tvguy
Question anything the facts don't support.
- Joined
- Dec 15, 2003
Yes really. Because happy clients refer more clients and they make more money.Not really. They get paid regardless.
Yes really. Because happy clients refer more clients and they make more money.Not really. They get paid regardless.
$500k and 4% interest would replace my salary now. How much you need would depend on how much you want.Outside of my 401k (which I always try to max out), I'm never sure of how much extra I'm supposed to be saving? I saw a youtube video where a couple retired at age 30-35ish with $2M saved up. The majority of the comments stated that it was not enough money (which I agree with). Putting your kids through college could easily take a big chunk of that! How much do people usually aim to have in their retirement fund, say if youre aiming to retire at 60 years old?
Outside of my 401k (which I always try to max out), I'm never sure of how much extra I'm supposed to be saving? I saw a youtube video where a couple retired at age 30-35ish with $2M saved up. The majority of the comments stated that it was not enough money (which I agree with). Putting your kids through college could easily take a big chunk of that! How much do people usually aim to have in their retirement fund, say if youre aiming to retire at 60 years old?
Outside of my 401k (which I always try to max out), I'm never sure of how much extra I'm supposed to be saving? I saw a youtube video where a couple retired at age 30-35ish with $2M saved up. The majority of the comments stated that it was not enough money (which I agree with). Putting your kids through college could easily take a big chunk of that! How much do people usually aim to have in their retirement fund, say if youre aiming to retire at 60 years old?
Not if you take your money elsewhere.Not really. They get paid regardless.
Not if you take your money elsewhere.
I'm not talking about 401k's. I am talking about other investments.Most 401k plans will now default to a retirement dated fund. And those funds charge a lot to rebalance your money. Most charge over a point. And they are not marketed as funds that try to out perform the market. Finally, most 401k plans have funds sold by less than a handful of fund companies. They really aren’t worried about you switching from one fund they offer to another.
One thing that might help you is that they recommend that you only withdraw 4% of your portfolio a year in retirement to last throughout your life. So say you have 500k saved, 4% of that a year would be 20k a year that would be safe for you to withdraw. Could you live on that? Maybe you need to save more? As others said it depends on your expenses in retirement and what other $$ you have coming in.Outside of my 401k (which I always try to max out), I'm never sure of how much extra I'm supposed to be saving? I saw a youtube video where a couple retired at age 30-35ish with $2M saved up. The majority of the comments stated that it was not enough money (which I agree with). Putting your kids through college could easily take a big chunk of that! How much do people usually aim to have in their retirement fund, say if youre aiming to retire at 60 years old?
We plan to use some of 401k money to bridge us from age 63 to age 66 1/2 when we start taking our full Social Security benefit. Our estimated full Social Security payment is within $200 of our take home pay now, so hopefully the 401k withdrawals will stop at 66 1/2, then we will only take out the minimum required starting at age 72. The just raised the age when you have to start taking money out of IRAs and 401ks form 701 1/2 to 72.One thing that might help you is that they recommend that you only withdraw 4% of your portfolio a year in retirement to last throughout your life. So say you have 500k saved, 4% of that a year would be 20k a year that would be safe for you to withdraw. Could you live on that? Maybe you need to save more? As others said it depends on your expenses in retirement and what other $$ you have coming in.
Outside of my 401k (which I always try to max out), I'm never sure of how much extra I'm supposed to be saving? I saw a youtube video where a couple retired at age 30-35ish with $2M saved up. The majority of the comments stated that it was not enough money (which I agree with). Putting your kids through college could easily take a big chunk of that! How much do people usually aim to have in their retirement fund, say if youre aiming to retire at 60 years old?
As pointed out earlier, there's no set good amount. It's really going to depend on your cost of living when you retire, if you have other sources of income (pensions, rental investment income, amount of social security). I've lived in a high COL area for a long time and, as such, both my husband and my incomes look very high on paper to others who live in lower COL areas. Believe me, we are not rich. But we have worked all our lives and both of us will pull the max social security amounts when we retire. Of course, to live around here, those amounts are only a fraction of what we make today (versus TVGuy whose Social Security payout is almost what they make today--amazing).
