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Everything I have ever read says we should be retiring with about a million-dollar nest egg. However, every statistic says that Americans are retiring with much much less.
So what’s the truth, how much do you really need and how do people retire on so little?
Just trying to understand the disparity of the two and the possible economic implications this will have as the population ages.
Everything I have ever read says we should be retiring with about a million-dollar nest egg. However, every statistic says that Americans are retiring with much much less.
So what’s the truth, how much do you really need and how do people retire on so little?
Just trying to understand the disparity of the two and the possible economic implications this will have as the population ages.
I think for the general population retirement is a piecemeal process. They work a little, they get a little money from a pension or retirement accounts and social security.
From what I've read it's my understanding that many of these individuals will outlive their funds.
If this is true, my question is what happens to all these individuals (and younger tax payers) in 10-15 years?
The number reported is "retirement savings". What about other savings, property owned, business ownership, pending inheritance, etc. There are a lot more "monies" around to support people in their old age.
Everything I have ever read says we should be retiring with about a million-dollar nest egg. However, every statistic says that Americans are retiring with much much less.
So what’s the truth, how much do you really need and how do people retire on so little?
Just trying to understand the disparity of the two and the possible economic implications this will have as the population ages.
you are reading the wrong things if they are giving you a number . .
no one can say what you need . it is based on your investing allocation , temperament and the success rate of maintaining the draw rate you need .
there is no magic number for that , it is like asking how long should a rope be .
don't forget someone who is gun shy and is not going to use equities vs someone who needs the same draw and will use a 50/50 or 60/40 mix may need 2x as much saved.
there is no magic number for any of us . it all depends on the lifestyle you are willing to accept and where you live as well .
we don't need much more then a tent in a camp ground in a warm area , but is that how you want to live ? .
Everything I have ever read says we should be retiring with about a million-dollar nest egg. However, every statistic says that Americans are retiring with much much less.
So what’s the truth, how much do you really need and how do people retire on so little?
Just trying to understand the disparity of the two and the possible economic implications this will have as the population ages.
You have to do your own budget. But I think the point is you might need more than you think.
If your lifestyle is to spend $100,000 a year then a million will not cut it. The million, depending on a lot of factors, will give you about $40,000 of income per year. You will have some taxes to pay. To the 40,000 you can add your social security income and pensions to get your estimated retirement income.
A good way to get a ballpark is to take what you currently spend each year. Adjust to a retirement budget. Remember higher healthcare costs and you may need more help than you do now. From this amount deduct ss and pensions, then multiply the result by 25. This is what your savings should be if all of my assumptions about you are correct.
Remember this is a ball park to show you if you have a problem. You need a lot more work to get your actual answer.
Everything I have ever read says we should be retiring with about a million-dollar nest egg. However, every statistic says that Americans are retiring with much much less.
So what’s the truth, how much do you really need and how do people retire on so little?
Just trying to understand the disparity of the two and the possible economic implications this will have as the population ages.
It depends on how old you are. $1 million plus a Social Security check and a paid-for home is a fairly comfortable retirement using 2017 dollars for someone age 55+. If you're age 25, inflation is likely to make the target number much higher and it's likely the Federal Government will mess with Social Security so people who actually save for retirement will be penalized.
In the 2010 US census, 70th percentile household net worth for age 55 to 64 was about $350K. I imagine it's gone up some with the stock market rise but probably 60% of near-retirees have almost no retirement savings and little beyond some home equity. Few of those have any pension beyond Social Security. That makes for a very modest retirement.
it does not matter what census numbers are , median or average incomes or anything else out there .
all that matters is you can live the lifestyle you want , where you intend to live .
to be honest we likely would not have retired yet had we had 1 million spinning off about 40k plus social security where we live in nyc . we have zero intention of moving , our kids and grand kids are all here and we require a much higher income to live the way we would want ..
so while anyone can make do with any amount , the lifestyle changes it would take , including leaving our area would not be something we would want to do unless forced to .
does it matter to me what median incomes are across the country ? not one bit . .
The BIG Numbers are touted by those selling financial management services. Otherwise, one needs a dependable income base, a hedge against inflation and emergencies and a reliable healthcare plan.
It depends on how old you are. $1 million plus a Social Security check and a paid-for home is a fairly comfortable retirement using 2017 dollars for someone age 55+. If you're age 25, inflation is likely to make the target number much higher and it's likely the Federal Government will mess with Social Security so people who actually save for retirement will be penalized.
In the 2010 US census, 70th percentile household net worth for age 55 to 64 was about $350K. I imagine it's gone up some with the stock market rise but probably 60% of near-retirees have almost no retirement savings and little beyond some home equity. Few of those have any pension beyond Social Security. That makes for a very modest retirement.
I would agree that most people 55+ with a paid off home, $1 million generating 40k, and SS should be able to retire comfortably. I certainly could, even in a high COL area.
But most people just cannot get a handle on their expenses, IMO. Not only do they not want to control their expenses, they don't even want to track them because it brings on such angst to realize how little control they have. And then you've got those who are scared to death of equities, which means their "number" is much larger. No wonder so many people just throw their hands in the air and give up.
If you are serious about retiring, track your expenses for a few years. Then decide how much stomach you have for risk. That will give you a better chance at determining a realistic number.
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