How much money to retire ???

[Kevin]

I've asked before about home much money is enough. But I'm also curious how much do you need to retire?

Well, that, and my wife is going through a pretty substantial job change. I'm a stay at home dad because sweetie travels for her job and if I worked we would have to have a part time nanny. What's the point in that?

Question: But I'm mostly curious how much you need to retire? I know everyone is in a different situation, but for those of you who are retired, Do you have a pension? Do o you rely on your 401k? Do o you just have social security? I'm not even asking about dollar amounts; but is it paycheck to paycheck or do you dip into savings for extra-ordinary expenses, like a new revolver? Do you have money set aside you don't touch ever?

But If we start talking dollars and cents someone will say it's more than enough and someone else will say it isn't close to being enough.

My parents who are still kicking it, (dad=92 mom=86) have a pension (state teachers) and some savings. Not a lot though. And I know they pay a lot for medical insurance.

I've thought about this post for a long while now, and I don't want to say too much about my wife's job. Just to say we did manage to save a year or so worth of expenses. We are both in our 50's.

 

[GypsmJim]

When you are ready to retire, don't look at your bank accounts. That won't make you comfortable.

Your financial advisors will tell you a lot of crap, and that's simply what it is. Delete their ideas as well. Their only goal is to make a commission off you.

Make a budget. Figure your monthly expenses. That includes food, car insurance, house taxes, etc, etc.

Then, calculate your monthly income, including SS, pensions, annuities or whatever.

If your income exceeds your expenses by at least 10%, then and only then are you ready to retire.

It's all about CASH FLOW. If you have to take money out of the bank to meet your expenses you will not have a trouble-free retirement.

There will always be unexpected car expenses, the furnace needs to be replaced, unexpected medical expenses, you need to buy a new car, etc., etc. THAT is what your savings are for.

If you have a surplus every month, then you can save that money and take vacations or treat yourself to some nice dinners each month.

Retirement is all about cash flow.

 

[XUSNORDIE]

I'm coming up on retirement. My 401K was on track to be enough to pay off the rest of my mortgage when I turned 60...which will be in NOV....there would have been enough to pay other debts off. At 60, you can also keep your unvested stock options.....which If I retire at 62, they would keep vesting in retirement until the last shares vest. Wife is 10 years younger than me....and will remain working. At 62 I would only draw the minimum Social Security but the way we had it calculated we were good. The stock options are up and down with the market but will help. We will see what the market values are as it goes along until they fully vest.

BUT.....the last 3 years decimated my 401K.....BIG chunks lost on each quarterly statement. For 11 years that 401K was killing it...making great gains even during the covid farce....but the last 3 years there were chunks of $12K...$24K....$26L....lost over $300K so far and looks like I will have about 45% of what it should have been if I'm lucky.

I've had some health issues and several major surgeries last few years....looking at another major spine surgery....I'm afraid I won't make it to 62 retirement....not to spin this political but the VA is a real PITA to deal with and Trump did say if Biden/Harris got in they would steal our retirement funds.....boy oh boy was he ever speaking the truth!

 

[Kevin]

Thanks, and I'm sorry about your stocks. We have a college account for my daughter, since 2020 COVID, it's up at least 50%. Mostly Apple and Microsoft.

But good luck with the back surgery and your future retirement! That's exciting!

 

[GunnyGene]

What's more important is not having any debt before you retire. No mortgage, no car payment, etc. Only normal living expenses from that day forward.

When you are ready to retire, don't look at your bank accounts. That won't make you comfortable.

Your financial advisors will tell you a lot of crap, and that's simply what it is. Delete their ideas as well. Their only goal is to make a commission off you.

Make a budget. Figure your monthly expenses. That includes food, car insurance, house taxes, etc, etc.

Then, calculate your monthly income, including SS, pensions, annuities or whatever.

If your income exceeds your expenses by at least 10%, then and only then are you ready to retire.

It's all about CASH FLOW. If you have to take money out of the bank to meet your expenses you will not have a trouble-free retirement.

There will always be unexpected car expenses, the furnace needs to be replaced, unexpected medical expenses, you need to buy a new car, etc., etc. THAT is what your savings are for.

If you have a surplus every month, then you can save that money and take vacations or treat yourself to some nice dinners each month.

Retirement is all about cash flow.

