How much do you expect to need for retirement?

Rodeo Burger wrote:

The thing is, some people act like living well now, or having sufficient funds to retire are mutually exclusive.  Anyone who goes to one extreme or the other is a fool IMO.  

There are people fanatical about retiring wealthy, or retiring early.  I know a guy whose plan was to retire at 45, and had been frugal enough to do it.  The problem was that he was an insufferable prick to his wife and kids, so he was divorced a few years shy of his retirement date.  I guess its just as well he'll have to work quite a bit longer, its not like he has anyone to hang out with, or any hobbies to pursue anyway.  

But he won't be a burden to his kids, they want nothing to do with him.

The key is really to make sure you love your job.

I like my job, my co-workers and am constantly stimulated by what I do. If I'm working until I'm 65 no big deal.

I had a miserable career out of college, and worked for a real tyrant bitch. **** that. Life is way too short.

Rodeo Burger wrote:

The thing is, some people act like living well now, or having sufficient funds to retire are mutually exclusive.  Anyone who goes to one extreme or the other is a fool IMO.  

There are people fanatical about retiring wealthy, or retiring early.  I know a guy whose plan was to retire at 45, and had been frugal enough to do it.  The problem was that he was an insufferable prick to his wife and kids, so he was divorced a few years shy of his retirement date.  I guess its just as well he'll have to work quite a bit longer, its not like he has anyone to hang out with, or any hobbies to pursue anyway.  

But he won't be a burden to his kids, they want nothing to do with him.

Oh, I agree. Everything in moderation and all of that.

But I know FAR too many people who aren't thinking intelligently about planning for retirement. And what's just stunning to me is that it doesn't even really take all that much effort. Start young, stick with it, don't be a moron. Just stick with that as a strategy and, barring any untoward financial emergencies, you'll be in good shape. But I know guys who wait too late to start saving, don't save enough, and aren't really realistic about how much money they're going to need and it boggles my mind. Rate of return won't be as high as you hope, inflation will be higher than you hope, and you have to assume that the average life expectancy is going up. So even with a family history of various heart diseases and cancers, and a host of dangerous hobbies, I still use age 100 in my planning. It would just be irresponsible to do anything but.

Good conversation in this thread.

Travelin' Man I graduated in 2011 have been working full-time since and contributing to my 401K. At first, I was very much a live in the moment type guy not investing much or putting much toward 401K. Was more concerned with buying new clothes and shots at the bar.

Now that I'm into my mid-20's I have become very much more geared toward investments and overall smart decisions financially. Like you, the thought of not having enough as I reach my twilight years is frightening....and what fun is retirement if you can't spend any money anyway?

Rodeo I do agree with you though its important to find a middle ground. Can't take it with ya. Also is a comforting thought to leave a little behind for your kin.

Could somebody 'splain me the whole reverse mortgage thing again? If I have a ton of equity in my home (half of my net worth is there, I think) and want to live good till the end, how do I plan on the turnover of the estate/home/land itself? Do they rig it so you just give it up to the bank/lender when you croak?

And how the fock is it any different than a damn 2nd mortgage? I've never understood that part..

One comforting thing I've learned from a lot of elderly people is that in reality, you tend to spend a LOT less money in the last 20-30 years of life..

College expenses for kids is done. The hobbies slow down (a big one for me, I love cars and they are a money pit); a piece of pie and coffee is as exciting as a fancy steak dinner..

Expenses on the house and/or property get lower and lower as you consolidate "stuff" and have less to repair and maintain. I'm already in that planning stage (don't want to be a slave to my property). And for that matter, I could even rent out some space or a bedroom and have the French Maid mow the grass for me   

And trips are exciting, but in reality, a cruise or wild vacation to Europe ain't happening every year. The years go bye really old at 49, I can imagine how it's gonna be at 75!

Food and drink consumption goes way down. Fancy clothes and makeup for the wife probably goes down. A lot of practicality happens as we get older, and expenses become a lot more calculated.

It all adds up to a lot less spending and surprising amounts of cash around for the elderly, when you add up the SS checks, retirement benefits, little accounts and IRAs you forgot about over the years that are now worth Thousands of $$, old cars you've kept that are now worth something (not to mention consolidating), boats, toys, motorcycles you don't ride any more, etc.

Sponge Worthy wrote:One comforting thing I've learned from a lot of elderly people is that in reality, you tend to spend a LOT less money in the last 20-30 years of life..

College expenses for kids is done. The hobbies slow down (a big one for me, I love cars and they are a money pit); a piece of pie and coffee is as exciting as a fancy steak dinner..

