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Old 11-09-2007, 08:47 AM
GLS GLS started this thread
 
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As much information as I try to gather, I'm still in the dark as to where my financial retirement plan fits compared to other people. If you ask a financial planner they always give you the same vague answer, "it depends on your lifestyle, where you live, etc, etc. Of course this is true, but it doesn't tell you specifics on how other people plan to make it. Also, it's considered rude to ask this question directly of friends or co-workers. Therefore, since this forum is anonymous, I thought someone might be willing to share the specifics of their plans. Anyone planning to make it on $2K/mo of Social Security? Any data on how much the average 50yo, 55yo, 60yo has set aside in savings? Anyone taking out 30 yr mortgages with the plan they will die in 10 - 15 years and not have to pay off the rest? Please share your stories. Thanks.
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Old 11-09-2007, 10:10 AM
 
Location: WA
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I've worked with a number of middle class retires that have plans to live on the earnings from savings combined with social security. The standard of living, budget, housing costs, etc. does make a big difference. In general I have seen people with $200,000 to $2 million plus social security living comfortable lifestyles. I know others that make it on SS alone but they have paid for housing, transportation, and medical care and a more modest lifestyle.

If you calculate your budget and work backwards you can get a ball park number. A 4% withdrawal from savings combined with your SS needs to be enough to cover your expenses.
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Old 11-09-2007, 11:45 AM
 
Location: Tennessee
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Quote:
Originally Posted by GLS View Post
As much information as I try to gather, I'm still in the dark as to where my financial retirement plan fits compared to other people. If you ask a financial planner they always give you the same vague answer, "it depends on your lifestyle, where you live, etc, etc. Of course this is true, but it doesn't tell you specifics on how other people plan to make it. Also, it's considered rude to ask this question directly of friends or co-workers. Therefore, since this forum is anonymous, I thought someone might be willing to share the specifics of their plans. Anyone planning to make it on $2K/mo of Social Security?
How much do you NET per month while in the workforce and would you say you are living comfortably, making it or struggling?

Is your goal in retirement to live the same lifestyle you have now or do you have bigger plans for what you want to do/own in retirement?

I took a $55,000 hit in my GROSS from working paycheck to retirement pension and I can tell you with no change in my lifestyle, I'm living just fine on my pension doing and buying the same things I wanted/liked when I was working. The primary reason is my net didn't change all that much even the my gross did and some big expenses disappeared.

I also moved to a no income tax state, not because it was a no income tax state but because the things I wanted to do in retirement were there. My rent for a brand new, twice as big apartment is about $317 less per month. My car insurance (same company, same policy, same vehicle) went down about $300 per year. My renters insurance went down. My electric bill is half of what it was where I lived before.

These expenses took the biggest hit in retirement:

1. Gasoline - I moved to a town with everything I like/do on a regular basis is right in the town. Gas prices may be going up but I have a huge savings on gasoline simply because I no longer commute to work.

2. Dry cleaning - I live in play clothes 95% of the time now. This was a big monthly expense when I was in the workforce.

3. Eating out or in for lunch every day - When in the workforce, I bought lunch out or paid for lunch in the cafeteria, bought drinks (coffee/tea/soda) and snacks to eat at my desk. I also was too tired to cook at home a lot so I also bought a lot of takeout at night. While I still might do these things on occasion, it's not 5 days a week I'm spending this kind of money and it adds up.

4. Office contributions for this or that party/gift, flowers, cards at least every other week. Going out to celebrate some office occasion.

5. Buying work outfits. Jeans and tee shirts are just fine for me now.

I didn't have to change my lifestyle for any of the above. But, I never liked to travel so that was not a goal (do more traveling) for retirement. I never liked or acquired expensive things like jewelry, for example, when I was in the workforce so retirement had no impact. I lease a sedan and when the two-year lease is up will probably lease another (same make and model).

I like electronics, software and books. I still buy electronics, software and books. I would say those are my biggest expenses besides food. I like to go to classes. My school costs me $90 per year. Did I pick it for the cost? No, I picked it for the courses. I like to fish from shore. I like to take photos. I like to go to town concerts. I like to discuss politics on the Internet. I like to go to fairs/festivals. Almost all of these things aren't expensive activities but I don't buy/do them because they're cheap. I do them because they are things I like to do. If you have plans to do expensive activities in retirement, you need to consider it.

Off the top of my head, you need to figure out:

1. What is the net pay you are actually living on per month, now?
2. Are you living comfortably, within or beyond your means now?
3. What expenses will go away when you stop working? Any new expenses you didn't have when working like health insurance, maybe?
4. What kind of lifestyle are you looking for in retirement?
5. Will you have enough for an unanticipated event?
6. Are you planning to move to someplace cheaper? What will you save by moving?
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Old 11-09-2007, 02:17 PM
 
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I would like at least 6 Million and just live off the interest...
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Old 11-09-2007, 02:33 PM
 
Location: Lovelock, NV - Anchorage, AK
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My husband and I will live off his retirement pension and his work required him to save and they matched it so we will have in excess for $400,000 I myself have very little maybe $40,000 in an 401K, I think that we will do fine at least I hope that we will do fine. Our medical insurance will be paid for by the employer in our retirement until at 65 year of age and then of course medicare kicks in and the primary goes to secondary.
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Old 11-09-2007, 03:21 PM
 
Location: DC Area, for now
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What a great list. Thanks.

