared. Fortunately I did rollovers and invested. I had just over 110k in my IRA when it seems 2008 retired me. I'm up to almost 500k now in the Roth with another 8-10 years to wait. I've been living on less than 25k a year since the GFC. At this point it is just habit. If you are frugal and exercise and read and cook, retirement is just another day.

[Alexi]

I retired early comfortably on a lot less. Fast forward to today, I am almost at that million mark. Single, no debt and original nest egg continues to grow.

[Dtail]

Quote:

Originally Posted by indiajust Pensions are just a promise, the IRA is a fact. All my corporate masters have gone bankrupt and disappeared. Fortunately I did rollovers and invested. I had just over 110k in my IRA when it seems 2008 retired me. I'm up to almost 500k now in the Roth with another 8-10 years to wait. I've been living on less than 25k a year since the GFC. At this point it is just habit. If you are frugal and exercise and read and cook, retirement is just another day.

Yep, that is why I will take my pension at 65 y.o. as a lump sum.
Since it is a smallish number, it will work out nice for that one year as a TIRA distribution substitute.

[RobLJ]

Neither I nor DW have pensions, so it's almost all in 401k/403b; a good pension can equate to a lot in a 401K (rule of thumb is to multiply the yearly pension by 20; perhaps 25 if it has COL increases.)


And to quote Micawber (in Dickens's David Copperfield):
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." (The great comic character Micawber was based on Dickens's father, John Dickens, who for a time was, like Micawber, imprisoned in the Fleet Street debtors prison along with the rest of the family, while Dickens at age 12 worked pasting labels on boot blacking jars in a factory. Dickens reworked this part of his past again, more darkly, in Little Dorritt, this time based on a young heroine who is born in a debtors prison. Lecture over!)

[LudditeAndroid]

I retired (sort of*) at age 39 with well under a million, but I also have very low expenses, of which healthcare is almost half because I have too *low* of income to get an ACA plan yet too many assets for Medicaid.


As other people have said, as long as your expenses are low enough, "one million dollars" isn't some sort of magic number you have to hang your hat on.


[* - I say "sort of" because I still choose to work for a family member on rare occasions.]

[Old Microbiologist]

As most have said it depends on lifestyle. Having no debts, living in a paid off house, where you live, all contribute to determining how you will live in retirement. We were like you and had several pensions and social security which we took early. We had roughly $500k in IRA's and brokerage accounts and like others that has grown since. The plan was to live on the pensions siphoning off what we need extra out of the cash and brokerage accounts. We spent about $400k to get moved to Europe (including shipping all household goods and a car) and purchase a house including major renovations. That money came out of the equity from the sale of our 4 houses we owned in Northern Virginia and North Carolina. Other than the major expenses at the outset we have lived 10 years now and haven't touched our savings at all. Because we live in a relatively low cost area (for Europe) our expenses are also relatively low. We do not have medical insurance at all and pay cash for all medical expenses which when you add it up is still less than the Part B costs for Medicare required by the military to continue military health care coverage. From what I read medical expenses in the US are now a major expense item where for us it is less than $200 a month (including several major medical emergencies). Our cash reserves are for if and when some medical catastrophe occurs. As we age we see these costs slowly rising but not enough to justify purchasing medical insurance or even paying the Part B premium so we could get the very bad Tricare Overseas plan (60% coverage with pre-payment and annual premiums). So, medical is a major expense which you can't predict and requires a buffer. We have not touched our reserves at all in the 10 years we have been retired. In fact because our living expenses are around $2000 a month we are building up a rather large cash account in our bank accounts. It is, in fact, a problem as I have my military pension coming to our bank here in Hungary but the US gets wonky if you have an overseas account that goes over $10k and triggers all kinds of reports and issues which are tar babies with the IRS and FBI which if you fail to file all required reports (under FATCA) gets you a stiff 50% of everything you own penalty. So, we are extremely careful to keep that account under $10k and cash it out when necessary which we keep in a safe and use for travel. We also use that account to pay off our credit card we use to make all payments here with (getting a minimum 1% cash back in the process). We can pay all utilities etc. here by credit card at the post office. So, for us, and probably all other Americans living outside the US balancing FATCA requirements is a major problem. Personally, I am pushing SWMBO to move the military pension back to our US account (Credit Union) and just transfer cash as necessary here using a REVULO account but she is happy with the status quo. She hates bank transfer fees. She also loves this kind of stuff and is the kind of person that enjoys doing taxes.

[Tyrone]

Yup. Pulled the plug for the most part (work less than 5 hours per week with summers off) this past summer at age 52. 700k in retirement accounts with 250k of that available due that amount in a 457b plan. That, plus wife's pension of 48k/year (COLA with health care for both of us for life) made this a possibility. House not paid off, but have about 125k in equity. Without pension, this would not be a possibility.

[SonofCohoes]

Quote:

Originally Posted by rathgar When reading these boards, so many people have retirement savings in the millions. We have less than 500K - we will have a pension, social security, dividends and some withdrawal from IRA - but not what I read on here. Have any of you been able to make it without loads of savings?

