OT: How much $ do you need to retire?

[Schmed]

I'm looking closer at this as I get older.... On-line calculators give me various numbers: $1.8MM to $4.0MM needed when I retire (in about 15 yrs).

Depending on which one I believe, I'm either:

A) in good shape to retire
or
B) eating cat food during retirement supplemented by free samples at Costco

Any of you visit a financial planner? We went to see one, but he was pushing all their products (Northwestern Mutual) and pretty much scared us away given all the things we should be investing in.

I've almost always put 15% of my income away in 401k and that money is still not a slam dunk amount of money

[Louis]

About as much income as you're making before you retired should be safe.

[Tony T]

Do your own projection. (and how much you need depends on where you live)
The toughest part is how long one will live.
Keep track of what and where your monthly expenses are going.
Then determine what you want to do when you retire. If you want to travel, then estimate the annual cost.
Then comes the hard part, how to allocate what you have saved to investments — this is the hard part because there is no way to know where the market will be in 15 years (did anyone know that the DOW would be approaching 20,000 when it crashed to 6,000 in 2008?)

[biker72]

Financial planners are like doctors. You don't know you've got a bad one till it's too late.

There are good financial advisors out there but it's really hard to beat low cost index Mutual Funds or ETF's for the long haul.

[eddief]

No one in my family has lived past 80. If that's true for me I have enough to party hardy. If I last longer then the parties will be less hardy. My plan suggests I will be able to spend at least 25% more in retirement than I've been living on in the last many years.

I feel like if I hit hard times our politicians will ensure my security.

[Louis]

Congratulations, Eddie.

Enjoy yourself

[jds108]

Have you determined what kind of monthly budget you'd like?

From there, you can work backwards from a withdrawal rate to the amount that needs to be invested to hit that budget.

I go here: http://www.early-retirement.org/forums/ for discussions about retirement and finances. You'll find discussions there about FIREcalc which is a tool you can use to determine your chances of success with certain types of investments and your retirement expectations.

[jlwdm]

Three biggest factors: how long you are going to live, what price house you are going to live in and potential medical and care expenses.

No easy answers.

Jeff

[nesteel]

What the hells retirement? A bit of perspective: no one on my moms side of the family lived past 69.

[dustyrider]

Originally Posted by jlwdm

Three biggest factors: how long you are going to live, what price house you are going to live in and potential medical and care expenses.

No easy answers.

Jeff

[Louis]

Originally Posted by jds108

You'll find discussions there about FIREcalc which is a tool you can use to determine your chances of success with certain types of investments and your retirement expectations.

Here's an even simpler online calculator:

https://retirementplans.vanguard.com...estEggCalc.jsf

[seanile]

note:
fiduciary (for you) =/= financial advisor (for profit)

http://www.investopedia.com/terms/f/fiduciary.asp

[dgauthier]

Originally Posted by Schmed

I'm looking closer at this as I get older.... On-line calculators give me various numbers: $1.8MM to $4.0MM needed when I retire (in about 15 yrs). (...)

I'll be retiring in 8 years. Our financial planner said, "You don't need any help from me. You've achieved your goal." So I hope I can give you good advice.

To calculate a bare minimum, take your current yearly income (your current lifestyle's fine, right?) and multiply it by the number of years you expect to live after retirement. (I use the age my father died -- 83 -- as my minimum life expectancy.) So if you currently make $100,000 a year, and you expect to live 20 years after retiring, you'll need 2 million in the bank.

Your money will earn interest sitting in the bank for 20 years, but *ignore that*. It's hard to predict the future. Inflation will erode interest earnings, unexpected expenses will happen, etc. If you can hit that number, you won't be eating cat food.

Now that you know your bare minimum, try to exceed that as much as you can.

[Louis]

Originally Posted by dgauthier

To calculate a bare minimum, take your current yearly income (your current lifestyle's fine, right?) and multiply it by the number of years you expect to live after retirement. (I use the age my father died -- 83 -- as my minimum life expectancy.) So if you currently make $100,000 a year, and you expect to live 20 years after retiring, you'll need 2 million in the bank.

I'd bet my 401K that nearly all financial planning advisors will tell you that this is most likely too conservative, and that the vast majority of Americans nearing retirement wouldn't be able to achieve it. Heck, I wonder what % of them have even 1 year's income saved - over 50%? I don't think so.

[dgauthier]

Originally Posted by Louis

I'd bet my 401K that nearly all financial planning advisors will tell you that this is most likely too conservative (...)

Sure it's conservative, but too conservative? Do you want to end up too high or too low?

What's your pleasure, Frisky Treats or Meow Mix?

Edit: I just realized I read "too conservative" as "too safe", but you might have meant it as "too low". Which did you mean Louis?