| User | Post |
|
6:34 pm
August 6, 2011
|
Melissa (Mom's Plans)
| | |
| Member | posts 908 | 
|
|
|
I know we Yakezie bloggers are in a variety of financial situations. Suze Orman always does a spot, "How Am I Doing" where her guests get graded for their current financial situation. So, I am curious, for a married couple 40 years of age, what do you think is a solid amount to have in retirement? Why? Looking forward to the discussion.
|
|
|
|
|
7:27 pm
August 6, 2011
|
Sustainable PF
| | |
| Member
| posts 2759 |
|
|
|
I'm 35 (36 next month) and Mrs. SPF is 26. This question is somewhat difficult to answer.
We
both work for the provincial government that has a Defined Benefits
Pension plan (which is great!) This pension forces us to pay about 9%
of our gross each and every pay cheque. Down the road we would receive
67% of our highest average salary (over 5 years).
But how do we
evaluate the pension and the fact we have a gap in our ages?
Additionally, our employer matches all employee contributions (but if we
leave the govt we lose that contribution).
I've seen different
formulas out there that show what you need @ 30, 40, 50 but I find I
(when I was single) and we as a couple never quite stack up. A DBP also
includes health benefits that would costs thousands annually, if not
monthly in the US. And we have universal health care too (which means
health care to a point – then you or your insurer pay).
I
discussed at length our situation on our site in June and July. Feel
free to check it out Melissa (and others). We'd love more discussion if
people have opinions!
Sustainable Personal Financial Plan – The Base
Sustainable Personal Financial Plan – The Future
|
|
|
|
|
6:45 am
August 7, 2011
|
Tony Chou @ Investorz' Blog
| | |
| Member | posts 643 |
|
|
|
For me, I plan on being totally financially independant when I'm 40. So I think that should be around $40 million. $20 million for cash generating bonds that I'll live on, and the other $20 million for starting other businesses.
|
|
|
|
|
7:18 am
August 7, 2011
|
NoDebtMBA
| | |
| Member | posts 130 |
|
|
|
You'd probably want to have at least half of what you'd need for retirement as a very rough rule of thumb since you'd be about halfway through your working years. I'm doubtful that it would be the norm though.
|
|
|
|
|
11:03 am
August 7, 2011
|
The Passive Income Earner
| | |
| Member | posts 152 |
|
|
|
The simple math is a 3% or 4% withdrawal rate for all the years to come after you retire. If you were to retire at 40 and needed 50K income to live from than you at least need 1.666 M$. That would let you live for 33 years and it doesn't take into account the cost of inflation. That would bring you at 73 years old which is not old these days.
Math aside, it's based on how you set yourself up and where the income to live from comes.
I am hoping to be financially independent at the age of 45 which means I don't have debt and I can change career path or anything without being tied down. Retirement on the other end is probably closer to 55 and depending on my investment income (real estate, bonds, dividends, …)
To answer your question now. If you assume you want to retire at 60, using the rules above, you should be above the 500K$ mark at least (not including principal residence equity). The other question relates to your saving capabilities, before 40, saving ability tend to be lower than in the 40s. Hopefully, your savings accelerate.
|
|
|
|
|
7:21 am
August 8, 2011
|
MoneyIsTheRoot
| | |
| Member
| posts 1456 |
|
|
|
This is a loaded question. Im not sure how much I would need, I suppose it would depend on my lifestyle at that point. I would need my house paid off, and then $3-4 million in retirement accounts, assuming I was retiring at 40. Even then I find it would be a stretch considering the rising costs of healthcare.
|
|
|
|
|
1:47 pm
August 9, 2011
|
Brave New Life
| | |
| Member | posts 41 |
|
|
|
It depends on your goal. If you're hoping to retire, then you're going to want 400x your average monthly expenditure. This gives you a 3% safe withdrawal rate which should last forever (see firecalc.com). So if you spend $5K/month, then you need $2M.
