U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-21-2015, 11:56 AM
 
Location: DFW/Texas
766 posts, read 695,423 times
Reputation: 2504

Advertisements

My husband and I have heard for years that a person should have at least 8-12 times the amount of their last salary in the bank when he/she retires. We have 10% of my husband's salary going into his 401K every week and his company contributes 6% and by our calculations we'll have plenty of money in the bank if we keep on the path that we're going on- we have 30+ years to go. This is not including whatever money I'm going to earn and contribute when I get back into the workforce outside of the home (I'm a stay-at-home mom now) so I'll hopefully also have a decent retirement option when the time comes.

Our biggest goal is to buy a house (been trying for almost 3 years now, it's been a nightmare) and have it paid off when we retire. My husband is adamant about that and keeps telling me that having a mortgage hanging over one's head when retirement comes about will drain an account fast. We just want to be smart and plan accordingly and be prepared for any surprises or life-changing events.

My husband has also been talking to his father about his (FIL's) retirement and my husband is astonished by how little he has in his 401K. Granted, my FIL has turned over half of his 401K to my MIL, as they're getting divorced, but given what he has in the account and what he has in liquid cash it's a lot less than what we expected, especially since my FIL is slated for retirement in 5 years or less.

He told my husband that he has 200K in the 401K, 100K in liquid cash (from an inheritance) and he owns 2 homes with my MIL, both worth about 450-500K, with one that has an 80K note left on it. From what we've heard, both homes are looking to be sold and the remaining mortgage is going to be split between them and paid off. My FIL also owns half of his father's house, which is worth about 600K, but that isn't going to be sold anytime soon.

We're concerned that he isn't prepared very well and is going to rely solely upon the sale of the homes as his "retirement". He's also been talking about buying a vacation home now and making that his retirement home when the time comes- he's been showing us homes he's seen that are going for 200K+. I told my husband that it concerns me that he'll run out of money and we'll have to be the ones to support him, as my SIL and her husband don't have any money saved for retirement at all so they won't be able to contribute.

So, how much should one realistically have when he/she retires and live comfortably? Should we be aggressive in our approach or more cautious and steady? And what the heck should we tell my FIL, if anything at all?
Reply With Quote Quick reply to this message

 
Old 01-21-2015, 12:27 PM
 
71,683 posts, read 71,801,099 times
Reputation: 49257
how long is a rope? no one can answer that for you.

folks make do on whatever they have from just social security to a million plus.

it does not mean you will like that life or want that lifestyle but you would mold your life to fit.

people adapt and location , needs and wants differ for all of us.
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 12:41 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
29,825 posts, read 54,503,450 times
Reputation: 31124
For people with a pension plus social security and either paid off or nearly paid off home, it's possible to get by with no savings at all. The big unknown to live off of savings alone is how long you will live after retirement, and how much the cost of living will go up during that time. Since no pension nor even social security is guaranteed, people under 60 now should be working on all possible methods of retirement savings/income. We have about 6-8 years to go and will have two pensions and SS, but also a 401k, and $400k equity in the house. I still expect to have to move to a smaller home in a lower cost area to survive, and as taxes and other costs go up or we last long enough to need assisted living, even with our long term care insurance it could get difficult. While our parents have managed on social security alone, I wouldn't expect that to work for people retiring now or into the future even if they get the maximum benefit.
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 12:54 PM
 
Location: Florida -
8,767 posts, read 10,851,233 times
Reputation: 16640
Roughly, it sounds like your FIL still has about $1M in convertible assets, in spite of divorce and asset split. Plus he has another 5-years to prepare. Assuming he will also qualify for SS and Medicare, he is in much better shape than most folks ... but, also not as well-off as some.

Since you consider this 'ill prepared', how much do you believe he should have or that you will need? -- Frankly, as I stated in another post, much of the 'huge number hype' is being promoted by financial consultants with products to sell. Asking them 'How much is enough to retire comfortably' is like asking a shoe salesman if they think you need any more shoes!
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 12:55 PM
 
2,429 posts, read 3,226,304 times
Reputation: 3330
Quote:
My husband and I have heard for years that a person should have at least 8-12 times the amount of their last salary in the bank when he/she retires. We have 10% of my husband's salary going into his 401K every week and his company contributes 6% and by our calculations we'll have plenty of money in the bank if we keep on the path that we're going on- we have 30+ years to go. This is not including whatever money I'm going to earn and contribute when I get back into the workforce outside of the home (I'm a stay-at-home mom now) so I'll hopefully also have a decent retirement option when the time comes.
As my dear Mathjack says.....no one can answer that for YOU. YOU need to run YOU numbers...income, investments, expenses, cost of living, lifestyle, etc.

