retirement

danielgage

retirees or those in the know:

not trying to be nosy but what % of money does a person need in retirement to sustain the same lifestyle as when working in your experience, advice or expertise?

for example if a couple is grossing $100,000 a year and their retirement pension and social security gross adds up to $5000 a month will that be enough to pay health benefits and sustain same lifestyle as when working?

Rocky Raab

If they go on Medicare, probably. If they retire early and have to buy commercial health insurance, probably not.

danielgage

paying around $1400.00 a month for Family plan now while working

BobJudy

That is a hard call without more details, which are none of my business. As Rocky said health insurance is a big consideration. Also debt like mortgages and car payments. What was your lifestyle before retirement. Were you saving 10 - 20 grand a year of that $100,000 or living paycheck to paycheck. Do you have a nest egg set aside for emergencies? There are a couple of websites if you do a google search that help calculate what you will need. Judy and I receive somewhere around your 5 grand a month and have no problems but everyone is different in what they have in assets and the lifestyle they lead. Good luck and when it is time enjoy your retirement. Bob

nmyers

I've been retired for 19 years.  Before I retired, I calculated that I needed as much income in retirement as I had when I was working.  And, that eventually proved to be accurate.

I live in the suburban DC area, & the cost of living here is pretty high.  But, I could never afford to live in San Francisco or NYC, & I don't want to move to FL, GA, SC, where I could live on a lot less.

The cost of health care for retirees will get even more expensive, unless you are lucky enough to have a "Cadillac" health plan from your employment.

My recommendation is that you find a local Certified Financial Planner, & let him prepare a plan that will work for you.  It will cost you a few hundred $, but it's worth the investment.

Neal

mac10

learn to live with out

danielgage

thanks everyone

Bubba Jr.

My wife retired from Social Security and has an excellent government pension plus health insurance. With all our health issues we hardly ever have to pay anything after Medicare kicks in. All our debts have been paid off years ago, our financial advisor does a great job of alerting me to smart purchases, and we don't spend much on stuff, just the essentials.

My point is that everyone's situation is different, and there is no "one size fits all" answer to your question. If you haven't linked up with a financial advisor by now, you are behind the curve, if you have an advisor, consult them and follow their advice, that's their specialty.

Good Luck

scooterdriver

Replies are perfect...everyone's situation is different. The only way to know is to put it all on paper...often with the assistance of a financial advisor.

Personally, I’m spending about 100% of pre-retirement income (and not contributing as much to retirement accounts) = more “spending” in retirement. No surprise...it’s what I calculated then saved, invested, and budgeted for.

Good luck...I’ve found voluntary retirement to be the cat’s meow.

danielgage

retirement calculators I have found on-line says 70-80% to maintain lifestyle after retiring 

Smitty500mag

Retirement is sorta like having a baby. If you save up until you can afford one it'll never happen. 

scooterdriver

The range of previous replies should make one thing obvious...it’s not one-size-fits-all.

If I’d followed the online calculators I’d be blowing through my net worth and on my way to poverty in (assuming I/spouse live awhile) old age. I didn’t...and I’m not.

You really want to get this right - It’s more difficult to jump start an income stream once you retire. Proper planning requires an educated analysis of income streams and likely needs. A FA can help do this for a modest fee (<$1k); no need to buy a bunch of product from him/her.

JimmyJack

After being retired, for 20 years,  Ive found it doesnt take nearly as much as I thought it would.  But each case is different, as Bobjudy said.  My expenses have decreased as I got older.  Now I cant spend my Social Security. But I also got a pension and 401K.

truthful

Lots of things to consider. For example, of your current $100,000/yr, how much is actually spendable after taxes, etc.? The $5,000/month in retirement is only $60,000/yr and chances are some of that is going to have to go to taxes. It would be great if most of that $60K is coming from tax-free accounts, such as a Roth IRA. A lot of people forget that for many people part of their Social Security benefit is taxable. 

