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I think that the key is to list out your expected expenses when you retire and come up with some buffer to make yourself comfortable. Also, depending on the age when you retire, you may be in retirement for a long time (it's fairly common to see people live into their 90s) so it's long enough that you will be hit by inflation. Also note that some expenses are not going to be hit by inflation (e.g. fixed rate home mortgage if you will have one).
There are some rule of thumb calculators that estimate based on your current income but I believe that those calculators assume that you will be living your current lifestyle when you retire. I believe that for most people, that rule of thumb does not apply because expenses will likely change drastically when retired.
For example, I have 2 big expenses / plans now that will definitely be different when I retire. 1) I own (mortgaged) a very large home/estate that is 7000 sq ft in living area on a 2 acre lot. I do the yard work myself which takes a lot of time and there is a lot of space here. I don't think I will be living in this home when I retire with just my wife. Landscaping is roughly $1k/month if I were to source it out which is what I would need to do in retirement but again, I probably won't live here so it won't matter. 2) I have 3 kids (2 are very young) and plan to pay for their college (at least a good portion of it). Depending on where they go to college, it can drastically affect my finances. The 2 youngest are age 0 and 2 so it's also hard to predict college tuition costs in 16 and 18 years.
But I plan to try to make it simple...buy a condo/townhouse/house outright with minimal upkeep needs, have college ready to pay via 529, and set up expenses for travel. Ballpark is that $1m won't be enough, $3m should be ok, and $5m would be more than comfortable.
in the 1990's 1 out of 4 retirees who moved out of state went to florida . today fewer and fewer retirees are moving far . florida now gets only 1 out 7 retirees .
That is very sweet, but I am guessing you've been blessed in that you don't have anyone in your family who is sick or disabled and dependent on you, and you only (no other options).
My number is around $5 million to be very comfortable, $3 million to be reasonably comfortable, while discharging the responsibilities that I've wound up with.
No you are correct that I do not have anyone sick or disabled depending on me. I do have a mother-in-law who is dependant on me. I have been lucky so far my wife and I are healthy but really? $5 million? I think I have earned maybe 2 million in my entire life if that and that number is on the high side and just over that with my wife's income added in. I will be lucky to have $1 mil in 401k money when I hang it up. Yet I am comfortable. Different strokes for different folks.
in the 1990's 1 out of 4 retirees who moved out of state went to florida . today fewer and fewer retirees are moving far . florida now gets only 1 out 7 retirees .
less than 2% even cross state lines anymore .
I am somewhat surprised it is that low but I currently live in an area that has a large transplant population and a lot of them move back where to their roots on retirement. And the flip side of that is that I know of a few (including my late MIL) that move here from other states on retirement to be near adult children and grandchildren. OTOH, I know a couple of people who were convinced they would be moving and then didn't (I could end up being in that group). I would have guessed more like 15%. I would have been wrong...
the last census is all we have to go by so in 2010, just 1.6 percent of retirees between age 55 and 65 moved across state lines, according to an analysis of U.S. Census Bureau data by Richard Johnson, director of retirement policy research at The Urban Institute.
the last census is all we have to go by so in 2010, just 1.6 percent of retirees between age 55 and 65 moved across state lines, according to an analysis of U.S. Census Bureau data by Richard Johnson, director of retirement policy research at The Urban Institute.
math what would be interesting to know is if that 2% of the retirees move across state lines has held for years or if it has changed. I am betting that it has been low like that. Several factors come to mind. One is money. A good portion of that would be because they didn't ever plan and have not got the resources for such a move. Two I will guess that 2% would not include snowbirders. Other reasons would be to stay closer to family and friends.
the last census is all we have to go by so in 2010, just 1.6 percent of retirees between age 55 and 65 moved across state lines, according to an analysis of U.S. Census Bureau data by Richard Johnson, director of retirement policy research at The Urban Institute.
The age banding might be part of it; I would expect the 65-70 age group to have the highest % of movement. Again, I could be wrong and I still would not expect that to pull that 2% past 10% or anything. I think a lot of it is I tend to think like everyone is in our shoes. The median SS income, savings and equity make the expense of a long move a hard choice. There are a lot of "can't afford to move to where I could afford to live" stories out there.
Why the assumption that we are "supposed" to move?
I am not surprised that a relatively small percentage of people move after retiring. There is a reason why most of us live where we live during our working lives - it's because we have chosen that place as a place we want to be. Sure, I am aware that some people end up in places they don't like for job reasons. And I am aware that some need to move for cost of living reasons. And I can understand that people can get tired of dealing with ice and snow after decades of doing so. Also, I get the draw of being near grandchildren once retirement offers the total freedom to move anywhere we want to.
But still, I come back to my main point, namely that living in a place we want to live should be considered the norm, not the exception, so why leave that place?
I am not surprised that a relatively small percentage of people move after retiring. There is a reason why most of us live where we live during our working lives - it's because we have chosen that place as a place we want to be. Sure, I am aware that some people end up in places they don't like for job reasons. And I am aware that some need to move for cost of living reasons. And I can understand that people can get tired of dealing with ice and snow after decades of doing so. Also, I get the draw of being near grandchildren once retirement offers the total freedom to move anywhere we want to.
But still, I come back to my main point, namely that living in a place we want to live should be considered the norm, not the exception, so why leave that place?
Because "should be" and "is" are often two different things. We chose to live where we are about 25 years ago because of our priorities at that time. All of our kids were brought home to the house we are in. Assuming everything goes well the next couple of years, the last one will leave that house. To some degree it will have served its purpose. We live in a nice neighborhood, but for whatever reason few residents stay long term. So I don't feel a strong sense of community. The closest friends I have made here are no longer here. The kids are likely to end up spread out and not here.
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Why the assumption that we are "supposed" to move?
