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Post by sunnyd on Jul 3, 2019 16:04:29 GMT
Dh is turning 59 this year and retirement is on his mind. He is planning to continue working for many more years. We've done a bunch of online questionnaires to figure out how much money we need to retire and still don't know. How much in assets do you think someone needs to retire? House is paid off, live frugally, moderate cost of living location (Utah), no pension, need to buy health insurance until eligible for medicare. How much do you need to retire? TIA!
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Post by ntsf on Jul 3, 2019 16:08:51 GMT
you need to talk to a financial advisor.. it is too specific to your place and lifestyle to get a general answer. insurance for me is $25,000 a year.. because I am not on medicare and on cobra..
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Post by MichyM on Jul 3, 2019 16:14:50 GMT
You need to figure out what your monthly expenses will be after retirement. You need to figure out what your goals are during retirement. You need to take into account inflation. And like the PP said, if you cannot do this on your own, you need to put all your cards on the table with a financial planner so they can help you meet your goals.
There is no way any of us can answer this for you with the limited info given.
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Post by librarylady on Jul 3, 2019 16:24:23 GMT
As mentioned, so much depends upon each individual situation.
Our home and vehicles are paid for, we have a very substantial savings account for surprise expenses. We are able to live on our SS and retirement incomes each month. We live modestly, but do take big trips every 2-3 years.
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Post by sunnyd on Jul 3, 2019 16:26:41 GMT
How much in assets do you think someone needs to retire? How much do you need to retire? Thanks! I meant it as more of a general question. Adding that personal info sounds like I was asking how much I need to retire. I know everyone's situation is different. Just wondering what the general consensus is of how much you think someone needs to retire or how much you need to retire. Everyone's answer is different.
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Post by busy on Jul 3, 2019 16:31:56 GMT
In general, a lot more than people think. Without guidance from financial professionals, I think many people grossly underestimate their healthcare costs in retirement. And they think they'll live frugally, but most people also want to travel, etc. more once they're no longer tied down by work. And the cost of living continues to increase.
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Deleted
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Post by Deleted on Jul 3, 2019 16:34:01 GMT
A recent article that I read said that financial advisers were revising the previous recommendation of $1,000,000 to $1,500,000 for early retirement at 55. That is of course just a general estimate since no one can know someone's cost of living, expenses, etc.
Their recommendation was that if you didn't have that amount, you could either put off retirement by a few years or find a way to decrease your monthly expenses.
Again that was just a generalized recommendation (with a lot of other details and figures thrown in as far as life expectancy etc).
ETA . . . I am not sure where I read it but I think it might have been in Real Simple or some other similar magazine with the article title of *how to retire early*
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Post by chitchatgirl on Jul 3, 2019 16:46:37 GMT
My goal is to replace 90-100% of my current income in retirement and assuming I live to 95 (avg age in our family) I figure between travel and medical costs eating it up, it should be just about right for me. Oh I also don’t count social security in my calculations. It’s just not stable enough to me.
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Post by ladytrisha on Jul 3, 2019 19:03:32 GMT
My parents didn't have enough but made it work until my Dad passed away because my Dad had a little side business proofreading. After he passed, if my Mom hadn't met her boyfriend/companion, then she would have been living with one of us. She's supposed to be getting married this summer - but their attorney is really SLOW on the pre-nup (hello, they're 80, you'd think he'd speed it up a bit!). She will get his military pension and health benefits after marrying him so that brings peace of mind. Then she will call me weekly and remind me we're supposed to be moving to Texas!
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Post by christine58 on Jul 3, 2019 19:10:53 GMT
Thanks! I meant it as more of a general question. Adding that personal info sounds like I was asking how much I need to retire. I know everyone's situation is different. Just wondering what the general consensus is of how much you think someone needs to retire or how much you need to retire. Everyone's answer is different. Wish I could answer you but I have a great retirement through NYS teachers. But I also have a 403(b). I would see a financial person.
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Post by lisae on Jul 3, 2019 19:15:33 GMT
Be sure to check on the cost of medical insurance. I'm guessing this will be by far your greatest single expense. I don't know what the prices would be in Utah. I'm in my mid-50's and my medical insurance is approaching $10,000 per year for high deductible plan that doesn't pay anything until you meet the deductible. When DH turned 60 back before the ACA, his insurance shot way up so be sure to ask what the price is for a man age 60-64. Build in enough money to meet those deductibles just in case.
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Post by SweetieBugs on Jul 3, 2019 20:13:44 GMT
As mentioned, so much depends upon each individual situation. Our home and vehicles are paid for, we have a very substantial savings account for surprise expenses. We are able to live on our SS and retirement incomes each month. We live modestly, but do take big trips every 2-3 years. You mention "substantial savings" account and I'm wondering if I am on the same page as you are (we too have what I would call a "substantial savings" account but I've never really had anything to compare it to)?? Would you say your savings account is equal to one or both of your previous annual incomes or xx number of months of your actual expenses?? Ours was equal to my DH's income (I was making about 40% more than him before I early retired).