Another big consideration is your lifestyle. You want to maintain your current lifestyle, but have you considered what you will be doing with all your extra time in retirement? Do you want to travel, indulge in hobbies, or other cash absorbing activities? Lots of people discover that it is more expensive to live in retirement than they had figured.

kimi

I think you're going to be pretty close to maintaining the same lifestyle, especially if you go on Medicare like Rocky mentioned.

I was burned out at 57...tired.  Had no more to give, but definitely needed a good break.  Was looking at about 50% gross until the wife went on SS three years later at 62.  Had some money saved and made it there with no sweat.  We were fortunate to have good medical benefits.  Bought a used motor coach and traveled until my SS started about two years later.

Good luck to you and your wife, Daniel.

jthoresen

80% has been the rule I've known. However, here in Texas the property taxes are very high. My father (age 74) is still working just to pay property taxes.

bpost

I am going to go part time plus keep my health insurance next year in March.  That income will be very close to what I will get from Social insecurity.  My goal is to see if I can make it on that amount.  I like working and am buying all the BIG ticket toys I want now paying cash for them.  I can see busted pipes, roof leaks and the like coming up but my meager cash reserves should handle them.  If not, I will go back to work!

select-fire

Funny SC allows for cheaper property tax when you get older. Free Hunting and Fishing. Figure the expenses up and what assets you have regardless cash or property. Quit worrying .

gruntled2

What sucks now is that nobody wants our money. You have to try hard to get a lousy 1%. In spite of that we spend a lot less than we get. It helps that our health care cost is low & we haven't had a mortgage since the late 80s. My car is five years old & I can't get my wife to replace her seventeen year old car. The old geezer Kalifornia Income Tax deduction helps as we pay little or nothing in State Income Tax. What HURTS is the sales tax & high gasoline price & license fee but our insurance isn't bad.
Buy NOTHING on credit you can't pay for that month & everything you can pay for with a credit card that pays rebates.
Always ask if there is an old geezer discount. You get some in places you wouldn't expect.

kimi

You folks are fortunate in that you don't live in the Seattle area. I think it might be good to look at some place else like Wyoming. My wife can't take the heat, or I'd be back in Texas ancome to know a whole bunch of cousins that I've never had the good fortune to meet.

hillbille

social security  should have sent you a letter every year or two telling you what you can expect at each certain age, if you have a company pension you can request the same from them, or otherwise take the SS money deduct the difference from it and your weekly income now from your 401.  this should give you a ballpark of how long the 401 will last and if you can afford to retire now or later.......

bustedknee

danielgage,

You did not tell us how long until you become eligible to retire.  VERY IMPORTANT

Can you live on $5000 a month from this point in time until retirement?

Our situation is/was very close to the values you quoted.  We lived on retirement dollars (50% of my income) for several years before we retired and invested the overage (50%).

While working I purchased most of the equipment I felt I would need in retirement.  Guns, tools, vehicles, etc.

Career planning for me started mid career.

I have friends, my age, that are still working, 12 years after I pulled the pin, simply because they couldn't even live on 100% of their income while working.

After retiring in Alaska we moved to Virginia, near where we grew up, to be near elderly relatives.  SW Virginia has good climate, Interstates in all 4 directions, and cost of living is very reasonable.  Our retirement pay is more than many, if not most, working families around here.  I used invested money to purchase our retirement place and some hunting land up the road a ways.  No mortgages.

I brought excellent employer healthcare with me even though it is expensive.  I even added eye care and dental.

I considered many places for our retirement.  Panama, VA, north Fl. WV, NC, TN, and others.  We prefer 4 seasons, hunting, fishing, decent shopping, access to healthcare and we love the mountains.  Several states do not collect taxes from retirement incomes so FL and TN were very tempting, especially Mtn City, TN.  However the state must somehow raise money for services and TN sales tax was a bit higher than VA.  We wanted to live in Mtn City, TN and shop in Bristol and Abingdon, VA. 

