Their math is nuts.
If you are going to use a rule of spending $80,000 a year against $4,000,000 invested, if you ONLY EVER achieved a return equal to the rate of inflation, your portfolio would last 50 years.
That’s nuts.
Good, down-to-earth advice here!
Hubby just retired two weeks ago. He says we’re fine financially, but I don’t want to test that too much. I think we will see how it goes this first year before we do much on the bucket list.
The investment community has many members who live in the suburbs of NYC where property taxes are absurdly high.
These might be typical for Middle America:
Medicare premiums $2,500/year
out-of-pocket/supplemental $3,000/year
drugs $3,000/year (varies a lot)
dentist $1,000/year (on average)
food $2,500/year
phone & internet $1,500/year
lawn $1,500/year
house maintenance $2,500/year (varies a lot)
electric $2,000/year (varies a lot)
heat $3,000/year (varies a lot)
property tax $5,000/year (varies a lot)
That’s about $27,500/year for basic living costs.
Add about $12,000/year for each additional person.
Add about 20% for a margin and for luxuries.
Subtract out 80% of yearly Social Security [expect a 20% reduction come circa 2032].
Figure for 30 years if healthy.
The most important part of your retirement portfolio may be family and friend. It isn’t all about money.
Grab 12 month’s worth of checking account statements to figure yearly outflow.
Generally, life isn’t going to get cheaper.
In my case, I have about $310,000 in savings, a stock protfolio of around $550,000, a house valued at $600,000 and a retirement income of around $75,000 between social security and Army retirement. Crown that with no debt other than monthly use of our credit card (one) , house and car paid, and we are doing fine in our retirement including even putting some into savings each month. My point is everyone is different and there is no cookie cutter answer to how much anyone should have to retire.
Retirement plan: Less thinking and more drinking.
The key thing is to try to own a mortgage-free house by age 55.
Shun places that have property tax of more than $10,000/year on a type of house you expect to die in.
Avoid having to work in really expensive places - i.e. shun electrical engineering, computer programming, foreign relations, marketing, intellectual property law, etc.
An MBA had better be good at sales.
Nurses, doctors, dentists, physician assistants, tradespeople can live almost anywhere.
Retire with an annuity not just stocks and savings.
Make your kids independent. Make sure they know they won't be 35 YO basement dwellers.
Don't go on world cruises six times a year.
Don't buy an RV or a boat thinking it will be an idyllic lifestyle.
Get the best health insurance options you can.
Look at your parent's longevity, it's your gene pool too. If you don't plan on living past 100, get early Social Security. You will probably break even by then.
Still put money away when you have spare change.
Stay away from casinos.
I’m a simple, single 75yo who does little beyond staying at home, spends little and basically lives off the SS benefit. Who will likely never have money issues, save [knock wood] a major medical problem. Home paid for. 2019 car, probably my last buy, sits in the garage most of the week.
Socialist Security could avoid running out of wage slave money by getting into the inflation adjusted lifetime annuity business, as well as boost the economy by encouraging retirees to spend all, save nothing. That's sort of the business they are already in, except the monthly payouts are near poverty level. Let richer people buy a higher monthly payment level, which frees them to spend without worry of ever running out of money.
I’m more or less being forced into early retirement. I’m genetically cursed with longevity, and don’t want to be pinching pennies for 50 years. Retiring with actual wealth thanks to my portfolio. Will be putting most of it into index and treasury etfs, living off the dividends and not touching the principal. My job was my identity, so I have to learn how to live life.
DEI finally getting ditched by corporate charities: Here’s what they’re pivoting towards instead
[[How Much Money Do You Really Need to Retire?]]
$31 Billion 400 Million... and I’m sticking to that figure!
Income vs savings vs spending. Set up a budget and live by it and you should be fine
Live within your means.
Don’t borrow money for anything but real estate.
Buy two or three year old used cars.
Never have a balance on a credit card.
You don’t need a mansion. Start with the cheapest place you can find. Pay it off. Move up without having to borrow.
Obviously one probably can’t stay 100% on that course, but the main goal is to be debt free and save 10-15% of income every year.
The smartest thing I did was to live in a crappy 8x42 1957 mobile home in a dumpy park for 3 years after I got out of the Navy. At age 21 I bought a Craftsman tool kit and learned to do almost all of the maintenance on my crappy used cars.
I’ve never discussed my net worth with friends or relatives. I suggest that is a good policy as well. Retirement is great!
What worked for me is a good Social Security check, pension check, house paid off, cars paid off, credit cards paid off.
I was fine till BIDEN. Now my income almost covers everything. ALMOST. Having to dip into emergency savings ever so often.
So, it’s a long-winded way of saying, “if you think you have enough, you’re still at least 50% short....”
Interesting that they left off one of biggest expenses = Real Estate Tax - In Illinois the average House is taxed at over $12,000 a year plus all of the other taxes. That is $1000 off the top every month to stay in your house.