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). :confused:

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 :eek:

[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 :beer:

[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]

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


:beer:

[Louis]

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/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

[seanile]

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

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

[dgauthier]

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]

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]

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?

[Kingfisher]

I pondered this same question 2 years ago at at 60.

Financial planner said I needed way above what we had in IRA's, savings, etc. so i assumed I'd be working through my 60's.

Then, a revelation!! If you have a steady income stream from pension's, good healthcare coverage (we pay same price in retirement as if I was working, ex Federal employee), house paid off, no huge debt, why not retire now.

So I did at age 60 in 2015. With our pensions, healthcare and social security, we are doing fine and haven't touched our savings, IRA's etc. Actually when I start collecting Social Security in March, we will be bringing in MORE than when we were working.

I'm starting to be convinced that the whole financial services industry is geared toward you working as long as you can, placing your money into their hands for as long as possible. Not a knock on planners, because I like our financial planner, but my wife and I came to this decision two years ago on our own and we are fine.

But as luck would have it, my wife has developed early onset alzheimers and needs my care full time, so my retirement fits into the grand scheme of things.

[Llewellyn]

I pondered this same question 2 years ago at at 60.

Financial planner said I needed way above what we had in IRA's, savings, etc. so i assumed I'd be working through my 60's.

Then, a revelation!! If you have a steady income stream from pension's, good healthcare coverage (we pay same price in retirement as if I was working, ex Federal employee), house paid off, no huge debt, why not retire now.

So I did at age 60 in 2015. With our pensions, healthcare and social security, we are doing fine and haven't touched our savings, IRA's etc. Actually when I start collecting Social Security in March, we will be bringing in MORE than when we were working.

I'm starting to be convinced that the whole financial services industry is geared toward you working as long as you can, placing your money into their hands for as long as possible. Not a knock on planners, because I like our financial planner, but my wife and I came to this decision two years ago on our own and we are fine.

But as luck would have it, my wife has developed early onset alzheimers and needs my care full time, so my retirement fits into the grand scheme of things.

And there seems to be an assumption that you should only live on the income without dipping into your capital. Why the hell not??

I'm convinced that if you go into retirement with your house paid off, no significant debt and have realistic expectations about what you want to spend then you don't need anything like the figures that financial planners throw around. FWIW, we gave ours the flick a few years ago - the value just wasn't there for what they were charging. I'm sorry to hear about your wife - good luck.

[Ralph]

I'm currently 75....and retired in 1998. Thought I had enough money for maybe two lifetimes.

Made some (non fatal) investment mistakes. Main one was.....I didn't fully comprehend that how you make your money before retirement is usually concentrating on some big idea.....real estate, great stocks, building a business, etc......where you take risks, put up with a lot of volatility.....and await the day when you can cash out. That's how most people make their money. Investing slowly and being super diversified doesn't get most people what they need for retirement.....I have observed. How you make big bucks is one thing.....how you keep it is another.

In retirement....you have to invest differently. Now the objective is to keep what you have. Be diversified, invest for income as well as some growth. Maybe keep some at no risk at all. This requires a lot of patience, and isn't as exciting as what you do to grow the money. But if you live a long time in retirement, and maybe with no part time job.....your money has to last.....you can't take as many chances, because you have no way to make it back. However....for me personally.....I do this by keeping enough liquid investments for 3-5 years of spending, so don't have to liquidate when markets are down, and still own mostly boring low volatility dividend paying stocks for future.

IMHO one of the best income ideas in retirement.....is to keep working in some fashion doing the work you like in your field....just maybe fewer hours with less responsibility. Make sure you have no debt, and you will need as much income in retirement as you need when working. Will spend less on work related things (clothes, vehicles, gasoline, etc) , but more on others, especially health related including vision, teeth, dermatology, etc...as you age.

I understand this is not exactly what most advisors preach. And it's probably not the advice the rules would require me to give if I was still advising clients. But it's how I think investing in retirement works.

BTW.....I'm retired from Merrill Lynch and this is what I did for a living. And even I didn't get it all right. It's hard for someone who doesn't think about this all the time. I'm no longer registered and licensed to give financial advice....so ignore this.

[OtayBW]

Any advice for how to select a financial planner for an occasional check-up, diagnosis, prognosis? :help:

[Ralph]

Any advice for how to select a financial planner for an occasional check-up, diagnosis, prognosis? :help:

Not really. So few financial advisors have any money themselves, how can you take their advice? It's basic math. Don't spend more than 3-4% of your financial assets and stay invested.....I think. Keep some cash or near cash so you aren't liquidating investments when prices are low. With the recent big rally....I may sell some stocks to gather up more cash than I really need.....just because I like to sell at highs. I'm not so smart really....but have learned to take money out at tops, and try to have some money around to invest at lows.

EDIT addition.....if you find a young er advisor....who is living his advice......maybe saving 30-40% of his income, has his goals written down, and who is smart about investing, where we are in the business cycle, what kinds of investments (or funds) are likely to do well in this time of the business cycle, hang on to him. He can get you to your goals.

[Schmed]

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.

There was a stat recently that a large majority of people don't have $1000 in the bank.

It's interesting (and concerning) to me, that I've done everything "right" - always put $ into 401k, never carried debt, good income, yet it's still a stretch to reach some of the retirement nest egg goals.

I'm afraid that many (MANY) people will be living in poverty during their retirement years.