Absolutely spot on. I've been retired for 25yrs, and I'll vouch for every word you just said.

Those Benjamins don't buy nearly as much as they did 25 years ago, and credit card interest will eat your lunch.

 

[Danjet500]

My wife and I both retired 5 years ago, she was 60 and I was 65. I get a small pension and we both draw our SS benefits. From all of that we gross about $65000/year. The key as Gunny said is to have no debt. My wife and I made a point of this before either of us retired. We own our home and vehicles and she makes sure we carry no credit card debt. We moved our 401k balances over to an IRA when we retired and have done fairly well since then. One is not required to make withdrawals from your tax deferred IRA until age 73. My advisor says the recommended percentage of withdrawal is 4.5-5%. I won't have to start withdrawals for about another 2.5 years.

 

[Kevin]

What's more important is not having any debt before you retire. No mortgage, no car payment, etc. Only normal living expenses from that day forward.


Absolutely spot on. I've been retired for 25yrs, and I'll vouch for every word you just said.

Those Benjamins don't buy nearly as much as they did 25 years ago, and credit card interest will eat your lunch.

You've been retired 25 years? Surely you've had a car payment in that time?

I guess my dad's been retired since 1994. He retired a year before my mom, maybe two years, I don't remember.

But how do you handle the added expenses of say a new air conditioner? Or new hot water heater?

And thank you everyone for the comments. I am very interested in this topic. And I hope it will help out others too.

 

[jimbo1096]

Whatever you think is good enough it's probably not. Retire with no debt, work as long as you comfortably can. Put your money somewhere safe. Mine is in three different types of investment.
GypsmJim is pretty much right on.

 

[txramfan]

I turn 67 this year, wife did a couple months ago. I'm fortunate that my wife didn't complain about my frugal ways since we married back in 76. I dont have any special ideas. We paid the house off early after moving to Plano for the school system 40 years ago. I never wanted a second house or raw land ( taxes n insurance for ever on non producing assets bug me) I've changed my spending habits in the past few years, but still avoid buying items unless necessary.
We are thinking about buying a place in AZ , so as I age I am trying to change my viewpoint on somethings.

I guess what I'm saying is figure out what you and your better half want to do. Then do some math.

There are a bunch of national parks we plan on seeing when life lets us.

 

[Mobuck]

If you have to ask, you don't have enough.

 

[Kevin]

This is all really great stuff.

A few years ago my wife had a boss who really made some great impressions on her. Like being debt free by 50 years old etc. And that's been our plan for a while.

I am happy to say we should be debt free by next Fall.

 

[GunnyGene]

You've been retired 25 years? Surely you've had a car payment in that time?

I guess my dad's been retired since 1994. He retired a year before my mom, maybe two years, I don't remember.

But how do you handle the added expenses of say a new air conditioner? Or new hot water heater?

And thank you everyone for the comments. I am very interested in this topic. And I hope it will help out others too.

Haven't had a car payment in about 5 years. I retired at 55 with reasonably good lifetime income from 4 sources and about 300k in cash. Spent about 1/2 that on building our house on 20 acres in MS. Living rent free now, with a good cushion that is growing. I can afford to pay cash, and have for the 2 items you mentioned, although I do have plastic that I'll use for small stuff occasionally just to keep it active, and I pay it off prior to it costing me interest. Medical - Medicare and Tricare(miitary). Premium comes out of my SS. Cost of living in rural MS is about 1/2 of what it is in any metro area in any part of the country you care to name. You just have to put up with the occasional tornado - or hurricane on the coast. But if you live here you prepare accordingly.

 

[Kevin]

Haven't had a car payment in about 5 years. I retired at 55 with reasonably good lifetime income from 4 sources and about 300k in cash. Spent about 1/2 that on building our house on 20 acres in MS. Living rent free now, with a good cushion that is growing. I can afford to pay cash, and have for the 2 items you mentioned, although I do have plastic that I'll use for small stuff occasionally just to keep it active, and I pay it off prior to it costing me interest. Medical - Medicare and Tricare(miitary). Premium comes out of my SS. Cost of living in rural MS is about 1/2 of what it is in any metro area in any part of the country you care to name. You just have to put up with the occasional tornado - or hurricane on the coast. But if you live here you prepare accordingly.

Thank you so much. This is the information I was looking for.

And yes, I'm still curious how others have done it too.

