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Old 01-22-2015, 03:33 AM
 
71,657 posts, read 71,801,099 times
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money is like water and it will always find its own level. so many times you see folks post all their bills which are pretty much their needs and while the budget works on paper I am like where are the wants ,the dreams ,the goals you had for retirement .

having all that free time and no money to enjoy your life's wants wouldn't be much fun to us. sure we could make do with 1/2 our income but all these being equal I rather not.

there is also the mental stress of sweating every next big expense that isn't on that paper as well.

nothing beats having the money to throw at that new furnace ,roof or dentist and it is a non event.

nothing is a problem ever if you have the money in the budget to make it go away. as far as I am concerned when asked this question above there is no top or bottom. you will adapt.
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Old 01-22-2015, 04:54 AM
 
Location: Texas or Cascais, Portugal
3,422 posts, read 3,186,306 times
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My experience has been that most people can retire comfortably until the "last years". When you are at the point where you need help with independent care e.g, a nurses aid to come in daily or worse, assisted living, the money is gone in short order. And the reality is, most of us WILL need that at some point. Too many assume they will never get to that point or, that their children will care for them. It's a full time job that is difficult for children who have jobs and families and I wouldn't count on it long term. I purchased Long Term Care Insurance from a reputable carrier with a 5 year coverage plan. It's expensive and I hope I never need it but seeing all of my relatives in their late 80s and 90s, I know there is a good change I will. I want my retirement savings to be used for "the good life" as long as possible. When my health is gone but my body refuses to die, I'm counting on that insurance to pay for my care.
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Old 01-22-2015, 05:37 AM
 
71,657 posts, read 71,801,099 times
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same here . our partnership plan with ny only required 3 years coverage and gave us many perks regular LTC INSURANCE does not.

regular LTC insurance requires not only asset shifting for when the insurance runs out but the biggest issue is the stay at home spouse is bound by income limits if the spouse in need of care shifts to Medicaid.

partnership plans like ours require neither.
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Old 01-22-2015, 06:09 AM
 
6,484 posts, read 3,082,388 times
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Quote:
Originally Posted by mathjak107 View Post
money is like water and it will always find its own level. so many times you see folks post all their bills which are pretty much their needs and while the budget works on paper I am like where are the wants ,the dreams ,the goals you had for retirement .

having all that free time and no money to enjoy your life's wants wouldn't be much fun to us. sure we could make do with 1/2 our income but all these being equal I rather not.

there is also the mental stress of sweating every next big expense that isn't on that paper as well.

nothing beats having the money to throw at that new furnace ,roof or dentist and it is a non event.

nothing is a problem ever if you have the money in the budget to make it go away. as far as I am concerned when asked this question above there is no top or bottom. you will adapt.
I agree with the caveat that not everyone's wants are expensive as the next person. I have a lot of hobbies that cost next to nothing; on the other hand I spend a lot entertaining friends/family and I would be miserable if I had to agonize over every penny I spend on that.

You also hit on the two things I think have the biggest potential for underestimating. Home repair and health. We spent next to nothing on health care before retirement. In the first two years we ended up with bills of a few thousand dollars for a collection of minor things and two hospitalizations.

Ditto with home repairs. I budgeted for them, but I failed to research thoroughly enough for my new home. Who knew a heat pump/A/C in Florida only lasts 7-10 years. The one I had in NY was 20 years old and still kicking. I budgeted the extra expense for having a pool, but didn't realize I would also need to have the screen enclosure cleaned every year. No budget for water, but the pump requires repair/replacement.

So especially if you are moving to a different climate research the extra costs associated with that. Fortunately, we had savings to make all these things a non-event other than the aggravation of taking care of them. But, if we hadn't, we would have really been scrimping on food because a lot of these expenses came clustered together.
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Old 01-22-2015, 07:26 AM
 
5,617 posts, read 13,765,136 times
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Quote:
Originally Posted by Nor'Eastah View Post
There are lots of "assets" in life, and time is one of them. Of all the assets you own, time is the only one that no one else can take from you. "Requiring" someone else to work a longer time because you personally don't think they have "enough" to retire, is equivalent to stealing their time.