In our company, only 25% of employees put their own money into their 401k. We even went to a discretionary lump sum distribution to people's 401k, so at least they have something in there.

[Mr. Pink]

There was a stat recently that a large majority of people don't have $1000 in the bank.

It's interesting (and concerning) to me, that I've done everything "right" - always put $ into 401k, never carried debt, good income, yet it's still a stretch to reach some of the retirement nest egg goals.

I'm afraid that many (MANY) people will be living in poverty during their retirement years.

In our company, only 25% of employees put their own money into their 401k. We even went to a discretionary lump sum distribution to people's 401k, so at least they have something in there.

True. Half of Boomers have zero savings. Nothing. Of the other half, maybe 25% of them have over six figures, and then ten percent have 500,000 or more, which is the minimum to start thinking about retiring with, if pairing up with Social Security. Pensions are rare, but, if that third component is there for the few, it will be much more comfortable, but, then we're talking about maybe 5% of all Boomers, if that. And public pensions are looking really really shaky these days, so don't gloat if you're a teacher or cop in Illinois or New Jersey or South Carolina. I predict that Chicago may very well follow Detroit sooner than you think.

If you think our political system has been turned upside down and disrupted big time by economic trends, you ain't seen nothing yet. Tens of millions of old, hungry, and angry Boomers are going to be with us for a few decades as they enter the end zone with no money and in poor physical shape, and the generations following them will have even less as they stare at an old age with much more debt than savings and assets. It's not going to be pretty. I'm 64 (cue the Beatles), and I'm more than happy I won the birth lottery and spent my time on the planet when and where I did. Maybe the best time in human history for the average schmoe like me, the way things are going.

[drewellison]

I'm in the camp of hiring a licensed fiduciary, not a "financial planner". With a fiduciary, they are paid usually a fee or a percentage of the assets they manage (not paid for transactions or to sell you stuff), and they are required by law to represent your interests.

A good fiduciary will look at your complete financial picture: investments (stocks, bonds, cash), real estate, social security, insurance, mortgages, other debt, risk tolerance and financial goals. Then they will craft a plan specifically for you to get to where you want to be.

I started with a local fiduciary (who was also a CPA for umpteen years and knew quite a bit about real estate before becoming licensed to advise) a couple of years ago. I wish I'd done this years earlier. It was a bit unnerving to open up your complete financial picture to someone else, but it was a good move.

[fuzzalow]

It was a bit unnerving to open up your complete financial picture to someone else, but it was a good move.

Try getting approved by a co-op board in order to buy an apartment. It is the same thing.

It is actually less invasive than it might seem at first. If you have actually grappled with the reality of what your true financial picture looks like and truly is, it is no big deal. It all just becomes numbers on a page.

Depending on the building, in going for a rental apartment the co-op board made us make a full financial disclosure as if we were buying. But we knew the bar was different for prospective renters versus owner so we didn't tell them everything. Just because.

My point being, the numbers never lie and never sugarcoat your own finances. Look the harsh or sunny reality square in the eye. Do not be afraid of what you might find because finance is the harshest environment when it crosses with real lives and living. If you do not deal with it, it will cut your throat.

When I post to these threads, I keep it simple to only basic principles or warnings. I caution every reader to not take too much "advice" from posters, most of whom oversimplify what they know down from personal anecdote or bravado. [Added P.S.: I do not wish to single anyone out by this remark. Read what was posted and make your own conclusion. I will note however that Ralph made a correct emphasis when discussing the importance of preservation of capital.] This stuff is far more complex that defies actually learning from a thread discussion - so use it as moral support and the incentive to deal with it on a real basis going forwards if you have not yet done so.

Best of luck. I am outta here, see you at the next stop.

[livingminimal]

I'm putting money into a retirement fund as I am able to, but quite frankly, I will likely always work in some capacity. My main goal is to make sure my house is paid off well before standard retirement age, and that I continue to at least do adjunct teaching work and consulting to have some income.

I am 40 years old. During the Bush years I wrote off the idea that I would ever have some golden perfect retirement full of travel and riding bikes in Belgium or Italy a couple of times per year or a vacation house somewhere else. btw I am a well-educated professional whose career continues to ascend, and I still have zero optimism about retirement with the way the world is headed, and with having 7 and 4 year old kids. In some capacity, I'll work until I literally cant.

[Llewellyn]

Over here the default advice from a financial adviser (sounds like what was described as a fiduciary above) is to put money into superannuation. The only financial advice anyone with a home loan has needed since the GFC struck is to pay as much as possible off of their home loan, because with interest rates at the generational-low rates we have at the moment, there's never been a better time to do it. Clearing what is arguably most people's biggest debt as quickly as possible gives you a great foundation to build on for retirement.

Great post by Ralph above.

[smontanaro]

Aren't a lot of retirement targets heavily influenced by the expected rate of return on investments? That's one reason so many people want interest rates to rise. If you retired a few years ago and were projecting a 5% rate of return, a 2% rate is going to make things difficult. Similarly, if you set your retirement goals ten years ago expecting that 5% return and have been dutifully plunking down what you thought you needed, year in, year out, you're going to look at your nest egg today and wonder what happened if all you got was that measly 2% return.

