So how much did you really need for retirement? (seniors, kids, taxable)
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This was an interesting twist in this thread. I REALLY don't discount the effects of luck in my life- both good and bad.
I was lucky to choose engineering as a field. I was lucky when I met my wife; she was in charge of building computer prototypes in the company I was consulting with. Later, I was unlucky to have chosen some of the worst startup companies to work with. But I was knowledgeable enough to know when to call it a day, shift gears and move to better pastures. I was lucky in that over my career, I earned enough that we have enough income to have a decent retirement. Luck was involved in our finding low cost land when we needed a place to retire. We really lucked out finding good people in the building industry. I was lucky to have retired before this pandemic. We were lucky when we put our house on the market at this time, and got an offer in 1 week. Then we were disheartened to not find a single place to buy or even rent near the land that we were doing construction on, so we ended up pulling our house off the market, and lived in our old house until the newer, smaller, house was complete. That turned out to be 'a smart move', haha! Nope...it was luck. We were lucky that the market for housing rapidly escalated just as we were needing to sell and move. It sold in 3 days for more than we had originally asked for. Yeah, we're experts at 'timing the market', lol!
I would love to think that my intelligence and careful planning had everything to do with this-but I would be kidding myself.
Sometimes, I think if I shoot myself in the foot and lose a toe, it will contain the very beginning of some unknown fatal disease...
Sorry, I don't have time at the moment to read more than your first sentence... but unless you drew the "engineering" choice out of hat, and they gave you some type of honorary college degree in engineering based exclusively on lottery, you were not "lucky you chose engineering". You obviously made an effort to become an engineer, and later made an effort working as an engineer. Looking at my sibling & sibling's spouse (who are engineers) and their professional satisfaction, I think I would have been far happier had I chosen engineering as well, however, that is not a matter of luck but my own decision which in retrospect was not the best I could have made - nobody to blame but myself (btw, I retired from a field that is better paid than engineering, but incomparably more stressful, and associated with overall not universally great career satisfaction. It is the career with the highest rate of suicide, higher than the military veterans).
Many seniors do struggle. I once worked at a pension fund for a major corporation. We would get letters from retirees begging for a COLA in their pensions. COLAs were ad hoc and at the discretion of management. The letters were heart breaking. The retirees (and there were many) said they had to eat dog food because they couldn't afford to buy meat. Inflation took a huge bite out of their pensions.
And very few of those retirees have your requisite "half a million in bank accounts". The median net worth of people over age 65 is approximately $260,000. That's net worth, not cash in the bank. It includes housing and all assets. So unless people monetize their homes, there's very little in the bank.
[https://www.federalreserve.gov/publi...les/scf20.pdf]
Hey , you are letting facts ruin her good story line
Both of my sons and spouses have had very successful careers. They have moved to be where there career paths could accelerate and took jobs with their next job in mind. Their employers knew that and wanted that mindset. One and his wife changed coasts to live on just for job advancement and then came back for more job options.
There is a lot of luck and timing in play there, too. The engineering field has been stable in some places for a long time, but not everywhere. Fresh out of college in Los Angeles with an EE, looking to land a high paying career, and got into Teledyne as an associate engineer. Things started going well, and I was rapidly learning the ropes of design. Then the defense industry started to tank. Teledyne, Northrup, Grumman, Raytheon, Lockheed Martin all started dumping engineers. I couldn't find work to save my life in LA, so moved to Colorado.
When the start of the Dot Com era began, there were literally thousands of companies with bad business plans hitting the streets. Because of this, Sun Microsystems, who made large servers, invested tens of millions of dollars in a new engineering complex near us in Boulder, CO. I was just starting to have a portfolio of successful SBUS interface card designs for the Sparc Workstations. This was a skill that was hinting at becoming a million dollar ticket. Sun had thousands of openings for electronics engineers at all levels; my expertise was now targeting the top of the pay tier. Since the complex (which was huge) wasn't finished, apps were taken and on hold until the campus was phased in. A year and a half later, it all collapsed. So many talented engineers were in the area, that when it went down, engineering was not quite as valuable as being a pizza delivery guy. They were in demand; engineers were not. The lesson?
