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My wife and have have raised and educated our kids and it's just us and the cat now. I'm full retirement age and she's mid 50s. We have no debt, no property, and $250,000 in combined 401K, and other accounts. My SS income would be currently about $2000 a month (I'm still working at the moment).
My question is: where do we stand financially compared to most Americans? Better than average? Average? Charity cases?
If you are considering retirement I don't think you should be comparing how you compare financially to other Americans of retirement age, but instead whether you and your wife have enough net assets available to retire.
You haven't said anything about how much money you think you'll need in retirement so it's impossible to say whether you currently have enough. Some people can live (or get by) on a minimal amount of money, while others need many times as much. There are far too many variables between individual family needs.
To answer your original question, I'd say you are [sadly] probably pretty average. However, I'd also quickly add that you don't have near enough to sustain your retirement for very long unless you are extremely frugal and have far less than an average lifestyle.
Personally, I would not feel comfortable with even ten times the amount you mentioned (most all of it in tax deferred accounts), plus a house that is owned with no mortgage, and also no debt. But that's just me. Others may feel comfortable with a fraction of that, while others may need even more. So much depends on your lifestyle, what you are used to in terms of living standards, whether you want to decrease those standards or enhance those standards, whether your assets are in tax deferred accounts, major medical insurance coverage, life expectancy, cost of living where you retire, if you want to leave an inheritance, etc., etc., etc.
Thanks to all of you for your input. We are in Germany only because of a short term contract ending next summer. Staying here was never an option. We've looked into Colorado, N. Idaho, Penn, and Alabama so far. AL may have the edge right now.
I vote for CO!!!! Just really biased - the humidity of the South is a deal breaker for me. CO has communities that offer a lower cost of living. Once you land in US - remember - you can still use your skills to pick up jobs to supplement your cash flow.
My wife and have have raised and educated our kids and it's just us and the cat now. I'm full retirement age and she's mid 50s. We have no debt, no property, and $250,000 in combined 401K, and other accounts. My SS income would be currently about $2000 a month (I'm still working at the moment).
My question is: where do we stand financially compared to most Americans? Better than average? Average? Charity cases?
The following are my opinions only. They focus on your specific question of "where do we stand compared to most Americans?"
* You are unusual in that you have "no debt".
* You are also unusual in that approximately 50% of Americans have
some property.
* The $250K would not be enough for the "average" American to live on
solely. Drawing out 5% per year yields about $12,500 or a little over
$1050/month.
* You ahead of the "average" American on SS since the $2000/month is
at or near max. Many people have less than the max or no SS at all.
Obviously all the above is very general and must be individualized to your expectations and lifestyle. Subjectively, although you are not rolling in dough, you are better off than the "average" American (if there is one).
Since your biggest expense will be housing (Assuming you remain healthy),
I would find a place in a low cost rural area and try to barter rent for being a "caretaker". You can probably live quite comfortably if you work part-time to supplement your $3050/month. Good luck.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I vote for CO also, It actually is pretty low on total tax burden, and has a diverse economy and population.
for front range I like Loveland / Berthoud, very nice communities, affordable housing if you look very hard (also somewhat of a 'banana belt', sheltered from direct storms). Probably cheapest on front range would be Pueblo, tho for a good reason (pretty hot, dry, and barren)
For western CO, I would look at Grand Junction, as Glenwood Springs (1st choice) is pretty spendy now. (too close to Aspen / Vail)
Another option might be Lander or Powell, WY. Current energy boom has run up the values, but WY is very cyclical, and before long the prices will likely plummet, except for desirable areas (Sheridan, Cody, Jackson)
Health care and property taxes are the killers. My retirement expense spreadsheet also indicated that commute to medical and shopping from very rural (but cheap) locations can be draining on cash flows. Also poor real estate appreciation gains in those remote places can be a problem, IF you can even sell the place when you need to.... I am thinking 'renting' rural might be the cheapest, while your equity is working somewhere??? (usually that would be investment real estate for me, but I'm currently in cash, waiting for the right deal / cash flow) I have recently found a couple small mobile home parks ~ 15 sites for ~$400k. Cash flows are ~ $350/ site / month or $5000/month which would cover your debt (w/30% down) + give you $2,000/mo income and maybe a place to live (or you could maybe rent or buy a home nearby). Some of the parks are seniors, with double wide mobiles on foundations. Maintenance is minimal, and they likely won't be transient renters.