[Ralph]

Aren't a lot of retirement targets heavily influenced by the expected rate of return on investments? That's one reason so many people want interest rates to rise. If you retired a few years ago and were projecting a 5% rate of return, a 2% rate is going to make things difficult. Similarly, if you set your retirement goals ten years ago expecting that 5% return and have been dutifully plunking down what you thought you needed, year in, year out, you're going to look at your nest egg today and wonder what happened if all you got was that measly 2% return.

Things that pay good interest....bonds, and things that pay big dividends.....stocks....usually lose principal value as interest rates rise. Not good in a rising interest rate environment. CD's OK, but don't help with inflation. A 5% CD rate after income taxes, and 2-3 % inflation.....not so good.

Generally you need investments that can gain value after considering inflation.....stocks and investment real estate. It's good to pay your home off soon so you have more for other things....but I don't think of a home as much of an investment. You gonna sell it and live in a tent when you retire? And taxes, insurance, and maintenance (fixing things....like roofs, AC, heat, driveways, plumbing, etc) will usually (over time) average about 3% or so. But hey....you gotta live somewhere.

[echappist]

I'm currently 75....and retired in 1998. Thought I had enough money for maybe two lifetimes.

Made some (non fatal) investment mistakes. Main one was.....I didn't fully comprehend that how you make your money before retirement is usually concentrating on some big idea.....real estate, great stocks, building a business, etc......where you take risks, put up with a lot of volatility.....and await the day when you can cash out. That's how most people make their money. Investing slowly and being super diversified doesn't get most people what they need for retirement.....I have observed. How you make big bucks is one thing.....how you keep it is another.


What you are suggesting is a venture that may go south but may also make one independently wealthy, and i don't think this would apply to the vast majority of us.


I'm in the camp of hiring a licensed fiduciary, not a "financial planner". With a fiduciary, they are paid usually a fee or a percentage of the assets they manage (not paid for transactions or to sell you stuff), and they are required by law to represent your interests.

A good fiduciary will look at your complete financial picture: investments (stocks, bonds, cash), real estate, social security, insurance, mortgages, other debt, risk tolerance and financial goals. Then they will craft a plan specifically for you to get to where you want to be.

I started with a local fiduciary (who was also a CPA for umpteen years and knew quite a bit about real estate before becoming licensed to advise) a couple of years ago. I wish I'd done this years earlier. It was a bit unnerving to open up your complete financial picture to someone else, but it was a good move.
out of curiosity, how much does a fee-only adviser cost per hour? How often do one re-consult?

There was a stat recently that a large majority of people don't have $1000 in the bank.

It's interesting (and concerning) to me, that I've done everything "right" - always put $ into 401k, never carried debt, good income, yet it's still a stretch to reach some of the retirement nest egg goals.

I'm afraid that many (MANY) people will be living in poverty during their retirement years.

In our company, only 25% of employees put their own money into their 401k. We even went to a discretionary lump sum distribution to people's 401k, so at least they have something in there.


Back in 2012, the stat was that 50% of 401k accounts of people at retirement age have balance < $150,000. Not a lot to live on.

[jds108]

Another issue in this general discussion - I couldn't find a financial planner that could deal with my investing plan: all of my money is split between real estate (rentals and my own home) and notes receivable. The only money I have left in the stock market is a minuscule amount from my last employer.

I retired at 47 with a lower savings/net worth than anybody said was OK, but I'm making plenty of money each month and didn't see any need to work further as it would just add buffer on top of the buffer that's already there.

I'm also breaking the so-called rule about having a mortgage in retirement - I have 5 of them. Rates were so low the last few years that I had no worries about maximizing all of my mortgages and immediately investing the proceeds elsewhere.

[drewellison]

out of curiosity, how much does a fee-only adviser cost per hour? How often do one re-consult?

The guy I work with charges a percent of assets he manages. I think it's 0.8% above a certain level and 1.0% below that. I can consult with him as much as I want and he makes recommendations as to what I should do and has authority to trade on my accounts. Bear in mind that he makes nothing from trading on my accounts. His incentive is to get the value of my account as high as possible - that's how he makes his money. He also consults with me on some of my assets which he does not manage (like real estate and my wife's assets). On an hourly basis, he makes a lot, but it's worth every penny he earns.

[Seramount]

just retired in Sept.

state annuity is ~70% of my previous salary.

as soon as I tap SS (in 18 mo), I'll be making more in retirement than when I was working. have cash in the bank, IRA, Roth, and an inheritance.

house and car are paid for, no kids.

don't have a very frivolous lifestyle, so things look entirely under control.

[Louis]

just retired in Sept.

state annuity is ~70% of my previous salary.

as soon as I tap SS (in 18 mo), I'll be making more in retirement than when I was working. have cash in the bank, IRA, Roth, and an inheritance.

house and car are paid for, no kids.

Let the Good Times roll!

http://cinghiale.com/

https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcR1Pp1FAHM0AjuCgOvneuZAsbCAjNlil uhZqi7No6Q6I3pIJ3KhyQ

[Mr. Pink]

Aren't a lot of retirement targets heavily influenced by the expected rate of return on investments? That's one reason so many people want interest rates to rise. If you retired a few years ago and were projecting a 5% rate of return, a 2% rate is going to make things difficult. Similarly, if you set your retirement goals ten years ago expecting that 5% return and have been dutifully plunking down what you thought you needed, year in, year out, you're going to look at your nest egg today and wonder what happened if all you got was that measly 2% return.

