Am I Saving Too Much??

[cyber888]

You're fine. YOU can buy a Lambo !

 

[Koolau]

Just my opinion: At 41, it's much more difficult to decide whether you are saving "too much." It will become clearer as you get closer to your proposed retirement date. Additionally, the farther out from SS and especially Medicare, the more difficult to decide how much you need to save. Filling in for health care between 55 and MC on your own is often a huge challenge. MUCH better to over prepare for THIS particular issue. With a little luck, you'll live long enough to spend any "excess" you may have saved. If all else fails, there are folks here who would gladly help you spend your excess. But don't forget, YMMV.

 

[DrRoy]

You are doing great. If you are enjoying your life and having some fun along the way then hang in there. You will be able to spend more in retirement than you are doing now, which I find is very enjoyable too.

 

[athena53]

Are you in the military? Otherwise your pension and HC benefits are pretty much a WAG...

I was going to say that about healthcare benefits in particular. My brother retired with a good pension and retiree health insurance at age 60. Two years later he and DSIL got a letter saying that retiree health insurance was being terminated. They're paying $22K/year for ACA coverage. There was no union contract involved s it's perfectly legal.

Sounds like you live a pretty good lifestyle and are happy with it- DH and I also saved a lot but had some wonderful travel thanks to diligent use of loyalty programs and all of my business travel. I agree with those who say that over-saving is a lot better than not having enough. No reason to 'blow that dough" on things that don't add to your quality of life, especially this early in the game.

 

[Freedom56]

Hi! The goal is to retire at 55.

DW and I are 41 years old with 2 grade schoolers.

$200k - Approx Annual income
$50k - Positive cash flow annually from Rentals

Pension at retirement for us will be approx 120K annually. Health Insurance will be covered 100% when I retire.

We are currently maxing out all retirement accounts and plan on doing so for the foreseeable future.

$74k - (2 - 457s, roth 401k, & roth 403b)
$11k - ROTH IRAs

Annual expenses approx $50-60K. No Debt aside from home mortgage and rental properties.

Net worth is approx $2.5mil

$710k - Roth Accounts
$370k - 457
$190K - Pension Cash value
$90K - Stocks
$110k - Cash Accounts
$30k - 529 college savings
$735K - equity of 3 rental properties (value $1mil)
$315K - home equity (value 625k)

Are we saving too much? We are not big spenders and our pension at retirement (if all goes well) will more than cover our annual expenses. Any advice or comments will be appreciated.

We also have a pension that pays us $9341 per month after deductions and entered retirement 100% debt free. We have another pension kicking in when I turn 62 and then there is Social Security. Our pension covers all our expenses except income tax on our taxable investments. If I were you, I would pay off the mortgage on your home. We are into our sixth year of retirement, and have not touched our investment accounts and savings other than to pay any income taxes due.

So the short and obvious answer to your question is that with a pension, you won't need the same level of cash flow from investments as someone without one. It doesn't hurt to build up an apocalypse proof level of savings when entering retirement but you should also have a plan to spend all that excess savings during your early retirement years. You should set up trust funds for your kids (but don't tell them about it). Plan to live it up during retirement. Fly first class/business class and visit nice places. Stay at nice hotels and dine at nice restaurants.