How much $$$ to retire??

[Buck]

I find this story to be so true because DW & I are living it now
on less $$$ than the money guru's say we can. Most $$$ books
that predict how much $$ you will need are written for rich or
spoiled people anyway.

"A rule of thumb among financial advisors is that, when you retire, you need 70 percent or more of your pre-retirement income to maintain your lifestyle. But whether or not that rule will apply to you depends on the lifestyle you choose to live both before and during retirement. The 70 percent rule will most often apply to those who lived at or above their means during their working years and who choose to continue doing so in retirement. It will least often apply to those who have lived below their means and continue to do so in retirement. My wife and I are a good example of the latter.

Live Below Your Means

Over our 18-year careers, we averaged $47,300 per year in after-tax income. Like most people, we earned significantly less in the beginning and far more at the end of our careers. According to the 70 percent rule, and based on our income the last three years before we retired in 1993, we should have needed $53,000 in after-tax income to maintain our lifestyle. Are you kidding me? The fact is, we never spent anywhere near $53,000 any year in our lives, so why would we need that much in retirement? Here's why the 70 percent rule didn't apply to us and why it won't apply to others who live below their means."

The rest of the story here........
http://www.stretcher.com/stories/04/04jul19b.cfm

[madmac]

I am five years away from retirement. I think I will be ok. I am pretty sure we will need much less than they project but it is a worry till the day comes. Thanks for the link Buck as I found it very usefull.

[rAcErRicK]

Hello Guys. There are many unforeseen things that will take away from your fixed income also, so do anything you can to increase the size of that cushion between having to have, and wanting to have. I retired from a respectable (riiight) company after 30 years (sprint, now embarq), had a decent life insurance policy. Now that I'm 69 I just found out that there is a law that they can reduce my life insurance by 50% when I reach 70, and guess what happens if I live to be
80? You guessed it, it goes completely away !

I also met a retired gentleman a few years ago, from one of the big 3 auto companies, whose entire retirement was simple dropped, that's right, dropped. It seems there is another law, passed while the previous president was in office, whereby if one of the 3 auto co's is in dire financial straights, they can simply "cut loose" a certain number of retirees from their retirement budget. So beware my brothers, when you need it the most, there are shysters out there who will politely remove food right from your mouth, and put it in their pockets, all the while, the CEO's are still making millions per year, with NO decrease in salery.
Just another rape, loot and plunder of the American people, when you are least able to fight it. Don't assume any income to be secure, anything you can check out now, do it.

[RangerRick]

Fail to plan plan to fail. Sweetie and I made our plan right after we married. True the plan changed through the years but so did our desires. During our military career we moved every 3-4 years which entailed buying and selling a home "smart". Buy to sell and never consider anything you're not sure you can sell. It helps if you can actually make money on a sell. We were forced into being distant landlords only once and that was because we choose to keep our home in retirement. Through double payments it was paid for prior to retirement at 51 years of age. We lived on a cash budget and didn't use checks/credit cards for many years. We put both daugthers through their first 7 years in private christian school where Sweetie worked in whatever position she could manage to help with tuition. We never owned a new car until we retired and 90% of our clothes came from a thrift store. We paid our tithe, and put money in savings and the stock/mutual market monthly and usually had a garden. Any hunting/fishing was primarily to put food in the pot not trophies on the wall. Living was tight but our plan called for it so that was the way we worked it. We retired 7 years ago with all the toys any one could want and owe no man a dime. It is doable but we really had to work the plan.

Ranger Rick

[madmac]

That's the way to work it Rick. We are almost debt free with just a few more months of payments and plan on socking as much away as possible for those rainy days. I have heard a bunch of insurance stories so yours is of no suprise and I think mine may be the same.

[Clair_Schwan]

This is a tough question to answer, because there are so many variables. Here is what I did:

Started my own business.
Got rid of my debts.
Piled up a bunch of money.
Bought a place in the country.
Paid off my ranchette in a few years.
Set plans in motion to become self-sufficient.
Acquired tools and resources for self-sufficiency.
Settled into a frugal lifestyle.
Let my travel and work for others business wind down.
Retired at age 49, two years ago.

The keys to my success are:

1. My relationship with Ellen has me covering the cost of housing, real estate taxes, insurance and improvements, and her covering the cost of food and utilities.

2. My retirement efforts focus on investments in self-reliance that get rid of the food bill (chickens, turkeys, ducks, fish, sheep, rabbits and greenhouses) and the utility bill (wind turbines, solar panels, solar water heaters and an outdoor wood furnace).

3. Being happy with a frugal life. We buy used, work from home, and are happy with making the most of what we have. We don't need to travel, eat out often, or live a sophisticated lifestyle - been there, done that for 30 years. See more about what we do, how we do it, and what we believe in at http://www.frugal-living-freedom.com

4. Planning for success and working the plan. I have never counted on retirement income other than what I have banked myself. I don't count on social security at all. When I paid off my place in 2005, it wasn't a joyous day because it was never in doubt - it was part of the plan.

