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Old 03-23-2016, 01:59 AM
 
6,353 posts, read 5,159,916 times
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I just spent $16 on a cheeseburger. My MBA and 35 years in the investment business didn't prepare me for that.

If you don't have a mortgage and no longer need to save out of your income, a 70% replacement ratio should be fine IF you have excellent health insurance and no sick parents, kids, or other dependents. Otherwise, the sky's the limit. Emergencies tend to come out of nowhere and accelerate as you get older.

Yes I said parents. My mom was 77 when she stopped having to take care of her father.
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Old 03-23-2016, 08:03 AM
 
1,980 posts, read 1,307,003 times
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Quote:
Originally Posted by reneeh63 View Post
OP - you're smart to be planning now and putting away so much money. However, life happens and you may not be at the same job in 10 years or you may be divorced, have (more) kids, etc. Build in some flexibility. 25 years is a long time!

Also, I don't understand so many retiree's fear of taking any money out of their accounts. They want to live off dividends and interest. They've saved maybe a million plus dollars and even though MWR is often estimated as 4% a year to be safe, they won't even take 1% out of FEAR.

Think! If you are willing to seriously curtail your quality of life to save that much money and then you don't even spend (the bulk of it) after you are retired then I don't know what you're (that's a universal "you're") doing it all for. Think about what you want your retirement to be and what you are willing to give up for it when you're working to achieve that. Try to make it a balance.
I've always wondered this same thing. People have a million, and seem to want to die with a million and live off the interest. Makes no sense at all. Guess there is a fear of living to 100.
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Old 03-23-2016, 08:18 AM
 
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they better have a very low withdrawal rate to not touch principal . seems a shame to leave so much unspent .

in order to have the principal remain untouched you have to hold to a 2% draw inflation adjusted or less . drawing 4% inflation adjusted assumes principal can fall to zero by the 30th year if the sequence of gains and losses is poor .
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Old 03-23-2016, 11:15 PM
 
Location: On the road
5,942 posts, read 2,893,129 times
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Originally Posted by Larry Siegel View Post
If you don't have a mortgage and no longer need to save out of your income, a 70% replacement ratio should be fine IF you have excellent health insurance and no sick parents, kids, or other dependents.
No offense but I find the any advice given to everyone that a certain number (70% is commonly thrown about) is a good target for post-retirement income needs fairly worthless advice.

There are far too many variables.
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Old 03-24-2016, 03:38 AM
 
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i would never advise anyone based on what income was either . only off what expenses will be and the lifestyle you want .

i couldn't do much basing our retirement on just 70-80% of what our income was . many expenses like health insurance are soaring compared to what we paid while working .

the most costliest expense we now have next to healthcare and rent is time .
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Old 03-24-2016, 05:14 AM
 
Location: Mount Airy, Maryland
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Yeah I agree with that. But what drives me nuts is when people act as if $50,000/year in retirement is the same as a $50,000 salary. It's obviously not. That salary included tons of deductions including Social Security and 401(k) contributions. Taxes are generally higher on income too.
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Old 03-24-2016, 05:36 AM
 
29,782 posts, read 34,871,258 times
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Originally Posted by lieqiang View Post
No offense but I find the any advice given to everyone that a certain number (70% is commonly thrown about) is a good target for post-retirement income needs fairly worthless advice.

There are far too many variables.
It is usually somewhat difficult to do long term planning or probabilbly or really any planning without a target. That being said there are ongoing efforts to help the uncertain determine what is probably a safe/working target for them. Others are fortunate to have the reference base to craft their own targets/goals and create a plan on their own to reach it. Flying blind into retirement is oh well .........
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Old 03-24-2016, 05:37 AM
 
29,782 posts, read 34,871,258 times
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Quote:
Originally Posted by DaveinMtAiry View Post
Yeah I agree with that. But what drives me nuts is when people act as if $50,000/year in retirement is the same as a $50,000 salary. It's obviously not. That salary included tons of deductions including Social Security and 401(k) contributions. Taxes are generally higher on income too.
As MathJak notes for many costs related to benefits while working can soar when needing to be self provided in retirement.
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Old 03-24-2016, 06:09 AM
 
13,912 posts, read 7,405,593 times
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Quote:
Originally Posted by TuborgP View Post
It is usually somewhat difficult to do long term planning or probabilbly or really any planning without a target. That being said there are ongoing efforts to help the uncertain determine what is probably a safe/working target for them. Others are fortunate to have the reference base to craft their own targets/goals and create a plan on their own to reach it. Flying blind into retirement is oh well .........
It depends on when you start. In my case, the best I could do is add as much wealth as possible in my last 15 work years. My target has nothing to do with percent of income replacement. It's simply how much I can set aside per year until I retire without completely disrupting my life. I have a plan and I hope to execute it for the next 7 3/4 years. If life happens and I fall short, I replan. I'm going to have a roof over my head and I'm not going to starve if I quit working today but that is not the retiree lifestyle I desire.
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Old 03-24-2016, 06:20 AM
 
Location: Gilbert, AZ
3,182 posts, read 1,959,996 times
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Originally Posted by capitalhockey View Post
I am thinking that perhaps 60% income replacement will be comfortable for us in retirement. I keep reading 80% but we are generally frugal people (no luxury car or country club membership). We are happy with a simple life and a few nice things once in a while.
Only you can determine the number. The standard 80% advice is nearly worthless, in my opinion.

The big wildcards on the upside are (1) medical/dental, and (2) what will you be doing with your time and how much will it cost.

The obvious areas of savings have mostly been mentioned, I believe. The no car payment thing may be a bit optimistic, but of course this depends greatly on personal circumstances.
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