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by mathjak107
There are lots of engineers and lawyers out there as well as other degreed jobs who didnt have the luck of landing a decent paying job .they end up working for less then they expected .
So while the degree was a choice , finding higher pay is not always a choice ..sometimes you end up getting in to a particular company in a way you never planned
and sometimes (not so rarely) and with poor luck... after 30+ yrs with a great investment portfolio and cushy retirement planned... an evil witch CEO can come in and totally upset one of the best companies in the world to work for
No more Pension
No more HC
No more Free WW retirement recreation sites, enough to have places to live if you travel a lot!. (Non-performing assets, gotta get those off the balance sheet)
Companies merge (get bought out)
Cash position erodes
300,000 high skilled high paid engineers axed.
Stock price goes from $119 to <$19 (Many people lose their retirement assets, some unprepared retirees become despondent and die)
Luck can work both ways, before, during, and after retirement.
Health? same...
Bad luck on HC / coverage / access / caregivers can again upset your best laid retirement plans.
and sometimes (not so rarely) and with poor luck... after 30+ yrs with a great investment portfolio and cushy retirement planned... an evil witch CEO can come in and totally upset one of the best companies in the world to work for
No more Pension
No more HC
No more Free WW retirement recreation sites, enough to have places to live if you travel a lot!. (Non-performing assets, gotta get those off the balance sheet)
Companies merge (get bought out)
Cash position erodes
300,000 high skilled high paid engineers axed.
Stock price goes from $119 to <$19 (Many people lose their retirement assets, some unprepared retirees become despondent and die)
Luck can work both ways, before, during, and after retirement.
Health? same...
Bad luck on HC / coverage / access / caregivers can again upset your best laid retirement plans.
We are seeing that with Westinghouse right now as more and more of their electrical supply division flee since they were bought out by someone in the industry .
We hired their branch manager …..
The first thing the owner of our company did is congratulate him for hitting the salary he did there ….then he told him welcome to reality , this is what I can offer you .
Needless to say he took the offer and I am training him now as that kind of money was available no where else .
I had a call from them myself a few years ago and they told me if I come in to talk I can write my own paycheck
There is a lot of luck and timing in play there, too. The engineering field has been stable in some places for a long time, but not everywhere. Fresh out of college in Los Angeles with an EE, looking to land a high paying career, and got into Teledyne as an associate engineer. Things started going well, and I was rapidly learning the ropes of design. Then the defense industry started to tank. Teledyne, Northrup, Grumman, Raytheon, Lockheed Martin all started dumping engineers. I couldn't find work to save my life in LA, so moved to Colorado.
When the start of the Dot Com era began, there were literally thousands of companies with bad business plans hitting the streets. Because of this, Sun Microsystems, who made large servers, invested tens of millions of dollars in a new engineering complex near us in Boulder, CO. I was just starting to have a portfolio of successful SBUS interface card designs for the Sparc Workstations. This was a skill that was hinting at becoming a million dollar ticket. Sun had thousands of openings for electronics engineers at all levels; my expertise was now targeting the top of the pay tier. Since the complex (which was huge) wasn't finished, apps were taken and on hold until the campus was phased in. A year and a half later, it all collapsed. So many talented engineers were in the area, that when it went down, engineering was not quite as valuable as being a pizza delivery guy. They were in demand; engineers were not. The lesson?
Skills don't matter when markets tank.
Don't put all your eggs into one basket and keep up with technology changes in a bleeding edge field.
Working in tech means you should be constantly "in school" else you become a dinosaur in your field.
Don't put all your eggs into one basket and keep up with technology changes in a bleeding edge field.
Working in tech means you should be constantly "in school" else you become a dinosaur in your field.
So true …I spent my life morphing and evolving in to other areas .
