How do people without millions manage to retire? (friend, single, raising)
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Her favorite saying is "Your Health is your Wealth" and the second one is "Keep Moving or you will Rust in place"[/quote]
I totally agree with her. I can tell a difference after a winter when I'm not outside as much and not moving as much. I may actually join a gym this winter (barf).
I never needed millions while I worked. Why would I need millions when I'm retired?
It doesn't matter how much money you save, hoping to leave it as an inheritance to others. You work your butt off all your life to save money. The government will take everything except $14,000 if and when you enter a nursing home and need government to pick up the tab (and most of us will). Government takes every bank account, stock, and money market account where there's money.
Stop worrying about money. There's never enough. Live and enjoy this short life we have on earth.
If you want to live independently, you will need millions. If you want to live off the government or pension, you won't need any thing. Bare in mind, the government (ssi) or pensions can dry up at any moment, too. Just as their are cheaper senior living facilities, but you'll probably just rot there. You can live on literally nothing as a senior in America, but you might not like your quality of care and you will not have independence.
Some people just live frugally by nature and don't need a million saved. Depending on their lifestyle some people have very little expenses outside of food, shelter, and taxes. They never or rarely travel, eat out, buy new clothes, have expensive hobbies. The biggest worry is medical expenses. I easily see how some can just live off on a few thousand in the bank.
They are the ones who are usually life poor. Little experiences in life, living the same routine year after year.
"Doing fine" is a matter of perspective. My folks had SS and a small pension worth about $500K and my SIL's large assortment of west Texas uncles and aunts have similar retirements. They led/lead a very dull boring life in small town America. The highlight of their day is going to the library to check out a couple of new books or a visit from a neighbor.
Redguard got an estimate of $3.2M needed for retirement from one calculator and I plugged in his numbers and got an estimate of about $3.7M to replace 75% of his current $80K salary. What happened to the 4% rule? Of course I used a Mutual of Omaha calculator and they are in the business of selling insurance and annuities. My guestimate of $1M was meant to be an attainable amount that would allow for a few luxuries and some travel assuming SS and a small pension. The guy is a PhD looking to have a comfortable retirement, not some hayseed with a minimum wage job.
Ridiculous..99 percent of Americans cant Come close to the numbers you are putting up. If you need expensive cars, winter houses..4 trips a year...SURE.
Yes..I know there are exceptions to the rule. There are ALWAYS exceptions to the rule. 90 percent of people dont make 90 ..50 percent of the ones that do wish they didn't. It is what it is.
Many of the people I know in their 60-70s are not in good health and/or wish they were dead. This is across different races and incomes.
I'll do a lot more in the car club when I don't have to work. I love socializing with car people.
They also visit nursing homes during the week. The cars bring back memories.
I've seen more than a few residents start to cry when they see a car they had, or their parent's car.
Sounds like me... have a many project cars waiting in the wings... hope I'm not so old when the time comes that it will not be possible.
My oldest is a 1905 Olds with at least one from every decade to present... sad part is not even the Model A Roadster has been on the road one time in the last two years.
Many of the people I know in their 60-70s are not in good health and/or wish they were dead. This is across different races and incomes.
Most of the people I know in their 60-70s have little expenses outside of food, shelter, taxes, and medications. It's a pretty simplistic lifestyle that does not need huge amounts of money. Again the biggest threat to their finances are unexpected health expenses, like dental work, chiro, medicines, wheel chairs, etc, etc,
I'm not making fun of seniors because one day most of my expenditures will most likely be health related.
Some of the retirement calculators are extremely conservative - assume social security will no longer be available, a real investment return of 2-3%, 35 or more years in retirement living to age 100. No wonder they calculate you need several million dollars to retire. I agree with the previous poster that social security is not going away although there may be some changes. Assuming you retire with your house paid off, some social security and public sector pension, and access to health insurance until Medicare age, $1M in investment savings is probably sufficient.
Even 1 million is going to be tough.
I certainly am planning on 3-4% growth of my investment accounts. I didn't start my career until age 29, in 2012. The investment climate today is not the good ol' late 20th century. Those days are over. I think 4% will be good and 3% will be acceptable. I'm much more bullish on real estate, which has skyrocketed for me lately.
If this election has taught me anything, it's the the worst case scenario can very well happen. I don't think social security will be there. They will screw over every young person in America so they can grandfather out the older people who are the ones who vote.
By my calculations, if I keep doing what I'm doing now and making increases every year, making the above assumptions, we should have around 750k when I turn 67. Can't do much better. If I try and force more frugality, it will end my marriage for sure. I've already kind of broken my wife's heart telling her we can't do the trips she wants, can't get the kind of house she wants, etc...
And of course we could have a job loss, health crisis or something that makes that all go to crap.
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