The 400x comes from dividing by 3%, and multiplying by 12 months.
|
|
|
|
|
6:20 pm
August 9, 2011
|
OneCentAtatime
| | Florida, USA | |
| Member
| posts 1778 |
|
|
|
Brave New Life said:
It depends on your goal. If you're hoping to retire, then you're going to want 400x your average monthly expenditure. This gives you a 3% safe withdrawal rate which should last forever (see firecalc.com). So if you spend $5K/month, then you need $2M.
The 400x comes from dividing by 3%, and multiplying by 12 months.
This is very interesting method. and I have started idealizing a post on it. Unless you want a friendly copyright on it
|
|
|
|
|
9:00 pm
August 9, 2011
|
Pat S
| | |
| Member | posts 160 |
|
|
|
I think a lot of us may be overestimating the amount we actually need for "retirement". Come to think of it, this might make a good spin off for a blog post… but I'm getting on a roll, since I've been thinking about this recently.
So here goes. Let's say you plan your finances extremely carefully, prioritizing spending, maximizing income and minimizing debt early on. It is possible to retire much earlier than you might think by creating business opportunities and passive income sources that create a "salary" much like any other job, without requiring your time and energy.
When I was reviewing my annual expenses recently, I realized that if I didn't have a job requiring transit and other job related considerations, I could very likely live comfortably on less than 30,000 a year in today's dollars, with extra left over for saving and an occasional vacation.
So, choosing a conservative and tax smart investment method like long term treasury mutual funds which can yield a tax free 3-4% (I know, with recent developments we could debate the merits of US Treasuries… but just stick with me), it would take 1,000,000 to produce the (close to) risk free, and tax free income that I'd need.
That's just an example. If you were still (kind of) working – writing online, selling ebooks, working part time, etc. This amount could be much lower, especially if you are without a house payment, or better yet, own any investment real estate outright that could provide additional (almost) passive income.
Just my 2 cents.
|
|
|
|
|
9:39 am
August 12, 2011
|
The Passive Income Earner
| | |
| Member | posts 152 |
|
|
|
Totally agree with you! It's all about the income you generate (from your retirement fund or not). Do you have 1 source or 5 sources of income?
- Income from investments
- Income from blogging
- Income form books
- Income from a small business
- Income from real estate
- and so on ..
The 3% rule come from what you usually need in retirement to cover your expenses and life style. It's usually call the withdrawal rate but it's just about how much you need to cover your expenses. You can adjust for inflation if you desire.
I believe it's important to see that killer number that it would add up to to make you realize it's not a free lunch and you need a solid plan to achieve it.
|
|
|
|
|
12:31 am
August 23, 2011
|
Patricia
| | |
| New Member | posts 2 |
|
|
|
The Passive Income Earner said:
The simple math is a 3% or 4% withdrawal rate for all the years to come after you retire. If you were to retire at 40 and needed 50K income to live from than you at least need 1.666 M$. That would let you live for 33 years and it doesn't take into account the cost of inflation. That would bring you at 73 years old which is not old these days.
Math aside, it's based on how you set yourself up and where the income to live from comes.
I am hoping to be financially independent at the age of 45 which means I don't have debt and I can change career path or anything without being tied down. Retirement on the other end is probably closer to 55 and depending on my investment income (real estate, bonds, dividends, …)
To answer your question now. If you assume you want to retire at 60, using the rules above, you should be above the 500K$ mark at least (not including principal residence equity). The other question relates to your saving capabilities, before 40, saving ability tend to be lower than in the 40s. Hopefully, your savings accelerate.
Hi,
Thanks for the post. I am new here in http://yakezie.com/forums/. Please help me with this.
Patricia
|
|
|
6:57 pm
August 25, 2011
|
WellHeeledBlog
| | |
| Member | posts 35 |
|
|
|
I'm not sure about what my number is.. but by the time I'm 40 I'd like to 1. have a home that I am on track to pay off by 50, 2. an income-generating rental property, 3. have maxed out the Roth IRA every year since I first started, 4. paid off all of my student loans (undergrad, MBA, future husband's undergrad and his masters), and 5. still fit into my wedding dress! 
|
|
|
|
|
8:03 am
August 26, 2011
|
FamilyMoneyValues
| | |
| Member | posts 812 |
|
|
|
In general I agree with anyone above who said IT DEPENDS.