Expenses on the house and/or property get lower and lower as you consolidate "stuff" and have less to repair and maintain. I'm already in that planning stage (don't want to be a slave to my property). And for that matter, I could even rent out some space or a bedroom and have the French Maid mow the grass for me   

And trips are exciting, but in reality, a cruise or wild vacation to Europe ain't happening every year. The years go bye really old at 49, I can imagine how it's gonna be at 75!

Food and drink consumption goes way down. Fancy clothes and makeup for the wife probably goes down. A lot of practicality happens as we get older, and expenses become a lot more calculated.

It all adds up to a lot less spending and surprising amounts of cash around for the elderly, when you add up the SS checks, retirement benefits, little accounts and IRAs you forgot about over the years that are now worth Thousands of $$, old cars you've kept that are now worth something (not to mention consolidating), boats, toys, motorcycles you don't ride any more, etc.

I agree with this to a degree. As my own parents now hit their late 70's and early 80's, they're not going on as many vacations (although they still do a few) and fancy clothes and whatnot aren't a priority.

But medical expenses go up. WAY up. Dad isn't as keen on shovelling snow or mowing the lawn, so house maintenance costs go up. Food consumption might go down, but food costs go up. When it's just my parents, they're not as eager to go to the effort to make a big meal - it's way easier to just go out to a restaurant. My father STILL spends money on his cars, but that's just because he's a cool old guy - as I hope I will be some day.

I wonder about medical advances and their effect on life span and quality of life. When I get to 80, will 80 be the new 60? What if I retire when I'm 46 and still have the ability and desire to lead an active life well in to my 80s? That could be 40 years of "active" expenses.

But as others have pointed out, maybe worrying about all this is nonsense and I'll get hit by a bus tomorrow. You never know.

TravelinMan wrote:

But as others have pointed out, maybe worrying about all this is nonsense and I'll get hit by a bus tomorrow.  You never know.

Well just in case, nice talkin' with ya   

Punisher98 wrote:Good conversation in this thread.

Travelin' Man I graduated in 2011 have been working full-time since and contributing to my 401K. At first, I was very much a live in the moment type guy not investing much or putting much toward 401K. Was more concerned with buying new clothes and shots at the bar.

Now that I'm into my mid-20's I have become very much more geared toward investments and overall smart decisions financially. Like you, the thought of not having enough as I reach my twilight years is frightening....and what fun is retirement if you can't spend any money anyway?

Rodeo I do agree with you though its important to find a middle ground. Can't take it with ya. Also is a comforting thought to leave a little behind for your kin.

Congrats on being full time employed since 2011. That's no small feat these days.

I don't mean to come across as some kind of hardass about this stuff. Absolutely - when you're starting out - you need a professional wardrobe, and you spend a little money on girls and booze. That makes perfect sense. Starting to take investing seriously by your mid 20s? You are on your way.

What blows my mind are the articles saying the average worker has less than $50K saved for retirement, or over 70% of people don't take advantage of 401K matching, or things like that. People I know who are in their 40s and 50s and just laugh and say, "Oh, I'll never be able to retire." That's just sad and crazy.

25X what you think you will spend when you stop working. I have 3 kids ... and looked at what we spent in the last 6 months and it was 50% more than what i thought we spent. Don't do a budget ... look at actuals over the last 12 months and then make adjustments.

ONe thing that is often overlooked when people early retire ... you're likely to draw some type of income down the line. You get bored and if you're a good worker, people will ask if you want to help do this or that. Another thing is that you may actually spend MORE $ than you do now ... you'll have time on your hands and when i have time on my hands I spend $ going places and drinking / eating out. Lastly, late in life, you won't spend much at all ... except on health care.

One more thing ... i've studied this subject for years and there are a lot of people that do live on 20K or less year after year. They're smart and are frugal as crap. Not the way i want to live but it can be done. I'm sure you can good search frugal living, etc.

We've not-100% jokingly thought about retiring now (the wife and I are 40ish), buying some chill off-the-map place in Thailand or Argentina, and calling it a career. The joking percentage will go down and down over the next several years, as it is our intent and hope to retire for real in the next 10-15 years. We'll see.

Johnny Alpamayo wrote:We've not-100% jokingly thought about retiring now (the wife and I are 40ish), buying some chill off-the-map place in Thailand or Argentina, and calling it a career. The joking percentage will go down and down over the next several years, as it is our intent and hope to retire for real in the next 10-15 years. We'll see.

That's very cool. tWife and I are in a similar position at the moment. We had originally said we'd retire "by 50" but it was a very abstract notion. Now at 45 I've run the numbers and realized we could pretty much pull the trigger at any time. There are some bonuses and options that might make it worth sticking around for another year or so, but it is the absolute best feeling in the world to go in to work each morning and think, "You know what? If they piss me off today, I'll just quit." That freedom, to me, is worth quite a bit.