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I tend to agree with that. I don’t know what their underlying assumptions are, but I think they are typically based off of needing 80-85% of your current income in retirement. My wife works for a brokerage and their calculator/simulator and my own numbers are pretty drastically different. I assume a real CAGR of 4.5-6.5% in my simulations and base our expenses off of what we spend now with a mortgage and 2 kids in daycare. I use anywhere from a 3.5-4.5% drawdown rate. The calculator from the brokerage says we are just barely doing enough to retire in our mid 50s and we are currently saving ~ 50% of our gross income and already have roughly 25% of what would be needed for spending assuming a 4% withdrawal rate in our early 30s.
I don’t need it. Unmarried typically no one has to or needs to settle the estate or pay for final expenses
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You have been and still are.
And again, a sensible person would not be using either one. Post-retirement expenses are not precisely knowable, but they are indeed foreseeable, and it is they and nothing else that a retired person will need to have covered in retirement.
How do you forecast retirement expenses? Most would start from current expenses and make adjustments. Talk about quibbling
I tend to agree with that. I don’t know what their underlying assumptions are, but I think they are typically based off of needing 80-85% of your current income in retirement. My wife works for a brokerage and their calculator/simulator and my own numbers are pretty drastically different. I assume a real CAGR of 4.5-6.5% in my simulations and base our expenses off of what we spend now with a mortgage and 2 kids in daycare. I use anywhere from a 3.5-4.5% drawdown rate. The calculator from the brokerage says we are just barely doing enough to retire in our mid 50s and we are currently saving ~ 50% of our gross income and already have roughly 25% of what would be needed for spending assuming a 4% withdrawal rate in our early 30s.
Well the x% of current income is flawed especially with high savers. If you currently save 50% of gross income then there would be no reason you would need 85% of your current income in retirement unless you just wanted it. That is a flaw and he calculators should be working from an expense figure
I don’t need it. Unmarried typically no one has to or needs to settle the estate or pay for final expenses
Plainly you DO need education, and rather badly. There are no winged forces of financial salvation that will swoop down to deal with things pro bono once one has died. As people will be otheriwise occupied after death, NOW would be a comparatively good time to address the situation with such as a nice cheap term-life policy.
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Originally Posted by Lowexpectations
How do you forecast retirement expenses? Most would start from current expenses and make adjustments. Talk about quibbling
It isn't quibbling to declare with such good reason that your posts here have included much that is simply nonsense. No sensible person would use either current income or current expenses as a yardstick for post-retirement needs. Pre- and post-retirement are vastly different worlds. If you meanwhile can't imagine how to estimate post-retirement expenses, you are in even worse shape than I thought.
Plainly you DO need education, and rather badly. There are no winged forces of financial salvation that will swoop down to deal with things pro bono once one has died. As people will be otheriwise occupied after death, NOW would be a comparatively good time to address the situation with such as a nice cheap term-life policy.
No single person without dependents needs a term life insurance policy. And the state will settle the OP's estate should she die intestate; the costs of doing so will simply be deducted from the estate. It's not the major problem you're making it out to be.
(Now if the OP has a significant estate and cares about where that money goes, that may be a reason to review beneficiaries on her accounts and consult an attorney to write up a will or a trust. But not everyone cares about what will happen to their earthly possessions after they die.)
What the OP does need, though is a durable healthcare power of attorney (and possibly a power of attorney for financial matters as well, although those can be dangerous; putting as many bills as possible on autopay may be a reasonable alternative move). Someone needs to be able to speak on the OP's behalf if critical healthcare decisions have to be made and he/she can't make them, and in the event of a prolonged hospitalization someone needs to be able to make sure critical bills are getting paid.
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No sensible person would use either current income or current expenses as a yardstick for post-retirement needs.
No sensible person would think it is possible to accurately estimate the income needed for a retirement that's 30 years away. The various retirement calculators are guesstimates at best. The OP just needs to concentrate on saving as much as he/she can.
My co-worker in Germany retired at the age of 50, we work for the same global company. He says most people like him retire because the government pushes people to do so to make room for young people and he gets government pension and don't have to worry about healthcare. He made enough money from his job doing similar things like I do and he doesn't have to use a IRA. He has investments and they goes towards his living and enjoyment. Why can't we have the same perks?
You are completely missing the point. I already said more money is better than less money, but that doesn't mean that most people truly need the amounts these financial service companies say is necessary for a comfortable retirement. I'm not saying to not save at all but someone who already has 170K in a 401k at age 41 isn't remotely in that category and doesn't need to be discouraged by an artificially inflated "target" goal that is - in my opinion - at least to some degree a marketing strategy designed to encourage people to put even more more into a Fidelity (or other company) financial services product so that company can make more money.
i agree.
I currently save over 50% of my income. yet advisors tell me to my face i need to plan to have 90% of my income when i retire. And that is even after i tell them i am saving over 50% of my income...
Ref Retire calculators on Fidelity, if i recall correctly they default to the worst 10% of outcomes... if you set it to show the average return, suddenly you are doing great..
My co-worker in Germany retired at the age of 50, we work for the same global company. He says most people like him retire because the government pushes people to do so to make room for young people and he gets government pension and don't have to worry about healthcare. He made enough money from his job doing similar things like I do and he doesn't have to use a IRA. He has investments and they goes towards his living and enjoyment. Why can't we have the same perks?
Plainly you DO need education, and rather badly. There are no winged forces of financial salvation that will swoop down to deal with things pro bono once one has died. As people will be otheriwise occupied after death, NOW would be a comparatively good time to address the situation with such as a nice cheap term-life policy.
You are ill informed. If you die unmarried and no kids as I’ve prefaced no one you know has to settle your estate or pay for the final expenses of desposing of your body generally
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It isn't quibbling to declare with such good reason that your posts here have included much that is simply nonsense. No sensible person would use either current income or current expenses as a yardstick for post-retirement needs. Pre- and post-retirement are vastly different worlds. If you meanwhile can't imagine how to estimate post-retirement expenses, you are in even worse shape than I thought.
Current income is often used as a starting point but using current expenses is a better starting point and you make adjustments from there. You have to have some baseline to start from to model your future expenses so rather than completly starting from zero it makes all the sense in the world to start with your current expenses and make best estimates as to the adjustments that might be needed 20-30 years from now.. You don’t need to worry about the shape I’m in.
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