Retirement Goals

[Quantum673]

How much do you need to be able to retire?

I know there is no right answer. Just got to thinking this evening. What is the goal? How much do I need to be able to retire? I ain’t close that’s for sure but we have done a pretty good job of planning for that day.

Another question for you. What would you do different to prepare if you could. I know mine. I wish I would have put less in 401k. I know that is against the norm. The reason is because that money is trapped until you are 59.5. If I would have put in as much as the company match then took the rest and invested independently, I would be years ahead.

The biggest catch though would be having the discipline to put that extra away in investments and not touch it until retirement. Easier said than done but I wish I would have been able to do it. Opens up a lot of options for an earlier retirement.

Random thoughts to keep my mind busy.

 

[jagermeister]

Best thing I ever did was get "a guy" to handle a portion of my investment assets. I contribute regularly to a pension and a 457 program, but I also contribute regularly to separate brokerage accounts. It's currently allocated to a relatively high-risk portfolio, so at times it can be somewhat volatile, but I can accept that at my current age. Nice thing about it is that money is not tied up whatsoever... All I need is about 24-hours notice and I can withdrawal whatever I want with little-to-no penalty. When I shifted my approach from keeping money in a bank to keeping money in the market, it became a real game changer. Your best weapon is consistency, though. Whatever you do, contribute even when you don't feel like it. Whether it's a big contribution at the end of the year, or a steady monthly or bi-weekly contribution, just make sure you're consistent. TIME IN the market beats TIMING the market.

I've heard most recently that 2-3 million in investment savings is roughly what's needed to retire comfortably. Obviously that can vary, based on your standard of living and expenses, and how early you retire.

The only thing I would do differently is start sooner. I never knew what saving money was until I met my wife... She's been my biggest blessing, from many perspectives, but especially financially. Since I was 12 years old, I've never been unemployed (knock on wood). But I never saved a dime... I earned it, and I spent it on THINGS. I still enjoy buying things on occasion, but I'd be so much further ahead right now if I would have had someone to hold me accountable and plant the seed of investing at an earlier age. Thankfully my bride helped me pull my head out of my ass eventually.

 

[GoetsTalon]

Remember when the American dream was to buy a house? Add retirement to that list.

 

[hickslawns]

Great question. What I "thought" was enough 5-10yrs ago doesn't feel like it would be enough now.

"For me" I don't foresee much lifestyle change. If you didn't spend $10k per year on vacations now, you probably won't when you retire either. Might do a big one the first or second year?

Being debt free is the key for me. I'm not there. I will be when I retire. I think you can live on a lot less money if you aren't making vehicle and mortgage payments.

I have rentals properties. Not a ton of them, but enough to help. I plan to use 50% of my rental income as a monthly "pension check." Could probably get away with 2/3 the income but I'll play it safe.

Health insurance is my biggest question mark. If my wife is still working and carrying the health insurance it makes it easier. If I could get her to take a second or third job I might retire earlier. I'm not counting on it though.

I figure $1 million drawing 4% interest is $40k per year (before taxes). Assuming I can draw 4% safely without touching the principal, I guess I just need to decide if I want $40/60/80/100k/etc per year income and do the math. This seems pretty conservative because the closer I get to my deathbed the less the untouched million(s) will matter.

That leaves my last factor in the equation: do I want to live like a pauper to be able to retire with millions that I cannot enjoy? Or do I find the happy medium of enjoying the ride and risking not having enough money to take me to my grave? I love my kids, but I'm not saving any for them. They've paid their own college. They've seen us stretched to ensure they have what they need. They aren't afraid to work. I don't think they will want us to save it for them. They will want us to enjoy our ride no different than my wife and I feel about our surviving parents. If there is some left over? Good for them. (And I suspect there will be as I'm conservative with planning.)

 

[Sgt Fury]

Talk to a financial planner. When I was getting ready to retire, I asked a few coworkers who had retired how they were doing financially and if they would go with the same financial company again. A few said they were making more money retired than they were when they were working. I met with the ones that were highly recommended and asked many questions. They will ask you many questions about debt you have, debt you may have later, what you want to do after retirement, assets you have, ect. I retired at 56 and the financial people took my lump sum buyout and 401k, invested it and we live off of the interest it generated. They will withhold some of it to cover the taxes. My wife did the same thing when she retired at age 52. We are both 60 now and together make more than when we were working. We have it invested in lower risk things (I told the financial planner I didn’t want to be eating dog food when I was 70 so he better not put my money at risk). They had so many options that our heads were spinning when they finished explaining how they could invest it. There were things they are doing with the money that I’ve never even thought of or heard of. We just got our statement for this month….we made about what we usually make in 6 months in just 30 days. Some months you make very little but on average we get 4-10% every year. We only take a certain amount out each year, put it in our banking account and reinvest the rest into our nest egg. It has grown a lot over the past four years even after taking out what we need to survive every year. I still keep in touch with my retired coworkers and they are still getting great returns with their money.…so the company I’m with has a good track record as some of these guys retired 5-8 years before I did and they’re still happy. A couple retirees who went with different financial companies didn’t do well and some lost everything and had to go back to work…making half of what they were making before retiring, so it’s very important to check references….preferably with someone you know and trust. Sorry for being long winded but retirement is a huge step. After talking to a financial planner, when you can make enough money to cover all of your needs and still have a bit left over, then retire. I’ve always wanted to retire early but was concerned about having enough to live off of for the rest of my life. When I was sure, I took the leap. Having your home paid off is also a huge help. Try to plan to have zero debt when you retire…no mortgage or home equity loans ect. That leaves more money for you to pay your monthly bills and to also have money to enjoy your retirement.