This is why so many pension funds are in trouble. Many use 6-8% as a basis for their projections. Good luck with that these days. So, in order to keep up the illusion, many managers have resorted to "alternative" investments and private equity, driving up costs dramatically, and, in many cases, actually losing money. Tough times. For the pensioners, that is. The managers and Wall Street fund runners and hedgies are still doing very well every year at bonus time.

[bikinchris]

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

I met a school teacher who retired in the early 1960's. She retired on her full pay at the time. $320 per month. Cat food is too expensive at $320 per month.

You really don't need your full pay when you retire. Your expenses are not as high as when you did work. Unless you want to live a lavish life style, in which case having lots more money coming in than when you work won't be enough.

[Jeff N.]

I'd say 62-66 years old with all bills/home/car/credit cards paid off and about a $million-before-taxes tied up in a medium-risk IRA ought to be about right to conclude one's working life. (Plus SS, of course)

[buddybikes]

Dog food is more balanced than fancy feast for people

Way to keep some nice salad mix in your alpo salad is housing. Think of house taxes alone, that is som fixed cost

[jlyon]

I am also 15 years from retirement.

My number is $2.8 million.
Remember your current amount should double in 15 years although its true purchasing power will not go up much.... as inflation takes out its bite.

Then add to that the additional amount you can save in 15 years and the related growth of that for 15 years.

The biggest worry for me is health care costs.
They can't keep increasing as much as they have for the last 10 years.... can they?

[rounder]

I am working past retirement. I feel like we need the money and am too young to hang it up and retire (don't want to ride my bike all day long every day). I feel halfway financially savvy (a CPA), but no way feel financially secure. A falling stock market could put a serious dent in our 401(k) plans for what they are worth.

To me, I like going to work every day and accomplishing something. If that helps us in retirement, that is great. Otherwise, I just like doing stuff.

[joosttx]

The biggest worry for me is health care costs.
They can't keep increasing as much as they have for the last 10 years.... can they?

This is probably the I-didn't-estimate-for. Dental isn't covered by Medicare. Old people need dental work.

[Jeff N.]

I am working past retirement. I feel like we need the money and am too young to hang it up and retire (don't want to ride my bike all day long every day). I feel halfway financially savvy (a CPA), but no way feel financially secure. A falling stock market could put a serious dent in our 401(k) plans for what they are worth.

To me, I like going to work every day and accomplishing something. If that helps us in retirement, that is great. Otherwise, I just like doing stuff.You'll know when it's time to hang it up, believe me.

[Louis]

(don't want to ride my bike all day long every day).

That's why BMW makes the 1200 GSA:

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRhsRhOqjhNI8rB9LViEFdmM5J1roVBt 7UxGQyxA5Sv_5vILaI0

[ofcounsel]

I'm 47 years old, married to a stay at home mom. We have a growing 7 year old. I'm projecting to (hopefully) retire 18-19 years.

Based on my 401k savings calculator, using relatively conservative projections for pay increases and portfolio growth, I should about $2.5m in $401k/pension value at retirement age. Add to that Social Security income when I retire. Still, according to virtually all the internet retirement calculators, that number isn't close to what I'm supposed to need in retirement savings. That's quite distressing.

[Llewellyn]

I'm 47 years old, married to a stay at home mom. We have a growing 7 year old. I'm projecting to (hopefully) retire 18-19 years.

Based on my 401k savings calculator, using relatively conservative projections for pay increases and portfolio growth, I should about $2.5m in $401k/pension value at retirement age. Add to that Social Security income when I retire. Still, according to virtually all the internet retirement calculators, that number isn't close to what I'm supposed to need in retirement savings. That's quite distressing.

This is where I think a lot of these predictions of how much someone needs when they retire are, frankly, BS.

Even if you never earned any interest on that $2.5 million and you spend $100k a year it's still going to last you 25 years. $100k is still quite a lot of money to live on, assuming you don't want a new $50k car or $20k holiday every year or couple of years. I think if you retire with your house paid off and no significant debts then you are starting off pretty well.

I can only assume that the calculators assume that you won't draw down any of your capital. And then you would have to ask why not.

[ofcounsel]

This is where I think a lot of these predictions of how much someone needs when they retire are, frankly, BS.

Even if you never earned any interest on that $2.5 million and you spend $100k a year it's still going to last you 25 years. $100k is still quite a lot of money to live on, assuming you don't want a new $50k car or $20k holiday every year or couple of years. I think if you retire with your house paid off and no significant debts then you are starting off pretty well.

I can only assume that the calculators assume that you won't draw down any of your capital. And then you would have to ask why not.

Good points. I do anticipate having the house paid off, and don't anticipate buying expensive cars or crazy holiday/vacations. And my son will be grown and (hopefully) done with college. As long as we could stay healthy, maybe we could be ok. I'd likely consider selling the house and moving somewhere where the cost of living is cheaper in order to have a better chance. I really don't want to be working longer than I have to.

[oldpotatoe]

just retired in Sept.

state annuity is ~70% of my previous salary.

as soon as I tap SS (in 18 mo), I'll be making more in retirement than when I was working. have cash in the bank, IRA, Roth, and an inheritance.

house and car are paid for, no kids.

don't have a very frivolous lifestyle, so things look entirely under control.

Bing, bing, bing, we have a winner!!!