Quote:
Our biggest goal is to buy a house (been trying for almost 3 years now, it's been a nightmare) and have it paid off when we retire. My husband is adamant about that and keeps telling me that having a mortgage hanging over one's head when retirement comes about will drain an account fast. We just want to be smart and plan accordingly and be prepared for any surprises or life-changing events.
"Affording" a mortgage or anything else...depends on the money available and what other expenses there are. How much 'emergency money" or "rainy day fund" one needs also depends on one's expenses, and how "prepared" a person thinks s/he needs to be for "possible" life-changing events.....which of course may or may not ever happen.

Quote:
My husband has also been talking to his father about his (FIL's) retirement and my husband is astonished by how little he has in his 401K. Granted, my FIL has turned over half of his 401K to my MIL, as they're getting divorced, but given what he has in the account and what he has in liquid cash it's a lot less than what we expected, especially since my FIL is slated for retirement in 5 years or less.
Your FIL's situation COULD be dire then again it may not be. You have to run various scenarios...that's part of the planning process.

Quote:
He told my husband that he has 200K in the 401K, 100K in liquid cash (from an inheritance) and he owns 2 homes with my MIL, both worth about 450-500K, with one that has an 80K note left on it. From what we've heard, both homes are looking to be sold and the remaining mortgage is going to be split between them and paid off. My FIL also owns half of his father's house, which is worth about 600K, but that isn't going to be sold anytime soon.
Again -- figuring this all out is part of the planning process.

Quote:
We're concerned that he isn't prepared very well and is going to rely solely upon the sale of the homes as his "retirement". He's also been talking about buying a vacation home now and making that his retirement home when the time comes- he's been showing us homes he's seen that are going for 200K+. I told my husband that it concerns me that he'll run out of money and we'll have to be the ones to support him, as my SIL and her husband don't have any money saved for retirement at all so they won't be able to contribute.
You have too many unknowns AND haven't gotten all the info you need. Unknowns are fine, but at some point you have to workout various scenarios WITH NUMBERS!

Quote:
So, how much should one realistically have when he/she retires and live comfortably? Should we be aggressive in our approach or more cautious and steady? And what the heck should we tell my FIL, if anything at all?
That depends......Some of your concern might either -- be valid -- or be unwarranted....but guess what? You won't have a better grasp of that until.....you nail down some NUMBERS!
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 01:40 PM
 
Location: Idaho
4,629 posts, read 4,473,076 times
Reputation: 9060
Quote:
Originally Posted by Berrie143 View Post
...He told my husband that he has 200K in the 401K, 100K in liquid cash (from an inheritance) and he owns 2 homes with my MIL, both worth about 450-500K, with one that has an 80K note left on it...
I actually think your father-in-law is well prepared for retirement. Much better than most. Of course, it depends on his standard of living and if he will get some help from social security. If he spends lavishly, goes out to dinner often, and takes frequent trips/vacations overseas, buys a new car every other year...then things might be tight for him. If he has a "normal" standard of living, he will be fine.
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 01:49 PM
 
Location: Tennessee
23,603 posts, read 17,589,896 times
Reputation: 27682
What is his cut out of the homes' equity?
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 02:17 PM
 
Location: SW MO
23,605 posts, read 31,497,588 times
Reputation: 29076
Quote:
Originally Posted by Berrie143 View Post
Our biggest goal is to buy a house (been trying for almost 3 years now, it's been a nightmare) and have it paid off when we retire. My husband is adamant about that and keeps telling me that having a mortgage hanging over one's head when retirement comes about will drain an account fast. We just want to be smart and plan accordingly and be prepared for any surprises or life-changing events.
This really depends upon what one considers "hanging over one's head." We took out a 30-year mortgage when we retired and moved to a new state. Our monthly cost including taxes and insurance is 12.2% of our monthly net income; 9.2% of our monthly gross. We don't feel that it's hanging, or we are either.
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 02:24 PM
 
4,003 posts, read 3,224,645 times
Reputation: 13034
Sounds like FIL is going to be just fine. Im not sure how much exactly you think he will need? So now I wonder how much do you think YOU will need?
Reply With Quote Quick reply to this message
 
Old 01-21-2015, 02:31 PM
 
Location: The Triad (NC)
28,507 posts, read 62,217,072 times
Reputation: 32199
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.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top