We have been putting 2 kids through the UC college system so a portion of our money has gone to that the past 5 years but we were at around 20 months of actual expenditures (this includes extras like eating out, travel and new tires/replacing computers, etc. or other occasional large but infrequent expenses)? Now we are at about 16 months. I've been off work for the past 1 1/2 years so it's been mostly a drain, however, I may be returning to my previous job so our household income will double back to what it was before.
It's really hard to know how much is enough without looking at all the details. For us, we have lots of home repairs and improvements we either HAVE to do or want to do so we have to factor that in first before we consider anything else. I'm thinking of setting up a 2nd savings account and putting in that the home repair/improvement funds so it is separate. I think the biggest unknown is how much the government (Social Security) is really going to be there when we are ready for it.
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Post by sawwhet on Jul 3, 2019 20:17:17 GMT
you need to talk to a financial advisor.. it is too specific to your place and lifestyle to get a general answer. insurance for me is $25,000 a year.. because I am not on medicare and on cobra.. Is that amount for you or your whole family?
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pinklady
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Post by pinklady on Jul 3, 2019 20:19:58 GMT
A financial advisor said if mortgage is paid off, we should figure we need about $4000 a month in retirement. Wow, that’s a pretty big monthly expense for a retired non-working person with no mortgage .
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Post by papersilly on Jul 3, 2019 20:35:31 GMT
depending on what state you live in, i would say at least $1,000,000 in assets/accounts.
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Post by stampinchick on Jul 3, 2019 20:40:42 GMT
You need to talk to a financial advisor. But I will warn you, before you have your eye on spending your savings on travel, make sure you have enough additional money saved for you and/or your husband to be in nursing care for an extended period of time if you need it. My parents saved money and lived simple. They thought they had saved enough money for retirement. They didn't travel after retirement. Then my dad got Alzheimer's. It became too much for my mom to handle his care so he was moved to an entry level memory care unit that cost $240 per day. After 6 months his dementia really progressed so he was moved to skilled nursing memory care. Cost is over $460 per day. There are people in his unit that have been there for years. At the current rate, we'll spend over $168,000 per year for his care. His medications are expensive and he used to be able to get them for free from the VA, but now that he is in this unit they require that he get his meds prepackaged by a local pharmacy and it's costing us over $3000 a month for just his meds.
At current rates, if dad would live for 5 years in his unit, it would cost us close to $1,000,000. That doesn't include mom's rent for an apartment at the retirement community or any nursing care she may need in the future. And this is at one of the lower cost retirement communities in our area. They are a non-profit so if they run out of money they will be able to get help from their benevolent fund and possibly some from the state. If they were in a for-profit facility, it's possible they could be forced to move.
Bottom line, retirement is a heck of a lot more expensive than what anybody thinks it will be.
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Post by 950nancy on Jul 3, 2019 20:41:10 GMT
Thankfully we have a good pension. I couldn't imagine how much it would cost.
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Post by scrapperal on Jul 3, 2019 20:42:18 GMT
A financial advisor said if mortgage is paid off, we should figure we need about $4000 a month in retirement. Wow, that’s a pretty big monthly expense for a retired non-working person with no mortgage . Maybe $4000/month is an average? At the beginning of retirement, you'd be spending money on eating out and travel, but in later years, you'd be spending money on services. Assisted living would be in that range, or more if more services are needed. That doesn't include medicine, medical copays, transportation, personal expenses.
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Post by tentoes on Jul 3, 2019 20:51:29 GMT
At current rates, if dad would live for 5 years in his unit, it would cost us close to $1,000,000. That doesn't include mom's rent for an apartment at the retirement community or any nursing care she may need in the future. And this is at one of the lower cost retirement communities in our area. They are a non-profit so if they run out of money they will be able to get help from their benevolent fund and possibly some from the state. If they were in a for-profit facility, it's possible they could be forced to move. Bottom line, retirement is a heck of a lot more expensive than what anybody thinks it will be.
This for sure. I recently attended a seminar at a place that helps people set up family trusts. We were told that 85% of people that live to 80 spend time in long term care facilities, and expect it will cost a LOT. They estimated the current cost per month, but I don't remember what it was. Good luck! I hope it works out for you.
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Post by stampinchick on Jul 3, 2019 20:55:03 GMT
A financial advisor said if mortgage is paid off, we should figure we need about $4000 a month in retirement. Wow, that’s a pretty big monthly expense for a retired non-working person with no mortgage . My mortgage is paid off. I'm not retired but I've been unemployed for the past 5 months so I've become much more aware of how much money I need each month. Between health insurance costs, car insurance, home owner's insurance, property taxes, car repairs and maintenance, home repairs and maintenance, food, utilities, that $4000 is not too high.
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Post by MichyM on Jul 3, 2019 21:13:27 GMT
Wow, that’s a pretty big monthly expense for a retired non-working person with no mortgage . Maybe $4000/month is an average? At the beginning of retirement, you'd be spending money on eating out and travel, but in later years, you'd be spending money on services. Assisted living would be in that range, or more if more services are needed. That doesn't include medicine, medical copays, transportation, personal expenses.