USN retirement, plus 2x SS(wife and I). Get about 75% of what I did when working. $ in investments that we don't use now but will later when managed care rears it's ugly head.

For right below. 84 yr old mother-in-law..memory care center, one of 20 patients. Alzheimer's..$85,000 per year and once her $ is gone, the facility facilitates medicad..poor system, IMHO.

[Ralph]

My 90 year old mother in law currently resides in a relatively modest skilled care facility burning thru a little over $8000 per month of her savings. She is too sick for us to care for her at home, and too sick for a less expensive assisted care facility. She might live a few more years....but will be broke before then. So will need Medicade coverage. Hope it is still there for her.

This is a person of the depression....extremely frugal.....a WW11 nurse....who worked and saved her money all her life. Who never asked anyone for help her whole life. Don't know how she could have prepared her last years different. Now spending down at the rate of over $100,000 per year for health care. Very depressing to us to watch this.....just hope the state and fed programs will be there for her next couple years. Not sure these incoming law makers understand these situations.

[echappist]

My 90 year old mother in law currently resides in a relatively modest skilled care facility burning thru a little over $8000 per month of her savings. She is too sick for us to care for her at home, and too sick for a less expensive assisted care facility. She might live a few more years....but will be broke before then. So will need Medicade coverage. Hope it is still there for her.

This is a person of the depression....extremely frugal.....a WW11 nurse....who worked and saved her money all her life. Who never asked anyone for help her whole life. Don't know how she could have prepared her last years different. Now spending down at the rate of over $100,000 per year for health care. Very depressing to us to watch this.....just hope the state and fed programs will be there for her next couple years. Not sure these incoming law makers understand these situations.

i guess i can see now why you were suggesting one would need to make a significant sum of money (in stocks, real estate, or otherwise) before retiring. That's quite the sobering read...

All the best to your family.

[54ny77]

Almost exact same situation with my grandmother (incl. being child of depression era who experienced very hard times), except we had to burn through everything of hers and now assist and supplement what Medicaid doesn't cover.

It's a dignity-robbing circumstance in life and I hope that I never, ever get to that point. Will instead go skydiving in Greece and enjoy the view all the way to the pristine blue water.

And no, our wonderful govt leaders have no clue because they have the Cadillac of health care plans. The mere joi polloi have to carry the freight.

My 90 year old mother in law currently resides in a relatively modest skilled care facility burning thru a little over $8000 per month of her savings. She is too sick for us to care for her at home, and too sick for a less expensive assisted care facility. She might live a few more years....but will be broke before then. So will need Medicade coverage. Hope it is still there for her.

This is a person of the depression....extremely frugal.....a WW11 nurse....who worked and saved her money all her life. Who never asked anyone for help her whole life. Don't know how she could have prepared her last years different. Now spending down at the rate of over $100,000 per year for health care. Very depressing to us to watch this.....just hope the state and fed programs will be there for her next couple years. Not sure these incoming law makers understand these situations.

[fuzzalow]

And no, our wonderful govt leaders have no clue because they have the Cadillac of health care plans. The mere joi polloi have to carry the freight.

So the operative challenge is how does the nation expand Tri-Net to the citizenry?

The profitization of health care is immoral.

[oldpotatoe]

So the operative challenge is how does the nation expand Tri-Net to the citizenry?

The profitization of health care is immoral.

Agree. As a USN retired guy I have the same stuff as the boys and girls in Government. BUT it should be mentioned, unless you pony up for it, no 'memory/Alzheimer's' care included.

[Schmed]

The trend of extreme healthcare costs coupled with a majority of people that aren't financially prepared for retirement paints a very bleak outlook.

"Unsustainable" comes to mind.

Even if healthcare costs were 1/2 of what they are now, somebody living on social security can't even cover a tiny fraction of the financial burden it will require to take care of that person. Where will that money come from? Other people, I suppose.

[zap]

Agree. As a USN retired guy I have the same stuff as the boys and girls in Government. BUT it should be mentioned, unless you pony up for it, no 'memory/Alzheimer's' care included.

Annual premiums for long term care insurance went up as much as 70% this year. Know people who are thinking about dropping long term care insurance and setting aside funds in a retirement account for possible expenses.

[tuscanyswe]

The numbers in this thread.. bonkers.

[54ny77]

Wish I had good idea. I don't.

One thing though: the regulatory and administrative burden to get things to market are a staggering cost. Got a pal in medical research, it took almost an entire professional career (~25 years) to get a drug to market in U.S. Meanwhile, Europe and LA markets were open at least a decade prior. That's a lotta time, commas and digits on run rate borne by the company, which is expected to earn a return on that invested capital someday.

Who knows, maybe tweak the construct of R&D to be more of a co-operative structure.

I def. know, based on personal experience, the regulatory costs for just administering healthcare are stupid and burdensome and are a protected fiefdom by the state-specific regulators, who want nothing more than to collect a fee by an insurance company/provider that is domiciled in another state. All of that has nothing to do with my doc's ability and actual time cost for shoving a thermometer in my throat in his upper east office, but my employer, and him, pay the cost for that ability and, thus, I absorb some of it as well via increased premiums.

The costs just plain have to come down! Rent's too damn high! :beer:

So the operative challenge is how does the nation expand Tri-Net to the citizenry?

The profitization of health care is immoral.

