Do you really need a million dollars to retire? (financial advisor, divorced, spouse)
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I'm sure Suze Orman would disagree, but people don't need as much money as they think they do.
How do you figure this?
Most people need more money than they think they do when you crunch the numbers. Not very easy to retire on $2000 or $3000/ month unless you plan on living out your golden years sitting in your living room watching reruns of "Dallas".
Isn't retirement supposed to be a time where you're rewarding yourself for the 30+ years of hard work?
How do you figure this?
Most people need more money than they think they do when you crunch the numbers.
Nope.
Most people (like their 16yo grand daughter) are convinced that because they want what they want
to have it is therefore valid somehow and therefore an actual need in their life.
"like, gee grandpop why can't I have the convertible. It's so pretty!"?
Most people need more money than they think they do when you crunch the numbers. Not very easy to retire on $2000 or $3000/ month unless you plan on living out your golden years sitting in your living room watching reruns of "Dallas".
Isn't retirement supposed to be a time where you're rewarding yourself for the 30+ years of hard work?
Most months I spend less than 2k and I have never watched Dallas, let alone a rerun of it. I'm too busy with other pursuits.
Unfortunately this isn't true, I don't think many people will be able to afford to retire in the future. At least not at the normal retirement ave range between 55 and 65. I think retiring could be a dream for many Americans.
There may not be a choice for many. They most likely will not have a million dollars when they stop working.
the rules of thumb like 25 or 30x income are useless without all the questions I posted above taken into consideration.
how much you need to save will be based on many different parameters, none of which are an exact science.
I disagree about the rules of thumb being useless. For those early in their career, it's a good starting goal especially since you'll have no idea what you'll need 30 years down the road. I do agree that as you get closer to retiring, you need to refine your estimates by answering the questions.
As I've said, I started with the $1 million goal, based on the 25x. As I got closer, retirement income streams became clearer and our current expenses better reflect what it will be like in retirement. Over the years, the goal has been reduced. Without the refinements, I'd likely work past 67, trying to reach that $1 million goal.
Most people (like their 16yo grand daughter) are convinced that because they want what they want
to have it is therefore valid somehow and therefore an actual need in their life.
"like, gee grandpop why can't I have the convertible. It's so pretty!"?
Well isn't the point of retirement to be ABLE to do what you want? What's the point of retiring if you can't enjoy things that would have been impossible in your working years?
I think there's a difference between retiring from something (a job) and retiring to something (hobbies/travel/etc). By your train of thought...I could retire tomorrow at age 32 if I simply needed to provide for my necessities.
It is NOT a good idea in my estimation to speak in terms of a "couple" retiring. If you are like me, you have seen many a woman left virtually destitute because her husband died much sooner and in a sense took it all with him. The pension stopped because he failed to have an amount withdrawn from his pension check that would have meant his widow would draw at least part of his pension for the rest of her life. Older generations of women too often were left out of the financial picture by their husbands only to find out that the pot of gold was empty when they had to face reality. I realize times have changed with fewer marriages, more females in careers but I suspect there are far too many women who have no idea what they are facing if the "old man" checks out first and perhaps very early after retirement. I would suggest to any wife to know where she stands in the event she is left alone. Never mind the growing tendency of long term marriages to go into divorce again leaving a woman in dire financial straits. Often it seems the golden years are more like lead rather than gold or even silver.
$2000 month in living expenses seems to be on the very low end of what an average person could survive on.
This reminds me of the endless arguments in the Economics and Personal Finance Forums about what constitutes middle class, or upper middle class, or "getting by". People are talking past each other because a given dollar amount means different things in different cost-of-living locations. Living in New York City, Honolulu, or San Francisco (the three most expensive cities in the United States) is way different from living in Indianapolis or a host of other similar cities.
The sentence above suffers from vagueness. While I, too, am glad I have more than $2,000 per month to live on, you need to define what "survival" means to you, in various areas.
1. Housing Are granite counter-tops de rigeur? Are you the type to rip out perfectly good kitchen and bathrooms fixtures in order to have the latest "upgrades"? How many extra rooms do you need in addition to workshop space? Are two bathrooms enough for a married couple? Do you require a chi-chi neighborhood, or will a safe middle-class one do just fine?
2. Cars Is reliable transportation enough, or do you have a hang-up about impressing the neighbors? Do you require a BMW or similar? Or will a six-year-old Honda Civic fill the bill?
3. Travel This is far more than a yes/no issue. Let's assume that everyone does at least some traveling. In what style do you travel? Luxury hotels cost three or four times more than Motel 6. And on and on with various parameters, such as one fairly big trip a year, or several?
4. Hobbies This is a big one. Some hobbies, once you have the equipment, can be pursued pretty frugally, such as woodworking. Others, such a boating, can be done on different levels. If you like weekend sailing on a local lake in a small sailboat, that is pretty cheap. If you have a live-on sailboat with motor, the price of admission rises steeply. Or if you want or have a really fast and powerful speedboat, there are maintenance and insurance issues in addition to a substantial cost of admission. Other hobbies can be pursued locally with little or no cost: bridge, square dancing, etc.
I agree that $2,000 a month would require the lower end of everything I listed above. And I agree that it's a damn shame to just "survive" in retirement without something to be passionate about, something to really enjoy (beyond watching TV). But I disagree that BMW's and granite counter-tops are in any way a meaningful contribution to quality of life.
For these discussions to be meaningful, we have to define more specifically what we are talking about.
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Talking past each other - too much vagueness