5. Defining retirement differently. Retirement has never been not working or making money. That just wouldn't sit well with me. I always have to be doing something. My philosophy is simple; when you stop, you're dead. So retirement is doing what I want, for whom I choose (me these last two years), when I want to, how I want to, where I decide to, and for compensation that I am willing to accept (zero these last two years).

If I were to just retire in the traditional sense, unplug from a professional life and stop my own enterprise-based revenue streams, then that would put me in a long term money drain mode at the mercy of whomever I am counting on to pay my pension. Not something I am going to allow to happen if I can help it.

So, your lifestyle, expectations and degree of self-reliance and self-funding have a large influence on what you need in terms of income. I know people that retire with multiple mortgages on their home. This doesn't make sense to me, but then my lifestyle probably doesn't make sense to them either.

Good fortune to all,

Clair

[gump]

Tough to spit out a dollar amount, especially if you are younger like me. The cost of some needs has exploded in recent years.

Instead of focusing on the future amount I just try to stash away as much as possible. I am 30 and have managed to save about 50k in retirement accounts. Not a superstar amount but not bad either :-/

[WileyCoyote]

So many of my younger (30-48 YOA) friends are in a deep dread, not quite a panic - yet. They trusted that their 401Ks would see them through. They live to their exact limits - the $650-1200 a month house payment, the $450-850 a month car payment. They haven't stop driving their gas-sucking SUVs yet - they NEED them. (They never drive off-pavement; they need them to haul kids and groceries.) *They are still going to Disney World, on vacations at the beach, thumbing their noses at gas prices - "We're going to go now because next year we might not be able to!"

Meanwhile, I watch older folk selling everything upon retirement, and going to live in gated retirement communities, where there are so many activities that they have to choose how to spend their time... golfing, swimming, dancing and performing, playing at the end of their lives. At least, some of them are. Most of them are struggling to make ends meet, working as greeters at Wal Mart, *at McDonald's, at the nearby medical centers. They insist that they are just keeping busy, but the truth is that their homes and their POAs and their lifestyles are sucking away their retirement like a huge silent sump pump.

No one believes there will be a recession or worse, this is just a correction of a brief period of fiscal insanity. No one remenbers watching people fight over the last three pieces of green mouldering meat in the grocery store back in the 80's. No one believes it could happen to them.

When hubby and I got married, we were poor - he was making $9000 a year as a fire department captain. We knew what poverty was. We bought a house to garner equity. We bought many things - not new cars every three years, not a new house - but things that would last, things that we would need - tools, cast iron cookware, things to make things with, things to grow things with, even bandages and medical equipment. One thing we can do is create things, refurbish things, make things work. We taught ourselves, mostly; or took whatever classes were offered whenever.

While his retirement comes from the State, all that means is that it will be one of the last ones to be discarded. We are busily paying off all debt, are building a life in a place that has a incredibly low Cost of Living. It costs a lot less - less than half! - to live here rather than the place we moved from. And most importantly, it is not a tourist or retirement mecca, not just another stop on the Great Migration Interstates - there are no interstates in 100 miles. No tourists looking to retire. No frozen Yankees looking for a permanently sunny and toasty Paradise, along with hundreds of thousands of others looking for the same thing.

So planning for retirement for us had to include spending less, not more; spending wisely not broadly, choosing based on far less than what we could afford. To tell people to save for retirement based on their income is to tell them that they don't have to think about or plan for circumstances beyond their control, that could end up by making them homeless or hungry.

As m friends watch their 40ks shrink, $100 less every week, they are sitting back assuring themselves that it will turn around soon. After all , it always does, doesn't it? Honey, throw another steak on the grill... No more left? Well, hop in the SUV and go get some more then!

Rushing headlong into the dark... *

[TNDadx4]

Nicely said WC. It sounds like you're going to be OK.

You may be rushing, but I don't think it's into the dark. You seem to have a lot of light :)

I too watch people that I know that don;t care or plan for the future. It's always live for today. It doesn't make sense.... Then again, I was like that once, I guess.

[MYellowRose]

I've recently read that you should really use your expenses not your income when figuring how much money you need for retirement.

[Cutter]

Retirement means different things to different people. I was a grocery store meat cutter for 35yrs and could hardly wait to retire at 55. My back hurt all the time, I was tired of my hands being almost frozen all day, and my feet were killing me. After a couple months I found I got tired of fishing and missed the people I had worked with. When the chance to work in Airport Security came up I jumped at it. The work is easy (haven't found a bomb yet ) and I'm not cold all the time. I'll keep this job till I either die or they let me go for being too old. I now draw my full retirement from meat cutting and work full time for the government. I even picked up the 4yrs military time towards another retirement that I needed 5yrs to vest. Life is good. Retirement is over rated.