Yes, pension, rental income, ss and minimal withdrawals from ira keeps us in the 12% bracket. We’re not world travelers so we’re just fine.

I suppose if you count the equity in the rentals we’re darn close but not over.

[Red Badger]

Quote:

Originally Posted by dirtbiker The 25x equates to a 4% WR (can also look at it as dividing your retirement savings by 25 to determine the 4% WR), which is widely regarded as a safe long term strategy. And the 80-100% is used as a long term estimate of the percent of your working income you'll need in retirement. Obviously it varies from person to person, but I'd say it's far from horse sh*t. Why the hardline negative stance on this?

You answered your own question.

There are exhaustive posts on this forum calling out the fact that its all about the spending. Income has zip to do with retirement success. A retiree can be gold by these two benchmarks, but if the spending exceeds the income stream, what the hell good are these rules?

Also, there are no shortage of folks in the money management (FA's) arena that espouse these "rules of dung." Part of the reason is that these FA's are rewarded handsomely in an AUM structure if they encourage customers to amass a portfolio that may be significantly larger than required.

So, some may find this sort of counsel as helpful. I just consider it shortsighted at best, and quite dangerous at worst. Had I followed either premise, I'd still be w*rking, but I retired a couple years ago without coming anywhere near these "common sense" rules.

About the hard line stance; when it come to really, really important stuff (like retirement success), I serve it up straight, no chaser.

[ckelly78z]

My parents are living the dream at 78 years old. He retired at 60 with a nice 41 year pension, but only about $100K in a 401K. They still have about the same amount due to a bull market. They do live frugally, and have no debt, but still travel extensively.

[Gumby]

As others have noted, it's all about how much you personally want to spend in retirement.

My one "iron rule" of retirement planning was that I did not want to reduce our standard of living after retirement and I did not want to excessively constrain our standard of living before retirement just to get there. Accordingly, while living a fine life, we worked until: 1) pensions and social security can easily cover our spending; 3) in the event something happens to those sources of money, a 4% withdrawal from our portfolio can easily cover our spending. We actually live better now than we did before, because we carry on exactly as before on a day to day basis, plus we have almost unlimited time and money for additional travel.

Yes, we could have retired sooner with less money, but we didn't want to make the lifestyle compromises necessary to do that. Nor did we want to ever have to concern ourselves with money again. We'll probably leave a lot on the table, but I have no need to spend my last dollar.

[Fermion]

You can make plans and run scenarios, what-ifs, and work until you are 100% sure you have every aspect covered...then life can "kick you in the teeth" from another direction.

Plan, but don't wait too long to act.

[SpinDoctorTX]

I was able to retire with just over 500k in my 401k, 150k liquid, and my small pension (900/mo) & no debt at all. I have to pay 50/50 of my old megacorp insurance which is for me alone almost 700/mo now. I have 6 more years until medicare so that kinda stinks, but we have actually increased our net worth while spending what we wanted when we wanted. We do live a pretty simple life, with mostly hiking trips and the like, so not a lot of fancy travel- just fun & beautiful. I missed out on maybe 400k in income/ savings over the last 3 years (since I retired) but I have no regrets at all.

[SpinDoctorTX]

Quote:

Originally Posted by Fermion You can make plans and run scenarios, what-ifs, and work until you are 100% sure you have every aspect covered...then life can "kick you in the teeth" from another direction. Plan, but don't wait too long to act.

Exactly. My Dad worked even after he retired- as a chem eng consultant. He liked doing it, but he was only 3 yrs into retirement (where I am right now) when he got St4 glioblastoma & rich or not, passed about 18 mos later. (& no, we didn't get an inheritance- his 2nd wife/ fam did). That was 2009. We really buckled down on our "get outta dodge" action plan after that- & DH was to retire the next year at 62.

To me, time is worth much more than money. I know a lot of folks feel differently, though.

[Teacher Terry]

My dad retired at 54 due to severe COPD from his job. Time is more important to me.

[JJpop]

Quote:

Originally Posted by rathgar When reading these boards, so many people have retirement savings in the millions. We have less than 500K - we will have a pension, social security, dividends and some withdrawal from IRA - but not what I read on here. Have any of you been able to make it without loads of savings?

I find this almost amusing and I am not trying to be rude.

You have a pension as well as SS.

What other people have is completely irrelevant for you.People with much less than you are living very nice lives.

[nancyfrank232]

Quote:

Originally Posted by Fermion You can make plans and run scenarios, what-ifs, and work until you are 100% sure you have every aspect covered...then life can "kick you in the teeth" from another direction. Plan, but don't wait too long to act.

+1

Excellent advice!

[Offgrid Organic Farmer]

I was forced onto pension when I was 42.

I have investments, but nowhere near $1M.

I am still not old enough for SS.

[Teacher Terry]

Farmer, you were in the military so could have gotten a civilian job after retiring.