[shovelhd]

My situation is closer to Jeff N's than anyone else. I own my home, and the kids college is under control. The one thing that I didn't see mentioned is job loss, which affects the whole picture. I have been unemployed since March. This will set back my retirement timetable, although I haven't been contributing more than the match minimum for a while, choosing instead to build a cash bank. Man has that come in handy lately. I use a financial advisor who makes his money from my IRA and trading account gains. I'd like to retire at 62 but I'll probably hold out until 65. I have my retirement job already.

[Ralph]

In addition to the example of my mother in law above....I also have experienced a challenging situation with another family member who had a long term care policy.....that caused more problems than it solved.

She had this LT care policy.....that was to pay $100 per day of approved charges at a licensed approved long term care facility. She had paid about $2000/year premium for almost 25 years....policy taken out when it was assumed $100 per day reimbursement plus her SS check plus health insurance would pay her nursing home bill.

Fast forward to current time. SS paid first 20 days of an approved rehab/skilled care facility. Secondary insurance (BCBS for her... Plan F) will pay an additional 80 days if you can prove she needs it. Then she is private pay for her skilled care (big bucks). After about 6 months this person broke. So applied for Medicaid. Medicaid says with the LT care policy reimbursement she has too much income to qualify (plus her SS check). So we have to set up a qualified income trust to accept the LT care checks. Meantime she is broke....and although we have satisfied the 100 day waiting period of her policy.....she has another LT care premium due....and no money to pay it with. However....premium is waived in you reside in a LT care facility for 80 days beyond the 100 day waiting period.....but she still had to pay the premium (family) then got a reimbursement. Paperwork goes on every month proving you qualified for reimbursement....insurance company fair enough....but still a pain.

Would suggest you think of LT care insurance as insuring a family's assets....and even then....my experience is it's a pain to deal with.

So....when you get old and maybe sick....be very rich....so none of this matters....or have nothing at all.....and society will take care of you....modest home and car are exempt from the income and asset calculation at Medicaid....so spouse can carry on. Move to cheap part of USA. Or...do some family asset planning at least 5 years before you need these services....leave a modest amount in name of the future sick person to draw down.

[eddief]

at some point we may agree there is another approach to how long we should "choose" to live:

https://www.amazon.com/Boomsday-Christopher-Buckley/dp/0446697974

[rounder]

That's why BMW makes the 1200 GSA:

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRhsRhOqjhNI8rB9LViEFdmM5J1roVBt 7UxGQyxA5Sv_5vILaI0

Yeah. You are probably right.

I am not in to motorcycles, so hope that day does not come too soon.

[dgauthier]

Wish I had good idea. I don't. (...)


I was born in Canada. Government run health insurance (what you call "Medicare for all" here in 'Merica) is terrific. See any doctor you want, because every doctor takes the same insurance. The numbers work too, because everyone is insured in the same insurance pool, not just the oldest and the sickest.

I was born in Canada. I will go back if this country (governed by the orange clown) drops Medicare.

Repeat after me:
Government run health insurance.
Eliminate the insurance industry bean counters, keep your doctor.
Government run health insurance.
See any doctor you want.
Government run health insurance.
Everything is covered, zero deductibles.
Government run health insurance.
Demand it. Vote for it.

[Mr. Pink]

I was born in Canada. Government run health insurance (what you call "Medicare for all" here in 'Merica) is terrific. See any doctor you want, because every doctor takes the same insurance. The numbers work too, because everyone is insured in the same insurance pool, not just the oldest and the sickest.

I was born in Canada. I will go back if this country (governed by the orange clown) drops Medicare.

Repeat after me:
Government run health insurance.
Eliminate the insurance industry bean counters, keep your doctor.
Government run health insurance.
See any doctor you want.
Government run health insurance.
Everything is covered, zero deductibles.
Government run health insurance.
Demand it. Vote for it.


Yup. Only developed nation without it. Don't hear about people in Canada or Denmark or France dying in the streets, or complaining about the sacrificial choice of dog food or a visit to the doctor as an older person. But, hey, Murica!

[oldpotatoe]

Yup. Only developed nation without it. Don't hear about people in Canada or Denmark or France dying in the streets, or complaining about the sacrificial choice of dog food or a visit to the doctor as an older person. But, hey, Murica!

Yup, I'm on medicare, it works wonderfully. Reasonable premiums for myself and wife, variety of Doctors, no waiting. medicare for all, not profit based health care with zillion$ insurance company CEOS running it.

[ntb1001]

I was born in Canada. Government run health insurance (what you call "Medicare for all" here in 'Merica) is terrific. See any doctor you want, because every doctor takes the same insurance. The numbers work too, because everyone is insured in the same insurance pool, not just the oldest and the sickest.

I was born in Canada. I will go back if this country (governed by the orange clown) drops Medicare.

Repeat after me:
Government run health insurance.
Eliminate the insurance industry bean counters, keep your doctor.
Government run health insurance.
See any doctor you want.
Government run health insurance.
Everything is covered, zero deductibles.
Government run health insurance.
Demand it. Vote for it.
Yup...it's great having health care like this here in the great white north...but there are many problems with our system as well. It's VERY expensive, and inefficient as well with many hospitals with long waiting room times of 8 hours or more. It can also take waiting a year for some surgerys and procedures...sometimes risking life with the wait. If you have the cash, you can just hop down to the states and pay for a procedure in days instead of waiting.

