Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So there's a really good matching program at the company I work for and I intend to take full advantage of that. I'm 41, likely to remain single and unlikely to have any cash windfalls come my way. My two best friends and I are looking to retire together, and really, our tastes are simple. (And yes, I understand that a lot can change before retirement but we've been besties for 25 years and there have been no signs of that or our single status changing. They are also white-collar professionals.)
My main focus right now is on clearing all the (mostly low-interest) debt I carry beyond my mortgage, and I should have that taken care of within the next 18 months-2 years. With any luck, there will only be low-interest debt in my future.
I currently have $170K in a diversified portfolio (stock and bond index funds) and with the matching, I will probably be putting away $12K-$15K a year, with that slowly increasing with my salary. I plan to retire late because there is a great deal of longevity in my industry and I enjoy my job, so I've got another 30 years of contributions ahead of me.
Is that going to be enough? My Fidelity simulation basically comes back with a "maybe to meh" evaluation, but I kind of feel like that's the equivalent of a magic 8 ball and I'm not sure how biased their model is. I anticipate a pretty quiet life - my mother is always going on cruises and doing tons of shopping, but that's not really me. Also, I'll be living back among my extended family by the time I'm ready to retire (again, if all goes as planned), so I will have a good support system, which I've found cuts costs.
I've just been thinking a lot about this given the way Social Security and Medicare are so up in the air. I'm just trying to have an idea of what's coming down the pike as I age.
^^^The problem is that there's no way to know what's coming down the pike, either with the markets or with your personal life. You may not be able to work until age 70 no matter how much you wish to do so. And who knows what will happen in the economy over the course of the next three decades? All you can do is tuck away as much as you reasonably can, and hope that when retirement comes it will prove to be enough. Beyond that there's no point in worrying about it.
What’s your current income? Given that you are 41 it may as already been stated not be your choice to work well into 50s let alone 60-70s so I wouldn’t plan for that. How much do you need annually in retirement ?
I can't answer for you specifically but I find that the calculators that financial services companies use have a default presumption in favor of trying to convince you that you need to save more - i.e., invest more money with them.
On the other hand, if you are carrying 18 to 24 months worth of debt, it suggests that you may need to do a better job of learning to live within your means - and the fact is that is a skill that isn't directly correlated with how much income you have (wages now, retirement income later on).
Where is that debt from? What is going to keep you from racking it up again if a similar situation arises? This isn't judgement because I don't know how it was incurred but if it was because you needed to replace a furnace, what you are going to do when you need to replace the roof? (and that's assuming it was a necessity vs. a vacation or new furniture or something far more discretionary).
I can't answer for you specifically but I find that the calculators that financial services companies use have a default presumption in favor of trying to convince you that you need to save more - i.e., invest more money with them.
On the other hand, if you are carrying 18 to 24 months worth of debt, it suggests that you may need to do a better job of learning to live within your means - and the fact is that is a skill that isn't directly correlated with how much income you have (wages now, retirement income later on).
Where is that debt from? What is going to keep you from racking it up again if a similar situation arises? This isn't judgement because I don't know how it was incurred but if it was because you needed to replace a furnace, what you are going to do when you need to replace the roof? (and that's assuming it was a necessity vs. a vacation or new furniture or something far more discretionary).
You should have term life and disability insurance before long-term care, but LTC premiums can price you out of the market if you don't start young. Early 40's is about the end of young in more ways than one.
What I have to say has mostly been covered. You really shouldn't assume you will be able to work to age 70. At age 41, you have a long investment time frame so you probably should mostly be in equities for any new money you put in.
Depending on what your state income tax looks like, you might want to be in a Roth 401(k) instead of a conventional 401(k). You can kind of assume that by the time you get there, Social Security and Medicare are going to be heavily means tested. 401(k)/IRA distributions show up as income. Most people pushing $15K/year into a 401(k) are going to be in the 24% bracket for 2018. It's probably worth placing the bet to pay the tax now while tax rates are so low.
Single and long term care insurance at age 41 don't make much sense. You're way better off investing the money than paying what is likely 30+ years of premiums for a policy that won't be worth much after 30+ years of inflation. If you land in a nursing home and run out of money, it's not like you have a spouse you need to protect. You're going to get conflicting opinions on this but the majority of people don't land in long term care and the impact of inflation on the policy could render it nearly worthless. If you have access to a portable corporate group LTC policy, that could be a different story. With a private individual policy, your outcome is likely better investing it yourself in stocks rather than handing the money to an insurance company for 30 years. The big deal at age 41 is long term disability insurance, not long term care insurance. The SSDI payout is pathetic.
You should have term life and disability insurance before long-term care, but LTC premiums can price you out of the market if you don't start young. Early 40's is about the end of young in more ways than one.
OP has no dependents, why would she need term life? She probably gets one or two times salary anyway, which would go to pay off any debts, cover her mortgage until her house can be sold, etc. She doesn't need to provide a windfall inheritance to someone who doesn't rely on her income. Disability insurance, yes, that's a must.
LTC is debatable, the idea is good but it doesn't have the greatest track record and it's expensive.
Presumptions about how much income people will need in retirement. Sure, more is always better, but I still think that these companies are using these calculators as a marketing tool to influence people to invest more. Most people manage to retire with far less than the so called minimums you read about in artices or get when you use a calculator.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
