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Old 02-04-2017, 05:37 AM
 
Location: RVA
2,164 posts, read 1,265,106 times
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Quote:
Originally Posted by selhars View Post
I must have picked the wrong career, because my Soc. Sec and pension won't be more than I made while working. So such luck. Enough to live on and not be too worried about it? Sure. But more than my highest salary? Not even close.
Note the person you responded to did not say his SS & pension will be more than his highest salary. He said he will be taking home $700 more than when working. Huge difference. I take home 65% of my salary. The rest goes to taxes, healthcare, HSA, & 401k. And of that 65% take home, an additional 7% goes to after tax savings (Roth and savings). The P&I on my house which will be paid off at 65 is an additional 14%. So in essence, living exactly the way I am, minus savings and house payments, will only be 44% of my gross salary, at age 70.


My pension and age 70 predicted SS will be roughly 64% of my current salary, and I will pay far less taxes (state & federal) than I do now, about $13k less. So no matter how I slice it, though I will not have income at my current (and certainly not my ending salary in 3 years) my retirement take home is a comfortable excess of what we need to continue our current lifestyle, without saving for retirement anymore, since, of course, I will be retired and further "forced" savings are no longer required. The excess will be used for inflation, travel and to further reduce the draw from my after tax savings from 62 to 70 while I delay SS. My savings will be in excess of 3 times what I need to delay SS and support retirement during those 8 years.


The models all predict that after age 70, the remaining savings, though greatly reduced by paying for retirement while delaying filing, will remain unneeded for at least 10 years, with excess income (RMDs included) going back to savings, plus growth and compounding during that time. After about 10 years (my age 80, spouse at 85), assuming inflation of 3.5%, we will start using savings to supplement income, and by then it should be in excess (if I earn 2% above inflation) of what I started retirement at, at age 62.


Fairly safe bet, even if the savings has to be used for LTC, because of a large SS, which by age 80 will exceed my pension.


Naturally all assumptions are made based on current SS rules, tax rates, etc. By leaving a fairly large margin for error, I hope that any contingency will be covered. Ay more planning than that, and I feel I'm overthinking it, since that is way more planning than the vast majority do, and will be surviving on less.
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Old 02-04-2017, 11:46 AM
 
6,876 posts, read 7,273,507 times
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^^ OK I can see that.
I'm be doing some similar kinds of calculations now myself but for a different reason.
I'm taking a severance offer and moving to a paid off house, but still need a new job.

So I need to calculate…how much (to keep it simple) LESS I could make in the new scenario and still have the same "disposable money for saving and lifestyle" as when making 100K in DC with a mortgage, and paying for work parking, etc…

Of course this is also knowing that ANY lower salary will lower my eventual Soc Sec. -- yet I might be able to save more myself even with a lower salary, because my expenses MIGHT be waaaay lower.

It's like the reallocation of spending that happens in retirement, and what you were alluding to. A person may take in less, but NET could be more. S/he may spending less for work reasons, and not have a mortgage….YET travel a lot more, and that can cost more than the working and mortgage costs…..
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Old 02-04-2017, 11:57 AM
 
Location: R.I.
972 posts, read 603,846 times
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Quote:
Originally Posted by FeelinLow View Post
I have no savings, no retirement anything, lost all during the recession. I work a part-time job and just filed for early SS. We get by.
What are you worrying about? No offense meant, but how much money does a person really need to survive and be happy?
If I had a bunch of money, which I don't obviously, I'd be giving it away to help a lot of hungry people. That's MHO.
That is unfortunate that you lost your retirement savings during the recession. When my 49 year old husband died suddenly at the age of 49 in 2001 his income died with him. Managing all the expenses involved with owning our home which we both worked very hard to get without my husband's income as well a now having to self fund my own retirement no easy feat. For several years I grabbed every OT hour I could get as well did occasional part time work doing prison nursing which was not very enjoyable work just to keep my head above water. As my income began to rise life became a little easier and could say good bye to my prison nursing gig, but I still had to and still do watch where every dime goes. In a few days I will be turning the big "60" and plan to work until my FRA of 66.6 because my steams of retirement income at that age will give me a greater sense of financial security because I already know financially what it is like to go from a "we" to a "me", and this can financially devastate a surviving spouse especially in retirement when their opportunity to return to work is likely not an option.