There needs to be a better way....for both countries.

Sent from my SM-G935W8 using Tapatalk

[Ray]

Yup...it's great having health care like this here in the great white north...but there are many problems with our system as well. It's VERY expensive, and inefficient as well with many hospitals with long waiting room times of 8 hours or more. It can also take waiting a year for some surgerys and procedures...sometimes risking life with the wait. If you have the cash, you can just hop down to the states and pay for a procedure in days instead of waiting.

There needs to be a better way....for both countries.

Sent from my SM-G935W8 using Tapatalk

It's all about trade-offs. The US has the best health care in the world for those who can afford it. If you have the $$$, you can get it done quickly and well and we also fund a lot of important R&D that helps everyone. But if you can't afford it, you basically die. This is all pre and post ACA - during ACA 20+ million more Americans could afford decent health care, but I'm not optimistic about what happens to them once it's repealed.

In Canada and other single payer public health care countries, it's not as good for those with money but it's better overall. Less $$$ spent and better outcomes for the population as a whole. But there are lines, less elective stuff - if you don't need it right now, you probably won't get it right now. You'll get what you need, but maybe not what you want. In the US, if you can afford it you'll get what you want, but a lot of people won't get what they need. I'm spoiled by being able to afford good health care in the US - I'd probably be very frustrated by a Canadian style system, and yet I favor it because I worry more about those less well off than I do about my own convenience.

I'd take single payer, but it's not available for me for another 8 years and if Ryan get's his way, not then. I can probably afford to do OK regardless, but once they stop covering pre-existing conditions, we might all be screwed. Again. And if you think they can keep the pre-existing condition requirements but drop the mandate, you don't understand how insurance works. At ALL...

-Ray

[zap]

Yup. Only developed nation without it. Don't hear about people in Canada or Denmark or France dying in the streets, or complaining about the sacrificial choice of dog food or a visit to the doctor as an older person. But, hey, Murica!

Not in the streets.......and media in the USA hardly covers the rest of the world.

I lived and worked (paid the taxes....still do but thats another story) and received care in Canada. I never had a problem but my relatives.......one had to be airlift from GTA to Buffalo. Uncle in Germany, supplemental private insurance only paid so much.....sent home a bit earlier than the doctors wanted. By the way, doctors in Germany don't earn that much.

[jlwdm]

Because I am on Medicare I can't get an appointment with most doctors.

Jeff

[Schmed]

I'm not sure about Canada, but some (many?) of us in the states find humor (and sometimes fear) when our government says "we are from the government and we are here to fix this."

I think it's a hugely complicated system and I don't feel that our government has earned our trust to take over our healthcare system. The current HCA is starting to have issues and our VA system is a mess.

But, it is a massive problem affecting our projection for retirement funds.

[biker72]

Because I am on Medicare I can't get an appointment with most doctors.

Jeff

Unfortunately this is becoming more and more of a problem. The internist I had been going to dropped all of his Medicare patients. Medicare doesn't pay very well. Doctors are not required to accept Medicare.

[93legendti]

Before the disastrous Unaffordable Care Act, Michigan law forbid denying coverage because of pre- existing conditions.

Carry on.

[dave thompson]

Unfortunately this is becoming more and more of a problem. The internist I had been going to dropped all of his Medicare patients. Medicare doesn't pay very well. Doctors are not required to accept Medicare.

My take on this, and mostly the whole US healthcare system, is that the system is profit based rather than patient based. Guess what comes first.

[fa63]

This is from 2009, but I doubt the ratios have changed much:

http://uploads.tapatalk-cdn.com/20161211/412b4ed570493507742fc1d9529f92e1.jpg

[jds108]

When ER visit plus 48 hrs ICU goes for $150,000 it ain't the doc's salaries that are to blame.

[OtayBW]

I was born in Canada. Government run health insurance (what you call "Medicare for all" here in 'Merica) is terrific. See any doctor you want, because every doctor takes the same insurance. The numbers work too, because everyone is insured in the same insurance pool, not just the oldest and the sickest.

I was born in Canada. I will go back if this country (governed by the orange clown) drops Medicare.

Repeat after me:
Government run health insurance.
Eliminate the insurance industry bean counters, keep your doctor.
Government run health insurance.
See any doctor you want.
Government run health insurance.
Everything is covered, zero deductibles.
Government run health insurance.
Demand it. Vote for it.
I tend to agree with you, but the problem is that for the 'I got mine and I'm pulling the ladder up behind me' folks, it's hard to swallow having to pay for higher taxes to support 'the welfare state'.

[unterhausen]

old people are uninsurable, the only reason you can get secondary insurance is because medicare will take the big hit. I think most paceliners don't know the people that were helped by the ACA, and the Roberts court really messed up the benefits of it for a significant swath of the country that had Republican governance. That meant they didn't have to expand medicaid, which lowers costs to all people that have insurance, not just the working poor. The truth is, the ACA has held down costs, we are all going to take a hit if it is repealed.

I don't think doctor pay is the big issue. Everything is more expensive here than in other countries.

Someone at work hates the ACA because her husband's business had to pay $75k for insurance instead of the $15k they were paying before. What that means is they were getting fake insurance previously, and it didn't meet minimum standards. I still haven't asked her if her husband was on the university insurance, as is typical around here. We also suffered from the lack of medicaid expansion, so every insurance policy cost more than it had to.