One of the things I'm starting to do is try to live on the net I expect to have in retirement as much as I can now and bank the rest as much as possible. I've got 2 years to go. Sort of a test run for the life I anticipate I will lead.

I stopped buying coffee out and lunch out for the most part. Its healthier anyway and really does save money.
I just paid off my mortgage but a fair amount of that savings is going to go into things to freshen the house like a new roof, kitchen, new floors, a ton of paint, new doors, etc. My budget shows my annuity will cover my living expenses at the same rate as my current lifestyle if I don't have a mortgage.
My savings are a security pad for the unexpected.
I plan on relocating and buying another house for approximately equal value for what my house will fetch. Any place that will not get me equal value is off my list of where to go.
I do not intend to buy any more work clothes. I've got full closets now and expect most of what I will wear in retirement will be play clothes. The work clothes I've got should last me the rest of my life if I need to dress up for something.

I have some good long life genes I hope I inherited so I intend to spend a good long time in retirement. Dying early is not in my plans.
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Old 11-09-2007, 04:37 PM
 
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At 54 with a good old-fashioned pension, I will be maxing out my 403b by age 55. If I work full-time to age 65, I should have about $1 million with about five years of mortgage left. I also have the option to work part-time forever with pro-rated health benefits or to work on-call (my own choice of working or not working at all) with no benefits but being paid 12% premium.
I consider anything in the next ten years to be in-between. While it'd be great to have a nest egg of $1 million, my job is eating me alive and I can see many reasons to ratchet back sooner, not later. My job is unlikely to go away/downsize, etc., so it's up to me. Believe me, if we had some form of national health insurance for me, I'd consider things somewhat more flexible, and might try harder to "retire" or really retire sooner. In fact, I am considering cutting to the part-time slot within maybe five years. I don't see myself having enough money (or inclination) to run around the world or anything, so if I'm living quietly here in my dream house with dogs, I think it could be painless to work two shifts a week and get paid for three.
If I figure out a way to spend summers out West, that would be different. But the catch is, to do that, I have to work more and longer, right here.
I consider the next ten years to have a lot of leeway for choices, assuming nothing unexpected and awful turns up in my life (which is could, of course, for anyone). Somehow I don't factor in something unexpected and wonderful. I guess ya learn from experience!
I should have about $500K at age 59 1/2, with about ten years of mortgage.
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Old 11-09-2007, 05:50 PM
GLS GLS started this thread
 
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Very helpful and very interesting responses and I thank all of you. I see some commonality with several that helps explain my concerns. I am 61 and my wife is 56 (she doesn't read this post so I'm ok admitting this). We have always been very fortunate financially because we have two professional incomes and no children or family members that we are financially responsible for. Our net is about $20K/month, no credit card debt, no car payments, etc. We have never really had to have a budget due to good income. The problem is that when the jobs stop our revenue with Social Security, her pension (I have none because I'm self-employed), and using the 4% withdrawal of savings suggested , will give us about $8K/month. I plan to work part-time because I enjoy work and don't really have any hobbies. However, my health may prevent me from working much. This is a strange feeling because whenever I wanted to buy something in the past, I just worked more, saved until I could afford it, then paid cash. I paid off our mortgage last year, but now combined with the self-employment tax the government is eating our lunch, and the political winds of 2008 don't give me much optimism for tax relief.

Here is the kicker. My wife's hobby will probably be the most expensive part of our retirement. She loves training hunting and obedience dogs. We have property in another state and would like to build a "vacation" home there because the area is becoming a summer mecca for dog training. The cost will be about $500K and we have already considered all the possible compromises and can't build it for less. The plan would be to stay there about 6 months out of the year, and return to our primary residence in the Winter. We don't want to sell the primary residence because we worked too hard to get it the way we like it, and winter in the vacation area is out because it's like being naked at the North Pole. This means little or no down payment for the vacation project and borrowing $417K conforming. I figured this will give us a good tax deduction and a free ride for the last 15 years of the 30 year loan because I won't be around that long. If I follow the approach I did all my life i.e. try saving the $500K and pay cash, I'll be dead before we build the house. On the other hand I'm used to a "no-debt" existence and the thought of having a $3K mortgage going into retirement gives me the willies. I think it's a good plan for us, but I'm not much of a risk taker.

Just thought I would share that since everyone has been so forthright. Also, sorry for rambling. It's the end of the week and I'm somewhere between hysterical and demented. Finally, let me emphasize that I didn't start this thread to focus on my problems or seek specific advice. I learn more by hearing other people's circumstances and their decision-making process.
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Old 11-09-2007, 07:03 PM
 
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I will be retiring in a few years, but several years ago started reducing the net amount I need every month to survive and yet not feel strapped or that I'm making any sacrifices. As it stands right now, I could get by comfortably on $1,200/month. With my s/s, savings and 401k, I would be able to survive and be happy as a clam since I wouldn't be going to work anymore!!
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Old 11-10-2007, 12:45 AM
 
Location: Tampa, FL
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"How much money do you plan to retire on?"

When I retire, I'll be 46 yo, single, have a portfolio of mutual funds $700,000 (combo Roth/and non-IRA) and will gross $4k/month retirement income. I'll likely retire in SC or GA where retirement income is taxable. I have few hobbies except golfing, attending pro sports events, reading, music. I will either buy a house or rent an apartment. Being single on this retirement check, I'm hoping that I can survive comfortably without having to return to the rat race.
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