Again, it is unfortunate what happened to you and now you have little opportunity to grow your retirement income. But, do understand many of those here who also have a spouse, in their efforts to grow their retirement incomes are doing so to primarily financially protect their spouses so if they should predecease them their spouses will have sufficient income so they do not become "hungry people".
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Old 02-06-2017, 04:53 AM
 
1,137 posts, read 569,507 times
Reputation: 4370
Quote:
Originally Posted by littlebebe View Post
I agree the numbers you input need to be accurate. In our situation I ran the retirement numbers through firecalc, Fidelity and Quicken to make sure our retirement dollars would get us through the estimated number of years in retirement.

Most people have no idea what their true expenses are and are usually unprepared at how much they spend annually. I set us up as a company in Quicken two years ago to track our budget and expenses. We are very conservative but I was shocked at our expenses. This allowed us a true picture of where our money went and where we needed to cut back before retirement. I suggest everyone do this years before retirement to prepare for a more seamless and less painful transition. Even if you use an excel spreadsheet or app.
This ^. It is so important to get this right. I too used Quicken to set budgets and to track yearly expenses before adding them into a spreadsheet to make sure I was not fooling myself ( or worse yet- DW...just has to purchase glue, beads, blowtorch, etc... ). Then, just to add misery to our retirement, padded all the expenses by $50 per month, and added a misc category of $200 month for expected 'unexpected' expenses. If a bill exceeded that, we could borrow from budgeted entertainment or travel expenses to cover the surprise, and delay to the next month for fun. If we have anything left over on a monthly basis, I could breath easier. Once I had 'the number', I delayed my retirement until later this year to make sure it meets all the base criteria with an acceptable cushion that won't make us worry about $. That amount varies per individual and retirement scenario.

Now that we have the 'perfect' plan, we can retire....which will probably mean throwing the plan in the can after a month...
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Old 02-06-2017, 05:02 AM
 
71,511 posts, read 71,694,121 times
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our whole plan now that we are actually retired is just setting spending limits each year so we don't exceed them . with all this time and a want list a mile long we can easily spend 2x our budget .

fidelity full view tracks every penny leaving automatically . not 1 penny leaves our hands with out being counted by full view since everything is linked .

we don't really care where the money went as much as we do the total spent through out the year .
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Old 02-06-2017, 05:12 AM
 
1,137 posts, read 569,507 times
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Quote:
Originally Posted by mathjak107 View Post
....with all this time and a want list a mile long we can easily spend 2x our budget .
Us too. We are anticipating this, and have plans to cut some of our travel destinations to shorter than we would really want.

Right now, we are limited to snowshoeing from our front door to the gate at the front of our property...
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Old 02-06-2017, 06:25 AM
 
Location: Los Angeles area
14,018 posts, read 17,729,443 times
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Quote:
Originally Posted by mathjak107 View Post
......................

We don't really care where the money went as much as we do the total spent through out the year .
That makes a lot of sense. However, if a person finds that the total spent throughout the year is too high and needs to be reduced, then where the money went is important for knowing where cuts are possible.
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Old 02-06-2017, 06:47 AM
 
71,511 posts, read 71,694,121 times
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that is correct , but generally for most of us our expenses are discretionary and non discretionary in nature .

so i think pretty much most of us know right off the top of our heads the things we do we can cut without knowing the actual numbers . if you are running to high there really is only a certain catagory of stuff that can be chopped and basically you take a little off each most of the time .

usually just knowing how far out of whack you are kind of guides you as to the cuts you need on the discretionary spending side . in fact the irony is the closer to the bone things are the less discretionary spending there is so there is a minimal amount of places you can even consider . there is not much to cut when everything is a need .

i never saw the need to know where every dollar went , even before being retired . we just needed a total and then would decide what discretionary stuff we do we have to cut out or reduce by the needed amount ..

Last edited by mathjak107; 02-06-2017 at 07:24 AM..
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Old 02-06-2017, 09:23 AM
 
4,718 posts, read 10,313,322 times
Reputation: 2298
Are you guys taking your yearly money out in a 1 lump sum for the entire year? Or do you with drawl quarter? Monthly, etc?
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Old 02-06-2017, 12:18 PM
 
71,511 posts, read 71,694,121 times
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it is all in our checking account by the last day in december . we just ladder some in cd's so we roll over about 8k a month
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