 

[warren5421]

I am 79 and my wife is 78, she worked till 72, I retired on a 100% disability at 56. House was bought in 1882 on a 15 year mortgage. putting the money after in stocks. We both used the company matching funds on the 401k, it was free money you would not get as awages. We drove used cars not new ones putting extra money in bank for the next car. You pay off card debt every month, if you can't don't buy. Learn to do small jobs around the house, don't pay someone to do them. Budget what is needed to live, housing, utilities, and food anything left over is save if not spent on nice to have. We traveled but saved money to do it. Today if we wanted to we could travel first class but that may use the money we have at end of life. We both have family that lived to 100. We have investments, wife has a pension from Alcoa buying the company and running it for 30 years, I have a very small pension from before I was disabled and a VA 100% pension. Borth 401"s were converted as so as was possible.

You need to be out of debt before retirement!!!!!! Run a true debt/budget before you pull the plug and retire!!! I know several people that took a Walmart job as they came up short to keep housing, utilities, and food paid per month. If you have not paid into SS enough to get a small pension find a job that pays into SS. My wife keep working after her retirement age which doubled what she should have received. If you can, move to a lower cost state.

 

[Heliman]

My wife and I retired 10 years ago. I was 64 and my wife 62. We owned our home free and clear. No credit card debt.
We have 5 retirement income sources including my VA disability compensation.
We have a car and RV monthly payments along with utilities, etc.
We will be fine going forward.
Planning is the key. I started getting serious about retirement at about 39. Just turned 75.
We are doing fine.

 

[jack black]

When you are ready to retire, don't look at your bank accounts. That won't make you comfortable.

Your financial advisors will tell you a lot of crap, and that's simply what it is. Delete their ideas as well. Their only goal is to make a commission off you.

Make a budget. Figure your monthly expenses. That includes food, car insurance, house taxes, etc, etc.

Then, calculate your monthly income, including SS, pensions, annuities or whatever.

If your income exceeds your expenses by at least 10%, then and only then are you ready to retire.

It's all about CASH FLOW. If you have to take money out of the bank to meet your expenses you will not have a trouble-free retirement.

There will always be unexpected car expenses, the furnace needs to be replaced, unexpected medical expenses, you need to buy a new car, etc., etc. THAT is what your savings are for.

If you have a surplus every month, then you can save that money and take vacations or treat yourself to some nice dinners each month.

Retirement is all about cash flow.

Remember INFLATION and insurance and property taxes also unexpected medical bills. No such thing as being debt free until you are dead.

 

[jack black]

This is all really great stuff.

A few years ago my wife had a boss who really made some great impressions on her. Like being debt free by 50 years old etc. And that's been our plan for a while.

I am happy to say we should be debt free by next Fall.

You are never debt free

 

[Goldstar225]

My wife and I are both retired. Five income streams. I have two pensions and SS, my wife has one pension and SS. Home is paid for and no car payment. This enables us to put about 1K a month into savings while living comfortably but certainly not extravagantly. We meet all of our needs and some of our wants. One huge benefit is medicare + tricare for life. If not for that we would probably have been bankrupt because my wife has significant medical issues.

 

[krw]

All you can come up with! Getting there really quik myself. We are self employed. Health insurance is by and far our biggest expense. Obamacare is a JOKE. We are still grandfathered in on our old BCBS plan. But They stick it to you every month!! When Obamacare was mandate in, everybody and I mean everybody should have been mandated to enroll and have it as health insurance

Another bill we have that increases yearly is our homeowners insurance. Built my house in '89, and have never had a claim but premium goes up ea year

As you can figger, insurance premiums are a pain in my ass(pocketbook). When I still had my poultry operation, Live production mgr stopped by one day. He asked what my biggest expense was. He expected Propane or Electricity. When I told Him insurance's it took him by suprise

 

[Mobuck]

Maybe I was a bitty snippy with my previous post so here's another go: I retired at 56 with an assured Civil Service annuity of 65% of final pay level. Early retirement incentives, the need to help blind Son finish college, and a hostile work environment made it look pretty good. A second career(?) with a different Federal agency came along a couple years later that made retirement look nice but stress took that away last year. Meeting farm expenses isn't nearly as easy w/o that income. There's some money stashed here and there but $100K in cash is nice to have but once it's gone IT'S GONE w/o any chance of replacement.