I've read a few articles and there are a sh-------, err, a lot of different ideas on how much you need to retire. It seems, the vast majority of current retirees are getting it done with less than 350k in retirement savings (household). This seems grossly inadequate to me and I put "the cheap" in frugal. What do y'all think? Let's just assume a husband and wife getting a combined $4,500k/mo. Social Security check. We, currently, have no debt. Are retired folks borrowing $$$ for cars and such? How much do you think you should have? I'm 54 and have been in the business of retirement planning in the past, but I would sure like to get your take on how much is enough!?

If people can't live on $4,500 a month something is wrong.

To be honest I’m not sure if there is an answer, especially now with the way home repair costs have risen and insurance companies getting really picky about how they pay.

Truth

Don’t quit your day job!

With no debts, I'd think if there was roughly $55k household income coming in a year from SS/pensions, etc that you'd cover yearly expenses in most cases IF you arent living in an expensive area. Heck some places could easily have $15k of that going just into property taxes. However, even with the yearly income, I'd not feel very comfortable without a cushion for all those things that you havent necessarily factored in such as the new vehicles, trips, unexpected medical issues, health care premiums

I am not sure that question can be answered because everyone has different lifestyles and ideas of what "retirement" should be. I like to fish but there is a difference between a couple dozen crawlers a week and out of state trips every week. Your lifestyle will play a big part of it too. How often and far do you travel? I assume you are talking two people. Major medical would be my biggest fear.

I tried to have this conversation with a financial advisor, turns out he was just an insurance salesmen who also was hoping we'd invest our money with them.

I think Tman offers as good of advice as most professionals. That said this question is extremely difficult, I've been pondering it for some time myself as I plan to "semi retire" in 5 years

For my thinking it boils down to three things to make it on half what you both make during one year together

1 Be out of debt, all barrowed bills and buys done with, home, cars, what ever you have on credit
2 Your health is a big dose of reality when either retire if married, it should be as fine as you can get it before retiring
3 You have saved some part of your funds for a retirement helper, along with pensions or some sort of retirement fund

4 Which is really dependent on what you want to do with your self and or spouse retired and pretty personal to everyone,
travel around, visit friends, outdoor activities together or apart with others you may enjoy

Most people end at 3 if they have had the stamina and due diligence of strength to save, most don't, if you do, one should be able to live pretty easily on $4,500.00 a month in my view of my life !

Depends, if you just have 350K or less in 401K, and draw social security for a 2 leg income support mix that might be tough, and everything better be payed off.

Now if you have no debt, a pension, and draw SS you might even get by with say $250,000 401K if the amount of this 3 legged income mix can generate at least $50,000 a year for life.

My advice to the younger people is focus on getting out of debt before retiring, don't be overly concerned about getting a million or more $$ in your 401K because how are you going to get it out?... Sure you can create a financial legacy for your kids, and that's all good, but when you draw out a bunch with your other income streams you rapidly get into higher tax brackets where Uncle Sam gets it.

And, if you retire before Medicare age that higher income will work against you on medical insurance costs.

Just some stuff to consider, and just another opinion.

I'll be eligible to retire when I'm 49. 7 years left. I've put a large amount of my money to land and cattle since I began work. My pension is going to be enough to cover my families insurance and maybe $2000 per month in living money. If I didn't have the cattle I don't see it practical to retire, and if the cattle market falls to 2017 levels I probably can't.

We live on less then that. Like 160 said it all depends on what you are going to do in retirement. We don't travel and don't care to travel so life is very simple for us and the things I enjoy doing don't cost much so we don't need much. I have a ranch though that is my joy and past time.

Get a good handle on your expenses for a year and then it is just crunching number of what SS, saving, 401k, etc. you have. I was nervous when I stopped work, I went out at 58 but everything financially has been good.

If you have 350K and took 4% each year out it would last 25 years at 14K a year. If you took 2% out of the 350K you would 7K a year and 50 years. So, age and how many years do you expect to live after you retire. Figure in all your money SS and so forth and minus and pad your expenses by 10% and do the simple math.

Assuming you'll be living for a long time in retirement, and outliving your money is something you don't want to happen... The math says the "safe withdrawl rate" is between 3 and 5 percent. If the market is up wihen you retire, you need to plan on the low end of that (3), if the market is down, you can get away with being at the high end of that (5). From this you can adjust up annually for cost of living (e.g. using the social security adjustment percentages). 4% of 350k is 14k a year. If the market keeps going up your first few years in retirement, you can adjust up withdrawl based on the new balance.

The safe withdrawl rate is assuming you'll be withdrawing the same amount every year (with COLA), like its mandatory living expenses that must continue for 3-4 decades. If its play money and you're cool skipping withdrawls when the market goes down, then you can get away with taking a lot more.

You'll find plenty of people with a high fee product to sell that will assure you that you can safely take much more. Never decide how much you can withdraw based on the advice of someone profiting from your decision.

I'd encourage you to do a lot of reading on "safe withdrawl rate". Also google "sequence of withdrawal risk".

If you are totally debt free, what else do you have to spend money on? Property taxes, electric, heat, food, medical and a little travel or fun money. I have no expectations of living to be 100 and will likely leave a BUNCH of money on the table. My favorite place to travel is home. My brand of booze was just on sale for $12 bottle. I don't eat much. $4500 month goes a LONG way in that scenario. Since I retired (at 50) just over 2 years ago, I could be drawing DOUBLE what I am and still have my 401 balance remain the same. I believe that we tend to make due with what we have and live on our income (for the most part) anyway. I may get a part time job at some point just for entertainment and the employee discount.

What do you drink for $12? Old crow?

I never considered an overall number I have retired from one job with a pension and am currently working on my second job with a pension, I've invested in stocks and have a 401K we also bought property and paid debts off, when I retire I plan to use social security (if it still exists) for bait and beer money

Want to retire early? Don't get married.

Mine is terrible with money.

My plan that may or not work out but for now the plan is retire at 57. if I can keep up my current investment rate and get a market average return should have at least 1 million to 1.75mil in the 401 and Roth 410 and Roth Ira's.

At 57 I can draw my small 16 to 1800 a month pension and I hope to be able to pull my from my investment returns at that point instead of reinventing it all and live off the returns and never have to touch the investment principle.

I'm now 44 and own my farm & rent house. only debt is on my wife's van because of the low interest rare iv not paid it off. We live simply my truck is a 2wd 97 ranger with springs going through the driver seat and no head liner. it gets me from point a to b and not having a high vehicle payment with matching high insurance and licensplates allows me more money to invest. Setting my wife and I up for retirement 8s more important than driving a flashy new truck.


I don't think social security will be an option and am not planning on having it If I make it to a million at 5% returns that's 50 k to pull a year plus 18 k on the pension. staying debt free and add other small farm income and other bills reduction plans like getting solar put in to eliminate or drastically reduce the powered bill should alow for a comfortable early retirement.

That said yes that's the plan but I have never had anything go as planed and don't expect this to either. It's just the goal.



Edit. I could retire comfortably on much less but hopefully will leave the kids and future grand kids a good chunk and having more and living of the dividends hopefully will keep me from having to spend down what we put back.

There is a lot of truth to that.