But about that time TN let-go of a bunch of public hunting land and real estate went crazy (too close to the colleges in Boone?).

My uncle gave me some advice when we first got here, "Don't settle - there are a lot of houses on the market - keep looking."

We found this house on 17 mountain acres with a pond, fruit trees and not another house in sight.

 

My advice:

Plan ahead/research.  10 years minimum, if possible.

Save/invest.

Practice living on your retirement income.

Live where it is cheap.  Move if you must.

To answer your question:

Yes, if you plan it well.

Sorry about being long winded but we have been blessed and extremely lucky.  I feel you can make your own luck.

danielgage

8 years from now I will be eligible to retire 

chme

There is no "one size fits all".
We live in the country, Central VA.  Property taxes reasonable.  We have no debt.  Wife and I are both on Medicare- I have a Medicare supplement.  We both draw Social Security (full retirement age, wife gets another 50% of mine) Had money we had stashed in 401K and IRAs.  Before retirement, was making a bit over $100k.  After, we make about $72K.  And we are comfortable.  

You can't get 1% on a savings account, CDs are a joke- but I have been averaging over 7% a year from Fidelity Puritan fund, 30% bonds, 70% stocks.  Have 2 annuities that will pay us $24K a year as long as we live.  My checking account keeps going up, since we spend less than have coming in.  

Do not have the costs associated with going to work.  Shorts and T shirts until weather gets cold.  Not planning to vacation in Cozumel or Barbados- but if I want to buy a used RV, I can write a check for it.  Amazing how much further money goes when you are not paying interest.  One thing I WOULD suggest- sit down with a good financial planner. 

Tcatt

You will have more peace of mind if you get with a certified financial planner who also is, or is associated with an insurance specialist.

Make sure you have a long term health care policy.

Good luck

danielgage

thank you all

bustedknee

chme said "good financial planner".

Tcatt said "certified financial planner".

Very important!

There are a lot of scammers out there. Some will simply steal your savings while others just want to sell you something.

danielgage

thanks everyone I know I need to talk to a financial advisor but finding one that is honest and really good is the problem

I know some of you are honest and been through it

in my lifetime the school of hard knocks has taught me things the hard way too many times

now I am trying to listen to people older and wiser than I

and there are a lot on here wiser

Bubba Jr.

I went with Edward Jones years ago, and have been very happy with the outcome. There are a lot of brokerage firms out there that are honest. If they find out they have a crook in the mix, they won't be employed very long. After my Dad and his wife died, my step sister and I were co-executors of the estate. We found out that Dad also had an account with Edward Jones. He also did very well with them.

I purchased some bonds years ago, sold some, they retired some, but there are 2 of them I wish that I had bought a lot more of. Ford Motor Global note, and Alltel Corp. Both are still paying well over 7% interest. Stocks are pretty volatile right now, but Exchange-traded funds, (ETF)s, Federal tax exempt Municipal bonds, Mutual funds, Corporate Bonds, and some others are good solid investments. It takes some thorough investigations to come up with the right mix, but that's where a financial advisor is worth his weight in gold.

Good Luck, once you get involved with making money while you sit at home, it will take a while to get the silly grin off your face.

spasmcreeksrun

my 2cts is that property taxes keep going up while your property keeps getting older......cannot imagine where they might go to to pay back all this STOOPID insane covid giveaway......a friend is ahead of the system by owning a small $10K  house half with his brother......taxes are cheap and he stays warm winter and cool summer

mogley98

You only need as much as you spend

armilite

When I retired between my social security and pension I was making about $200 a month more then when I was working. I did retire at 63-1/2 years old. Before the corona virus hit with my part time job I was making$1000 a month more then I was working full time. I did have a lot of debt and since the corona virus hit I was able to knock off over 70% of it. I should be debt free by December. But since retirement almost 6 years ago was I at no point in any financial trouble.

danielgage

I'm thinking I will be fine but just don't want to retire from a decent job and then have to find another afterwards