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So a 65 year old woman retires and puts the entire $2 million into an immediate annuity (with cash refund).
She gets $10,000 a month for life and her heirs get the balance when she dies.
That's $120K a year. How many people make that in their jobs never mind as retirement income ?
And I didn't even include SS.
I just plugged that into immediate annuities website.
Nah..you don't need to save up $2 million to retire.
This probably takes into account costs that accelerate in old age, like healthcare. If you're as healthy when you're 60-95 as you are today that $120k/year may seem like a lot but if, god forbid, you come down with a serious illness, that may not leave you a lot to leave your heirs. A family friend came down with severe alzheimer's in his 60's and had to live out the rest of his days in a round-the-clock facility. It cost him about $10k/month (granted it was the Boston area). You just never know. Heck.. a private nursing room apparently costs $90k/year on average apparently. And then you consider all the medication you might need, Medicare/insurance costs, medical procedures, etc. Source: How to Pay For Nursing Home Costs - US News
I always marvel at the numbers people say others need for retirement.
I don't buy into articles that say I'll need millions…never have…..
I've managed the finances for an elderly aunt and my mom (both dead for years now) -- and neither had anywhere near that much -- not even 200K. One had a pension an SS the other only had savings and SS. They DID both work until 80. One had a paid off house, the other a cheap apartment.
They were both depression babies…so all their lives squeezed a nickel until it hurt and didn't have any fancy lifestyle habits. They had that "little money" yet throughout their lives managed to travel -- just a couple of inexpensive trips a year.
While I'll have more than they did. I won't have even one million. Not even half that. I will have a pension. But I'm also a late stage baby-boomer still 9 years away from retirement. And while I am very concerned about what changes could be in store for Soc Sec and Medicare…..I'm just not going to fret about not having a million or two million dollars saved for retirement.
Other than travel I don't have any fancy lifestyle habits. I'll have what I have…and make do some how.
So a 65 year old woman retires and puts the entire $2 million into an immediate annuity (with cash refund).
She gets $10,000 a month for life and her heirs get the balance when she dies.
That's $120K a year. How many people make that in their jobs never mind as retirement income ?
And I didn't even include SS.
I just plugged that into immediate annuities website.
Nah..you don't need to save up $2 million to retire.
except location plays a big factor . 120k in nyc buys the same lifestyle in atlanta that 60k does . saying what is enough or not enough for others is ridiculous . in fact 69k income still qualify's a family for a nyc low income housing project
would anyone here ever think of telling someone how much they need to earn and what is to much while working ? of course not , it would be a foolish thing to say . so why do others tell folks what is enough or to much when it comes to retirement .
My first job out of nursing school in 1978 was working for State of R.I. at a nursing home for Veterans. Hired at the same time as I was an orderly and an LPN who eventually married. My hourly R.N. wage at that time was around $6.20 and the orderly and LPN's wage was around $2-$3 less than mine. After two years working at this facility I had an opportunity to work in a hospital which was always my goal and left my state job and future pension behind. The orderly and LPN stayed working at this facility for the next 30 years and both retired at age 54 in 2008. Since it is easy to do pension lookups for most state's retirees, not long ago I plugged in my former coworker's names into my state lookup to see what type of pension they were getting. Both these still married individuals are each receiving a pension of $51,000 a year as well as fully paid health insurance. Since we all paid into SS working for the state they will also receive this benefit and probably are now as they are both 62. So if these two individuals live to age 94 which is 40 years beyond their retirement, not counting SS or other money they saved for retirement, their combined pension income which is COLA adjusted will produce a retirement pre tax income of $4,080,000 +. Had I stayed employed with the state for 30 years like these two individuals I could have retired when they did at age 51 with a pension of around $61,000 a year.
I have no regrets about my decision to leave that state job. I may have lost a terrific pension and the opportunity to retire at age 51 with this decision, but what I received instead in the various places I have been employed over the last 38 years was making the most wonderful life long friends, numerous career experiences that greatly enhanced my skills and knowledge, meeting and marrying my late beloved husband through his sister who was my coworker, and working with a physician who pushed me to see my doctor who diagnosed me with an early stage cancer which could have taken my life had I not sought care when I did.
I guess I came full circle, as I have been back working with the Veterans at a Federal level since 2001 where I will end my nursing career in another 6 or so years. Yes, I will get a pension with my current work but it will not even be close to the one I could have had with the state.
Money is a wonderful tool and can most certainly enhance our lives and the lives of those we cherish. But, if making money, saving money, and growing money becomes the central focus of our lives we can very easily miss the opportunities that pass our way that could have delivered us the greatest of life's joys that no amount of money can buy.
Good posts. I agree that a slave to money is a waste of life. Most people that enjoy life "know" when its time to retire and finances are adequate if they have been active in staying solvent their whole lives. Personally I think articles like this are just more fodder for alarmist journalism to increse sales and hits. However, too many that point out that $2mil is excessive, still are not taking in to account this is for 30+ years from now retirees, and because of that, it basically has to be an alarmist piece because the future is so much more unstable and unpredictable today than it was 30 years ago, IMHO. I remember articles when I graduated from college in 1980 predicting needing a million dollars to retire and we laughed at that amount too. As it turns out, the income from million plus SS is a pretty comfortable number to tetire with today. Certainly not REQUIRED, but undeniably comfortable. It is great generic advice that translates to literally "Save as much as you can by living within your means".
I am about to turn 44. My fiance who is almost 62 brings home $1450 monthly. In retirement, he will bring home about $2200 monthly after taxes and health insurance for him. Our 3-year-old son is on Anthem (from his dad's work) and Medicaid. I am on the Healthy Indiana Plan (basically Medicaid in a fancy wrapper). We do not have cable or satellite, we have liability only on our two vehicles (which were paid for a long time ago), we agreed a long time ago for me to be a stay at home mom for a while as child care is way too expensive and we gross too much to qualify for child care vouchers. I buy our son's clothes at second hand clothes stores as well as my clothes. We do have internet and my fiance still has his same iPhone from 4 years ago. I have a lifeline phone which is a free government phone with 350 minutes and unlimited texts. We live in 1000 square foot apartment where we pay $600 a month and this is in the best part of town, so it helps at the cost of living up here is very low. We keep the thermostat at 68 degrees year-round. We eat out once a month. My plan is to dip my toes back in the workforce after my fiance retires meaning starting out with a part time job. I myself can make up to about $21,000 a year and still stay on the healthy Indiana plan... Plus our son can stay on Medicaid as long as we make $50,000 a year or under. One of these days if I do get a full time job, the reality is that all three of us will eventually have to be on Obamacare as my fiance will have to be come June or July but we will cross that bridge when we get to it. Despite living very modestly, we are very happy. I am living proof that not all young women are looking for a rich sugar daddy.
except location plays a big factor . 120k in nyc buys the same lifestyle in atlanta that 60k does . saying what is enough or not enough for others is ridiculous . in fact 69k income still qualify's a family for a nyc low income housing project
Barely 20% of Americans even earn $100K or more in their careers yet all retirees should have a $120K income in retirement ?
well I don't think any financially knowledgeable people would ever make such a ridiculous assumption as one size fits all . anyone who does lost all credibility in my book whether financial writer or advisor
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