It depends on the lifestyle you want, your health, whether you have other dependents to care for and etc.
Charles Schwab wrote a book I liked called Your Fifty Now What that talks about considerations just prior to and post retirement.
|
|
|
|
|
9:04 am
August 27, 2011
|
Jackie
| | |
| Member | posts 664 |
|
|
|
Put me in the it depends camp as well. I'm over 40, and I'm not yet where I want to be with retirement savings, but I've made good progress since I had my little panic moment in my late 30's and started shoveling as much as I could toward retirement. The number I'm aiming for is going to seem low compared to the calculators and some of the other comments: $300K. But that's based on needing $12K a year to live on, at 4% withdrawal rate. Of course I'd like to have more than that, but I could live on such an amount. Even now, while I have more expenses than I would when retired.
|
|
|
|
|
6:09 am
August 28, 2011
|
Frugal Confessions
| | Houston, TX | |
| Member
| posts 1622 |
|
|
|
Hi Jackie!
$12K a year is very impressive. Would you want to do a guest post or a post on your website about how you live on $12K a year? I a fascinated!
|
|
|
|
|
4:30 am
August 29, 2011
|
Jackie
| | |
| Member | posts 664 |
|
|
|
Frugal Confessions said:
Hi Jackie!
$12K a year is very impressive. Would you want to do a guest post or a post on your website about how you live on $12K a year? I a fascinated!
I don't live on $12K a year now, but I could if I stopped doing a bunch of stuff. If you want a guest post on that I can send you one :)
|
|
|
|
|
5:39 am
August 30, 2011
|
Frugal Confessions
| | Houston, TX | |
| Member
| posts 1622 |
|
|
|
Hi Jackie!
I would love you to talk about it, but only if you have time and would like to. I can put you up on my Chronicle blog as well.
Let me know if I can help you out in any way:).
|
|
|
|
|
7:22 am
August 31, 2011
|
Jackie
| | |
| Member | posts 664 |
|
|
|
Sure, shoot me an email (comments@ moneycrush.com)
|
|
|
|
|
2:55 pm
September 5, 2011
|
Money Reasons
| | |
| Admin
| posts 697 |
|
|
|
Jackie said:
Put me in the it depends camp as well. I'm over 40, and I'm not yet where I want to be with retirement savings, but I've made good progress since I had my little panic moment in my late 30's and started shoveling as much as I could toward retirement. The number I'm aiming for is going to seem low compared to the calculators and some of the other comments: $300K. But that's based on needing $12K a year to live on, at 4% withdrawal rate. Of course I'd like to have more than that, but I could live on such an amount. Even now, while I have more expenses than I would when retired.
Jackie said:
Frugal Confessions said:
Hi Jackie!
$12K a year is very impressive. Would you want to do a guest post or a post on your website about how you live on $12K a year? I a fascinated!
I don't live on $12K a year now, but I could if I stopped doing a bunch of stuff. If you want a guest post on that I can send you one :)
I would love to read that guest post! It's so counter I-need-multiple-millions mentality that runs ramped today!
|
|
|
|
|
6:49 am
September 8, 2011
|
AccountantByDay
| | |
| Member | posts 57 |
|
|
|
I recently sat down and figured out that I needed to save $30,000/year or so until I retire at 60 to have a nice salary til I'm 80. That's on average, since I won't be putting away nearly that much this year. So by the time I'm 40 I hope to have *contributed* about $500,000 to a retirement account, but it should have a market value of much more than that based on interest earned on the contributions over time.
Right now (at 24) this looks pretty impossible, but we'll see how my salary and career goes over the next few years…
|
|
|
|
Login
Search 
Home
Print this Topic 
Topic RSS 
