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When talking $2M, does that include value of your house?
only if you will liquidate it in some fashion so you can spend the money . until the time comes that you do it acts as a cost cutter and not income generator if you live in it .
Is this $2mil per individual so a couple would "need" $4mil? Makes no sense they would only present it this way - they are only talking individuals and we know the types who can save into retirement funds (especially millenials and up) aren't loners all the way to retirement.
The key to retirement is to not have any debt or large monthly payments (mortgages, cars, etc).
I think 2mm is way more than a person would need. If the average person lives 25 years during retirement, that would come to having 80,000 per year for retirement. Most people don't make that during their working years.
My goal is to have a paid off house, a paid off new car, no credit card or student loan debt, and a LTC policy when I retire. I am generously estimating my needs at $30k a year for 25 years (about 750k).
I've done the math...... if you have a paid off house in an area where taxes aren't horrible, no debt, and maybe a small car loan (or none)...... and wait till full retirement age for SS, then a person like me (middle class, $100K salary) can easily live with a bucket of $500,000.
If SS returns change by then, that could make a big difference though.
There are some big ifs there, but you get the point.
Really, I don't see what everyone is getting so excited about. If the generation who is retiring in 2016 was recommended to have $1,000,000 in savings for their retirements, and if inflation continues at a steady historical rate for the next 30 yrs, then a person starting a 30-yr career today would need to save $2,161,642.34 by the time they retire in 2046 to have the same value of their money.
Put another way, the cumulative inflation rate since a 2016 retiree started his career in 1986 was 116%.
This also reminds us that as we continue in our retirement, everything will slowly become more expensive simply due to inflation. All things being equal, if I was living on $40,000 a year 10 years ago, I may need $47,000 a year today to accomplish the same thing.
Although the book was published in 2008, it is still very current and it does an excellent job of describing the scope of the defined benefit pension problem.
Really, I don't see what everyone is getting so excited about. If the generation who is retiring in 2016 was recommended to have $1,000,000 in savings for their retirements, and if inflation continues at a steady historical rate for the next 30 yrs, then a person starting a 30-yr career today would need to save $2,161,642.34 by the time they retire in 2046 to have the same value of their money.
Put another way, the cumulative inflation rate since a 2016 retiree started his career in 1986 was 116%.
This also reminds us that as we continue in our retirement, everything will slowly become more expensive simply due to inflation. All things being equal, if I was living on $40,000 a year 10 years ago, I may need $47,000 a year today to accomplish the same thing.
If you're talking in terms of inflation adjusted dollars 20-30 years down the line, that's reasonable. Saying someone currently needs it is a bit much.
Although the book was published in 2008, it is still very current and it does an excellent job of describing the scope of the defined benefit pension problem.
The problem with defined benefit pensions is that employers did not adequately fund the pension plans and used the money for things like company restructuring, here's a decent article about it.
In the end taxpayers will be paying for the elimination of defined benefit pensions because as more people retire with social security as their only source of income they will be relying upon social services to survive.
two words of wisdom my dad drilled into me: Compound Interest
Was savings account interest .02% when dad told you that?
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