My wife and have have raised and educated our kids and it's just us and the cat now. I'm full retirement age and she's mid 50s. We have no debt, no property, and $250,000 in combined 401K, and other accounts. My SS income would be currently about $2000 a month (I'm still working at the moment).
My question is: where do we stand financially compared to most Americans? Better than average? Average? Charity cases?
I don't know how you stand compared to most Americans, but it seems like some posters are making you out to be near-paupers. DH and I were hoping to retire next year, and I would be happy if we were in your position; frankly, among the retirees I know, your situation looks ok.
So much depends on how you live or intend to live, and on where you live. DH and I don't need much, so we think we can get by with what we have and a couple of part-time jobs.
Bideshi, Alabama sounds good. They have some very nice pics if you check out that forum. The people seem friendly, etc. AND they have the beach nearby.
Honestly, I have no stats handy to prove it, but in reality, I find it hard to believe that you're near the bottom of the barrel. It all depends on how you want to crunch the numbers. If someone wants to count their half million dollar house (which is now worth half that much and has a 200,000 lien on it) as an asset of half a mill, they're sorely mistaken and that's exactly what some people are doing when they sit down and figure out their net worth. (I do a lot of reading)
As was mentioned before, you are very rare in having no debt. We are also debt-free which is truly a blessing. (Not rich here either, but doing ok)
Your income would be tax-free and that's a huge plus right there. What will you be doing for health insurance? Are you able to take it with you from your employer? I realize that if you are on Medicare, all you would need is a supplemental policy, but what about your wife? If you have the solution to that, it's a huge plus.
There would also be things you would be spending less money on once you're retired. If you move to a walkable community, you'd be able to get by with one vehicle. (Remember the olden days?) That would save on gas and insurance. Clothes~you will only need a limited wardrobe since you won't be working.
Another thought is~would your wife enjoy working part-time? Would you? There are still many places that are looking for middle aged workers and even though the wages are low, it doesn't take that many hours to bring home a few extra hundred per month.
If your wife is mid-50s, it wouldn't be many years before she would qualify to draw SS at 62.
A couple can live quite comfy in the area I live in on 3,050 per month. There are people here who live on less. There HAS to be warmer areas of the country that are the same way and Ala. may be that place. (Let me know how you turn out~I'm seeking warmth.)
Don't feel bummed. DH is early 60s and I'm early 50s and even though I couldn't give you an exact number yet, I doubt that we'll have any more then that down the road. And if the economy doesn't straighten up, it may be a lot less.
I appreciate all the input. In response to the post about not being comfortable with less than ten times our accumulated savings, I have to mention that figure represents about how much I have earned in total my entire working life (48 years). How could I possibly have accumulated that much?
You both could get part-time jobs. Your wife did she work, then at 62 she can get social security.
You also now, could get a great home for a cheap price, to avoid rent. Alabama, you could do fine.
what about oxford Miss. check-out the states, and tax bite also. the state of Tenn also has some pretty nice areas. Your s.s. is more than most.
however then medicare comes out, and you need another insurance for what medicare doesnot pay. Some companys even pay part-time people
for health insurance also.
Last edited by maggiekate; 10-01-2008 at 02:20 PM..
This is an article that someone posted in another thread in the Ret. forum.
If you scroll down to the part that talks about wealth, it says that the AVERAGE couple brings $42,500 per year to a community. I read that a few days ago and was thinking about you. (and my own situation)
Since that is the AVG. amount, it doesn't seem like you're low at all. We've got to keep in mind that there are a FEW retirees that bring a lot of wealth to a community which in turn will up the avg. a lot.
Good thoughts. The real fly in our ointment is health insurance. When I leave my job our health insurances leaves too. I am eligible for Medicare soon but my wife is not eligible for 15 more years even if we can find a doctor kind enough to accept new Medicare patients. Part time work is certainly an option if available (ie if the economy is still supporting such jobs...).
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as an asset of half a mill, they're sorely mistaken and that's exactly what some people are doing when they sit down and figure out their net worth. (I do a lot of reading)