I'm kind of using the 4% rule (but stretching it over 30 years versus 25 years which I think 4% depletes at 25 years). Anyway, I'm not even trying to get to what I make now but if I wait to take SS at 70, retire earlier and just use my small pension, I need something like $1M in my 401K to get my income to 75% of what I make today. Will I even need that 75% (I mean, I won't be saving like a madwoman and I should have no mortgage). That's the great unknown.
For me, the 75% of what you made was hogwash. I retired before I was 50. And, moved from the Bay Area to Minnesota. In the Bay Area, my home "cost me" over $8K per MONTH in expenses (mortgage, property taxes, insurance). In Minnesota, my fully paid for home (with part of the equity from my CA house) cost me $600 a month in the same expenses (now risen to about $800). Obviously, I no longer "needed" about $7400 of my pre retirement "income" to have the same spending power. Factor in that everything else costs a LOT less in Minnesota (food, gas for my car, insurance for my car, even tuition at my kids' college), and my family lives quite nicely on about 14% of what I previously earned...and I still take nice vacations, and my 401K is still going up and I still haven't touched any of my outside savings...14+ years now. I think the 75% applies if you intend to "retire in place" with the same expenses for housing you had the day before you retire. Especially in high COL areas, you can do way better by moving to a lower COL area.
For me, the 75% of what you made was hogwash. I retired before I was 50. And, moved from the Bay Area to Minnesota. In the Bay Area, my home "cost me" over $8K per MONTH in expenses (mortgage, property taxes, insurance). In Minnesota, my fully paid for home (with part of the equity from my CA house) cost me $600 a month in the same expenses (now risen to about $800). Obviously, I no longer "needed" about $7400 of my pre retirement "income" to have the same spending power. Factor in that everything else costs a LOT less in Minnesota (food, gas for my car, insurance for my car, even tuition at my kids' college), and my family lives quite nicely on about 14% of what I previously earned...and I still take nice vacations, and my 401K is still going up and I still haven't touched any of my outside savings...14+ years now. I think the 75% applies if you intend to "retire in place" with the same expenses for housing you had the day before you retire. Especially in high COL areas, you can do way better by moving to a lower COL area.
This! I know the guidelines, are just that, guidelines, but some of them to paint a very conservative picture, which inflates the savings number, which I think in turn make some people feel they will never reach the goal.
Expenses are what you need to think about saving for, not some arbitrary % of income. While I am not going to say I am worried about over saving, I am worried about balancing saving vs. living for now. We have been fortunate and saved. Furthermore, we do not have children and quite frankly, I am not interested in leaving seven figures to a more distant relative or a charity at the expense of working now and missing out on some experiences.
However, how to die with zero is a calculation no one is willing to take a gamble on.
Just to be clear and repeat, almost as much was we TAKE HOME working not what we make. Not gross pay. But I expect to be in a very low, or zero tax bracket when I start drawing Social Security. Of course I will any IRA and 401k withdrawals will be taxable income (no Roths here).(versus TVGuy whose Social Security payout is almost what they make today--amazing).
her benefit is actually $500 a month more than she is making working.
With 23 years to go you never know, it may go up.My estimated benefit (at 70) based on what I was making previously is higher than what I am currently bring home by about $400/month. Unfortunetly, I still have about 23 years of working before than. So my estimated benefit will continue to go down each year since I am making so much less now than I did in 2018.
Did the planner do that on their own or did you ask them to run the numbers? No reason to show you that you screwed up if nothing can be done about it...other than them just wanting to show you that you screwed up. Just be wary of turning your money management over to someone with that kind of attitude.My wife shifted everything (100%) of her 401k money 8 years ago in low interest savings because she has been putting 15% of her pay plus the 3% company match into the 401k for 40 years. The balance, with social security was more than enough to carry her into her 100's. Unfortunately, hindsight is 20-20. We are both 62 and plan to retire this year when we turn 63. Our financial planner ran the numbers, if she had left it in the stock market fund in her 401k , she would have $225,000 more in her 401k. Oh well.
The planner did that on his own. Why would I be wary of someone who honestly has our best interest in mind? THAT is the kind of person I WANT.Did the planner do that on their own or did you ask them to run the numbers? No reason to show you that you screwed up if nothing can be done about it...other than them just wanting to show you that you screwed up. Just be wary of turning your money management over to someone with that kind of attitude.