I started life back in the. 1970’s as an hvac tech ….that was a good ole boys club which was taught from father to son .
Then apex tech opened and the industry got saturated…. So I shifted to the complex temperature control systems the malls and theaters had .
Eventually I got tired of all the emergency calls at night and morphed in to selling refrigeration and ac systems ..morphed more in to the supply end and eventually became a motor control and vfd specialist.
Did that for decades as I designed custom control panels for the water treatment and sewage treatment plants.
All used my basic hvac knowledge.
Making money is about finding things to do others can’t or won’t do for themselves.
Not sure how we got this discussion here but it drifted
I am not yet retired, but quickly approaching. Self employed for many years. Having all my spending on QuickBooks for a long, long time, I know exactly what my spending is. Large percentages of my income go to: self employment taxes (FICA, etc.), retirement account contributions, and ongoing renovations and a mortgage for a second home I purchased 10 years ago. All of these expenses, including the mortgage, will be gone or non-applicable by the time I retire. So I am confident that the money I have accumulated through the years—by any of the usual rules of thumb for retirement spending (the 4% rule, variable spending withdrawals, 20x spending, etc.)—will be more than sufficient to fund the actual spending I will do during retirement. This is not at all equal to the total income I now make and have made for years.
I view my real estate (2 properties, lots of equity) as a fall back for my later years, should I, for example, need a large deposit for an assisted living situation. Not immediately liquid, but could be accessed.
I hope this all works out, but I guess I, like everyone else, will have to bounce with whatever comes my way. It does seem to me, however, that the key point is to know what your expenses actually are and not only what your income happens to be.
Getting back to the topic I can tell you how many retirees come up with what they need ..
Once we got close to retirement we added up all the non discretionary spending we could think of …those were things we would not want to stop doing like our gym , my drumming , my studio time , etc .
Let’s say that hypothetically was 50k …
We would double that figure so the other half of discretionary spending had lots of wiggle room .
That was food , gifts , hobbies , travel , eating out ,etc.
So if one comes up with 100k , they would subtract off ss , pension , rental income , alimony, annuity’s, etc .
Let’s say that is 60k .
So savings has to fill the gap of 40k .
To generate an initial 40k takes 1 million dollars
A quick check in firecalc shows 40% equities or higher has a very very high success rate ..on the other hand using fixed income will not cut it .it already failed to many times so more money is needed or the budget has to shrink
I am not yet retired, but quickly approaching. Self employed for many years. Having all my spending on QuickBooks for a long, long time, I know exactly what my spending is. Large percentages of my income go to: self employment taxes (FICA, etc.), retirement account contributions, and ongoing renovations and a mortgage for a second home I purchased 10 years ago. All of these expenses, including the mortgage, will be gone or non-applicable by the time I retire. So I am confident that the money I have accumulated through the years—by any of the usual rules of thumb for retirement spending (the 4% rule, variable spending withdrawals, 20x spending, etc.)—will be more than sufficient to fund the actual spending I will do during retirement. This is not at all equal to the total income I now make and have made for years.
I view my real estate (2 properties, lots of equity) as a fall back for my later years, should I, for example, need a large deposit for an assisted living situation. Not immediately liquid, but could be accessed.
I hope this all works out, but I guess I, like everyone else, will have to bounce with whatever comes my way. It does seem to me, however, that the key point is to know what your expenses actually are and not only what your income happens to be.
It is about both income and spending .
Cutting costs has a bottom after which no more costs can be cut …when expenses keep rising the difference between growing income and cutting costs become very apparent and so more income is needed ..it is not a one sided deal.
All those homes here we all bought in the 1970s were 35k …today taxes are 12-15k so a paid off mortgage adds little to affordability…in fact that mortgage amount that no longer exists won’t even cover utilities.
So both are important.
We are retired 6-1/2 years and despite spending down six figures a year we are higher in balance then the day we retired because markets were so good and sequences of returns couldn’t be better
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