Let him retire when he wants to. He will be just fine.
beautifully put!
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Old 01-22-2015, 07:45 AM
 
Location: Manhattan
664 posts, read 640,812 times
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For a household earning the national median HHI ($50,000), the retirement savings you'd need to generate the kid of (semi) indefinite income that would enable you to continue living your current $50K lifestyle (assuming no pension) would be close to $2 million.

Unfortunately, that figure is mathematically impossible for the median HHI earner; he or she would have to work and save for about 150 years.

That's why all this hype and propaganda from the financial services industry about 401(k) and IRAs is just a way to soak ordinary workers with fee after fee after fee.
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Old 01-22-2015, 09:09 AM
 
29,782 posts, read 34,880,403 times
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Quote:
Originally Posted by NYCTelevisionWriter View Post
For a household earning the national median HHI ($50,000), the retirement savings you'd need to generate the kid of (semi) indefinite income that would enable you to continue living your current $50K lifestyle (assuming no pension) would be close to $2 million.

Unfortunately, that figure is mathematically impossible for the median HHI earner; he or she would have to work and save for about 150 years.

That's why all this hype and propaganda from the financial services industry about 401(k) and IRAs is just a way to soak ordinary workers with fee after fee after fee.
Not if they buy low fee index funds like many have learned to love and prosper from. Also there are many lower fee active funds from Vanguard, Fido etc. Just ask the many in this forum who have prospered from!
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Old 01-22-2015, 09:58 AM
 
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Going on a very loose basis, without knowing the individual. The rule of thumb right now is that a couple should have around a million in net worth upon retirement. Due to the benefits of sharing costs, a single individual should have a little more than half of that.

Some people have different definitions of comfortable and some people feel entitled to live where they please, costs be darned. If someone tries to live in San Fran during retirement without saving for it, I have no qualms about them eating cat food because they are choosing to live in San Fran when they can't afford it.

To sustain human life and dignity in a reasonably low cost area, it costs around 18000/year for a couple if they need cars to get to work. Low cost areas rarely have any decent public transit. With lower fuel costs / not having a job, that can be whittled down to around 17,000 per year. If we assume a yield of only 3% after taxes, the portfolio would need to be $567k. Note: This includes enough to cover rent for a crappy apartment, but NOTHING for medicine or specialized care.

If someone is younger, it is possible for a couple to survive on around 11,000/year if there is no cost of rent but utilities must still be paid.

Low COL area, rent runs around 7k/year. If you own the property, you can reduce costs by 7k but then must add back whatever is paid in taxes. If the house requires higher utilities, those must be added back as well.

Your husband is right to say that owning a home is critical to retirement. Owning a low COL area and staying put makes it dramatically cheaper to retire. I'm a financial analyst, and contrary to what "Rich dad" says, my best investment as been my house. I actually charted the returns on it as an investment with the condition that having a house meant I did not pay rent. Because of the amount it saves me from not paying rent, the house becomes a great investment. Buying a larger house would not have been a better investment. I bought exactly what I expected to need for the next 30 years and took advantage of the low rates. The mortgage payment is cheaper than rent, so I save money every month before we even get into appreciation or paying down the principal.

One of my goals is to not sell real estate. I will buy it, but not sell it. Each piece I acquire will be turned into a long term source of cash flow either from renters or from saving me money I would have spent on renting.
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Old 01-22-2015, 11:03 AM
 
19 posts, read 39,534 times
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You got the right answers above in run the numbers as they apply TO HIM/you. There are people that can live like kings on the same amount that barely gets another by, usually from excess, but also as to where they live, and any number of factors.

ALSO you have to re-evaluate as you go. As I get closer to retirement, I know how much closer I am to what I need. For some they are playing catch-up, either from not starting soon enough or bad investments or life situations. FOr others, they see they are doing well and don't need to save as much due to their personal circumstances. I only advise--ALWAYS use conservative numbers, and plan for emergencies. From there, whatever you have will cover you or make your security or lifestyle better.
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Old 01-22-2015, 11:10 AM
 
Location: Near Manito
19,521 posts, read 20,910,960 times
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Quote:
Originally Posted by MrRational View Post
Exclusive of posh and international travel or extreme medical issues...
most retiring couples who own a house in good condition can get by on their SS income.

The distance between "getting by" and "being comfortable" will vary.
For some it will vary a lot.
This says it all. I remember Ben Stein saying that when you get old, premium cable and a bag of Cheetos ought to about do it for comfort...
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