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Old 04-10-2014, 06:36 PM
 
Location: Whidbey Island, WA
12,272 posts, read 11,326,033 times
Reputation: 6119

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We have worked hard. Did not invent anything not so far won the lottery. At retirement in about 6 years we will have the following:

1) a paid off home worth about $300k. Rents for $2100/mo
2) social security monthly income around $4500/mo
3) about 50k in savings 401k.

As I read I am concerned that we don't have a lot in savings. Do you think we will be ok?

Thanks fellow travelers.
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Old 04-10-2014, 06:47 PM
 
Location: Los Angeles area
14,018 posts, read 17,740,386 times
Reputation: 32304
Depends on how you define "O.K." (For some people, O.K. would mean having designer clothes). I think you will be O.K. because a married couple with a paid off house can live quite comfortably, albeit not lavishly, on $4500 a month (SS is inflation protected) unless you are talking about living in New York City, Honolulu, or San Francisco.
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Old 04-10-2014, 07:35 PM
 
48,516 posts, read 83,943,432 times
Reputation: 18050
I say a lot depends o where you live and your life style.try living on that for a few months but consider inflation also.
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Old 04-10-2014, 07:49 PM
 
Location: Columbia SC
8,969 posts, read 7,745,489 times
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Quote:
Originally Posted by texdav View Post
I say a lot depends o where you live and your life style.try living on that for a few months but consider inflation also.
I agree.
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Old 04-10-2014, 07:59 PM
 
Location: USA
271 posts, read 314,839 times
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Your in very good shape. Using the 4% rule it would require $1,350.000 in investable asset to generate $4500 a month in income, so with your home and 50k in savings your net worth is $1.7 million.
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Old 04-10-2014, 08:09 PM
 
Location: Whidbey Island, WA
12,272 posts, read 11,326,033 times
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Sorry I don't follow Cameron60 your example.
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Old 04-10-2014, 08:37 PM
 
Location: USA
271 posts, read 314,839 times
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Quote:
Originally Posted by AADAD View Post
Sorry I don't follow Cameron60 your example.
The rule amongst many financial planners and investors are on the day of your retirement total all of your investable assets and take 4% of that amount out each year adjusted for inflation to live on.
So if someone had $1,350,000 invested, in the first year they can withdraw 4% or $54,000 which is $4500 per month.
In your case your SS is drawing the same monthly income as a person with no SS and had the $1.35 million invested. Your SS is inflation adjusted so in year 2 and each following year you should get a bigger check.
With your 50K in cash and the equity in your home you have another $350k.
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Old 04-10-2014, 09:06 PM
 
Location: Florida
4,365 posts, read 3,702,696 times
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No hint on your budget.

Consider saving a little each month to help with future inflation.
The 50k in the 401k is not a lot so major expenses could be a problem.
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Old 04-11-2014, 03:15 AM
 
29,782 posts, read 34,871,258 times
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Quote:
Originally Posted by Cameron60 View Post
The rule amongst many financial planners and investors are on the day of your retirement total all of your investable assets and take 4% of that amount out each year adjusted for inflation to live on.
So if someone had $1,350,000 invested, in the first year they can withdraw 4% or $54,000 which is $4500 per month.
In your case your SS is drawing the same monthly income as a person with no SS and had the $1.35 million invested. Your SS is inflation adjusted so in year 2 and each following year you should get a bigger check.
With your 50K in cash and the equity in your home you have another $350k.
How to access that home equity needs to be considered. Taking out a regular home equity loan involves debt and monthly payments. Reverse mortgage is another set of realities.
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Old 04-11-2014, 03:39 AM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by AADAD View Post
We have worked hard. Did not invent anything not so far won the lottery. At retirement in about 6 years we will have the following:

1) a paid off home worth about $300k. Rents for $2100/mo
2) social security monthly income around $4500/mo
3) about 50k in savings 401k.

As I read I am concerned that we don't have a lot in savings. Do you think we will be ok?

Thanks fellow travelers.
I would share your savings concern. How much do you have saved in liquid assets that don't trigger taxes, debt or interest when/accessed? Things like traditional savings, Roth or taxable investment accounts.
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