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Old 06-10-2012, 09:43 AM
 
34 posts, read 69,035 times
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Default Retirement Savings Question

Hi, I'm not trying to intrude into anyones personal financial business, I'm just trying to get a feel for where I fall within retirement savings in comparison to the already retired or very near retirement population.

I am 56 years old. In my company sponsored 401K I have $400K.

Am I high, average or low compared to most people my age that are either already retired or close to retirement?
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Old 06-10-2012, 11:39 AM
 
29,288 posts, read 25,434,796 times
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you probably have more than most your age but its hard to say if its enough without a lot mote info.
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Old 06-10-2012, 12:19 PM
 
Location: The Triad (nc)
17,195 posts, read 21,839,868 times
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Quote:
Originally Posted by dave56 View Post
I am 56 years old. In my company sponsored 401K I have $400K.
Am I high, average or low...?
Quote:
...hard to say if its enough without a lot mote info.
Is the house paid off too? Kids all out of college?
Credit cards? Carrying any other debt?
Job paying enough to save/invest another big chunk each of the next 10 years?
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Old 06-10-2012, 02:06 PM
 
Location: Florida -
4,699 posts, read 3,207,466 times
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Quote:
Originally Posted by dave56 View Post
Hi, I'm not trying to intrude into anyones personal financial business, I'm just trying to get a feel for where I fall within retirement savings in comparison to the already retired or very near retirement population.

I am 56 years old. In my company sponsored 401K I have $400K.

Am I high, average or low compared to most people my age that are either already retired or close to retirement?
Everyone is different and whether you have more or less than someone else is not going to determine your retirement-readiness. Frankly, $400K by itself, with no other income, and even 'average' monthly bills, in today's investment climate .... will likely result in outliving your resources much sooner, rather than later.

The math is pretty straight forward (given that you have a crystal ball to forsee unknown variables.)
Calculate your monthly/yearly budget requirement. Increase that amount annually for inflation, taxes and unexpected expenses. Calculate how much you expect to earn on your invested $400K (if that is your only income source). Deduct your total annual expenses from your invested $400K ROI ... to determine how many years your principle will last! (Be sure to add-in Social Security when you are eligible ... amount available on line at SS website). Then figure out what you are going to do after the money runs out (and you are still only 7#-years old)..... Oh yes; stay healthy or well insured because medical costs will eat-up your plan --- if health insurance costs between now and the time you are eligible for medicare don't eat them up first.

Bottom line, $400K suggests that you have a pretty decent income and lifestyle ... which, based on the inference that you are considering near-term retirement, ... you will be unlikely to approximate in retirement ... with a $400K total 'retirement nut.'

Last edited by jghorton; 06-10-2012 at 02:15 PM..
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Old 06-10-2012, 03:41 PM
 
Location: Florida
528 posts, read 488,375 times
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Quote:
Originally Posted by dave56 View Post
Hi, I'm not trying to intrude into anyones personal financial business, I'm just trying to get a feel for where I fall within retirement savings in comparison to the already retired or very near retirement population.

I am 56 years old. In my company sponsored 401K I have $400K.

Am I high, average or low compared to most people my age that are either already retired or close to retirement?
Based on a plan with about 350 employees you would be near the top in terms of savings. The question is what does the 400,000 mean. The short answer is that it will generate an income of about 16,000 a year. The longer answer may reduce that to 12,000.
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Old 06-10-2012, 04:08 PM
 
29,288 posts, read 25,434,796 times
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i agree ,today your looking at about 12k as a safe withdrawl before taxes.

thats the big problem with retiring. those nice big piles of money we save are certainly quite small when they are used to provide us with a lifetime of income.
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Old 06-11-2012, 04:04 PM
 
34 posts, read 69,035 times
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Hi, yes, I realize knowing how my $400K compares to others doesn't have much meaning but I am just curious how my 401K savings habits has been over the years versus the general population.

I am planning to retire on Dec 31st 2013 just shy of my 58th birthday. By the time I retire I should have close to $450K in my 401K. All major expenses are now behind us, unless something totally unexpected comes up. Our house is paid off, kids are grown and we have their college expenses paid off, daughters wedding expenses are paid off. We have zero credit card debt.

We have only the basic living expenses, food, utilites, land/school taxes, car payment.

I'll be pulling down a $2300 per month pension, $1200-$1400 gains per month from my 401K. At 62 I'll be able to start collecting $1750 per month Social Security. Plus, I plan to work part time after I retire from this stressful, non-rewarding job that I have now. My wife works part time and will continue to do so. We don't live an extravegant lifesytyle. We take maybe 1 nice vacation per year. We like to go out to a nice dinner each weekend but overall we live pretty simple. We will continue to live pretty simple in retirement so I'm thinking my $400K should last awhile.

Any thoughts or insight are welcome and appreciated.

Last edited by dave56; 06-11-2012 at 04:18 PM..
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Old 06-11-2012, 04:32 PM
 
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In today's environment, my thought is that you are retiring way too early.
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Old 06-11-2012, 05:27 PM
 
29,288 posts, read 25,434,796 times
Reputation: 16894
Quote:
Originally Posted by dave56 View Post
Hi, yes, I realize knowing how my $400K compares to others doesn't have much meaning but I am just curious how my 401K savings habits has been over the years versus the general population.

I am planning to retire on Dec 31st 2013 just shy of my 58th birthday. By the time I retire I should have close to $450K in my 401K. All major expenses are now behind us, unless something totally unexpected comes up. Our house is paid off, kids are grown and we have their college expenses paid off, daughters wedding expenses are paid off. We have zero credit card debt.

We have only the basic living expenses, food, utilites, land/school taxes, car payment.

I'll be pulling down a $2300 per month pension, $1200-$1400 gains per month from my 401K. At 62 I'll be able to start collecting $1750 per month Social Security. Plus, I plan to work part time after I retire from this stressful, non-rewarding job that I have now. My wife works part time and will continue to do so. We don't live an extravegant lifesytyle. We take maybe 1 nice vacation per year. We like to go out to a nice dinner each weekend but overall we live pretty simple. We will continue to live pretty simple in retirement so I'm thinking my $400K should last awhile.

Any thoughts or insight are welcome and appreciated.
i would play around with firecalc and see how you do inflation adjusting by 3% a year.

what are you doing for medical insurance? where are the 1400 a month in gains going to come from in flat markets and no to low rates?
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Old 06-11-2012, 05:32 PM
 
Location: The Triad (nc)
17,195 posts, read 21,839,868 times
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Quote:
Originally Posted by dave56 View Post
I am planning to retire... 58th birthday.
...house is paid off, kids are grown... have only the basic living expenses
...I plan to work part time after I retire
...wife works part time and will continue to do so.

Any thoughts or insight are welcome and appreciated.
The question becomes how much of these basic living expenses
can be paid for by that part time income until SS kicks in (the more the better).

The alternative is to dip into the retirement money to pay living expenses.
This is never a good idea but doing it to the tune of $5000 a year...
is a different discussion vs $50,000 a year.

hth
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