Posts like these why people need a good handle on their finances and/or have a good financial advisor. $4K a month won’t cut it for me, and I have no mortgage (but high HOA dues and ridiculously high property taxes), car payments or debt. I retired at age 49, less than 10 years ago. Plus, if someone needs long term care, you can expect to pay double this per person. My MIL had Alzheimer’s and was in assisted living for the last 10 years of her life. Towards the end we paid $7k a month for that, PLUS medical care, clothing, and the like.
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Post by utmr on Jul 3, 2019 21:15:14 GMT
Figure out what your annual expenses will be. Including medical insurance and deductibles, property taxes and upkeep, property and vehicle insurance, utilities, travel, etc, plus a contingency for what you forget. Less any guaranteed payment, pension, social security, etc.
Assuming a safe withdrawal rate is 4%, divide that annual number by 0.04. To be conservative, add a contingency to your annual number and divide by 0.02.
If you need 100K a year for expenses, then gross that up for taxes, so 100/(1-tax rate). Assuming 25% tax rate means you need 100K/0.75 = 133K per year. At a 4% withdrawal rate you need 133K/0.04 = 3.3M. If you want to be conservative and assume 2% withdrawal you need 133K/0.02=6.7M.
That will give you a rough idea, but you really need professional advice for your exact situation.
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scrappinghappy
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Post by scrappinghappy on Jul 3, 2019 21:36:58 GMT
In illinois with the way they keep finding different ways to tax you without actually taxing retirement income, I would say 2.5 to 3 million. we are now paying, as of Monday, $200 more per year in gas tax (20c per gallon tax hike), pay 15% more taxes on our cell phone services than the rest of the country on average and one of the highest property tax rates in the country and it all keeps going up. don't see how we will retire before age 65 if that
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Post by sawwhet on Jul 3, 2019 21:49:42 GMT
In illinois with the way they keep finding different ways to tax you without actually taxing retirement income, I would say 2.5 to 3 million. we are now paying, as of Monday, $200 more per year in gas tax (20c per gallon tax hike), pay 15% more taxes on our cell phone services than the rest of the country on average and one of the highest property tax rates in the country and it all keeps going up. don't see how we will retire before age 65 if that Honestly, I'd move somewhere cheaper to be able to retire and enjoy my life. Time is fleeting.
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Post by compeateropeator on Jul 3, 2019 21:52:26 GMT
I haven't read the responses yet so maybe this has already been said - I have read that you need 1,000,000. However I think it depends what you want to do, where you live, and a variety of other factors.
I have known people who have retired early on far less and have been comfortable. However the only way they have been able to achieve this is because that had great insurance for a reasonable amount for life.
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Post by Leone on Jul 3, 2019 22:57:01 GMT
Not having a mortgage is critical. The cost of health insurance is a huge consideration...really look into it. And don’t assume what you are quoted for the first year of health insurance is what it will be a few years from that...we experienced huge increases even without having made any claims. Moving to a state with low taxes can really make a difference. And will you be downsizing your home? That can help a lot too. Another money saver for us is we moved to a community where we were surprised to discover we could get by with just one car and a golf cart...that has been a big money saver.
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kelly8875
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Post by kelly8875 on Jul 3, 2019 23:32:39 GMT
There is no way a number can be thrown around as what you’ll need for retirement. People need to have a complete understanding of what their current living budget is. What are your expenses now, how much does it cost you to live now? If you don’t know your current budget, learn it. You should be the expert at your own finances. A financial planner will help you understand, but you have to know first. Just because you won’t have a mortgage doesn’t mean you don’t have bills. For a lot of people, half the “mortgage” payment is property taxes, and homeowners insurance. Those bills will still be there later, but you will pay them direct instead of your bank. Many people enjoy retirement by eating out, traveling, treating themselves, etc. That costs money, often more than your pre-retirement budget showed. Health insurance will cost more, taxes will cost more, gas, food, phone bills, tv/cable, vehicles, etc....it all costs more. I won’t live frugally in my retirement, and have been working on saving as much as I can now. I’ll be 44 next month, and am on a good track to getting it done. The kids are both out of high school, college funds got set up when they were babies, and I divorced the XDH that pent more than I did
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Post by Deleted on Jul 3, 2019 23:47:41 GMT
Well you will need what you are living on now , plus a million for medical.
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Post by 950nancy on Jul 3, 2019 23:49:06 GMT
Wow, that’s a pretty big monthly expense for a retired non-working person with no mortgage . Maybe $4000/month is an average? At the beginning of retirement, you'd be spending money on eating out and travel, but in later years, you'd be spending money on services. Assisted living would be in that range, or more if more services are needed. That doesn't include medicine, medical copays, transportation, personal expenses.
This seems about right to me.
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Post by 950nancy on Jul 3, 2019 23:50:07 GMT
Well you will need what you are living on now , plus a million for medical. Once we retired, our monthly expenses were less.
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