The university used to offer grad students fake insurance as well. That was when I became aware of the existence of fake insurance. They covered just about nothing. It was there so you wouldn't feel like you were going to die. You only figured out you were going to die if you needed to use it.

[2LeftCleats]

Clearly, our current health 'system' isn't very efficient and is overly costly. I don't believe it's sustainable long term and will be a huge drag on the next generation along with its educational debt.

We have to understand that there won't be a perfect answer. British and Canadian systems have their faults but generally cover people better than here. From a population standpoint, we are almost 3rd-worldlike in many measures. We do the high tech stuff very well--if you've got the money--but the nuts-and-bolts stuff like immunizations and prenatal care leave something to be desired. We're in love with robots and lasers but these money makers are pushed without thorough evaluation to be sure they truly add value or merely add to the overall cost.

My belief is that a single payer like Medicare for all is the most sensible approach. Eliminate Medicaid, VA, and insurers and have a single system that all are part of. Obamacare succeeded in offering care to those without, but it's run mostly by insurance companies with a profit motive. The high deductibles have made care beyond a few preventative services prohibitive for many. Additionally, we have to look seriously at what is offered. In my view, single payer by itself isn't sufficient to control costs. We have to be honest that there's simply not enough money to provide everyone with what he thinks he needs. There probably is enough money to provide what is necessary and appropriate. You may want Lipitor, but atorvastatin works fine.

[fa63]

When ER visit plus 48 hrs ICU goes for $150,000 it ain't the doc's salaries that are to blame.


Doctors are just one part of the overpaid chain of people. It all adds up.

[Bob Ross]

You really don't need your full pay when you retire. Your expenses are not as high as when you did work.

Someone's gonna have to explain that to me, 'cuz it makes no sense: The only current expense that I won't have when I stop going to work is the cost of the commute, and that's partially subsidized by my employer and the rest comes out of my pre-tax dollars.

I'll still have to eat. Still have to pay rent or mortgage (unless that's paid off before I retire) still have to pay for clothing and phone, internet, gas, electric service...

Unless I spend my retirement sitting at home doing nothing except watching TV or surfing the 'net, my expenses are gonna go way up.


[edit: And my wife eats for free at work. Boom.]

[gasman]

This is from 2009, but I doubt the ratios have changed much:

http://uploads.tapatalk-cdn.com/20161211/412b4ed570493507742fc1d9529f92e1.jpg

In most of the other countries listed students don't have to pay for medical school. Many of the young doctors starting practice with my group come out with $250-300,000 of debt after 4 years of college, 4 years of medical school and the 4 more years of internship and residency where you are paid poorly and are still accumulating interest on your loans.
Yes, doctors are paid well but very few (spine surgeons, invasive cardiologists) can really get rich . You don't go into medicine to get rich.

[fa63]

I disagree. I have several doctors in my family. They were all able to pay off whatever debt they had very quickly. They are also all doing very well financially (I would call them rich).

That said, I don't blame the doctors for this. It is how the system works; they are just playing in it.

[2LeftCleats]

The doctors in your family likely graduated a number of years ago when med school was much cheaper (I only had $5000 debt in 1980), or went into lucrative specialties. New students prefer the ROAD to riches (Radiology, Ophthalmology, Anesthesiology, Dermatology) to primary care. My young primary care partners have a quarter million in debt before even thinking of buying a home or childcare, since it's likely both partners need to work. There aren't enough American grads to fill primary care spots and some foreign grads have trouble getting visas; that may get tougher under the new administration. Supply and demand doesn't function in primary care. That's another reason we need another healthcare model in the US. I teach med students and I cannot remember anyone in the last 5 years who chose primary care.

[Ray]

The doctors in your family likely graduated a number of years ago when med school was much cheaper (I only had $5000 debt in 1980), or went into lucrative specialties. New students prefer the ROAD to riches (Radiology, Ophthalmology, Anesthesiology, Dermatology) to primary care. My young primary care partners have a quarter million in debt before even thinking of buying a home or childcare, since it's likely both partners need to work. There aren't enough American grads to fill primary care spots and some foreign grads have trouble getting visas; that may get tougher under the new administration. Supply and demand doesn't function in primary care. That's another reason we need another healthcare model in the US. I teach med students and I cannot remember anyone in the last 5 years who chose primary care.

My daughter is a primary care resident. She's always been incredibly frugal and even primary care wages sound like riches to her (as they would to either my wife or I, who never made near that much in our careers - we retired young but that's primarily because we're pretty damn frugal too). She graduated med school with about $180,000 in debt, is already paying it off during her even less lucrative residency, and plans to have the whole thing paid off within 10 years. If you get into medicine for the money, this is probably a frustrating time to be in it. She got into it for much more idealistic reasons and the money she'll be making sounds really good to her. And, who knows, as primary care docs get harder and harder to find, the law of supply and demand says it'll start paying better. She's already hearing about recruiters coming pretty hard after some of her 3rd year resident colleagues (she's in her first year).

-Ray

[2LeftCleats]

Send me her CV

[fa63]

Most of them are recent grads (last 10 years), but you are right; they chose to become specialists instead of primary care. That is what I meant when I said it is how the system works; apparently about 2/3rds of doctors in the US today are specialists. And why wouldn't they be, when there is a system in place that allows them to charge an arm and a leg for their services?