How much are you trying to save for retirement

[Juche]

I have heard that many people (but not all) can get by on far less in savings than they have been told. The reason is that during retirement your mortgage should be paid off, you won't have childcare bills, won't need to save 5-20% of income for retirement, your tax structure will be different, you will have SS supplemental income, etc.

I figure I can live fairly comfortably on $2,000 a month net income, probably less. But I prefer $2,000 just in case something comes up. Plus I am assuming I own my own home or condo (which aren't that expensive in the cheap midwest, under 100k). So if social security provides about $1,000 a month I need $1,000 in personal savings. So 200k in retirement funds (in today's dollars) would provide 1k a month for 25 years at 6% growth rates. If you own your own home and car, then all household and transportation expenses can be under $600/month. So really, I shouldn't need too much to survive.

So I am figuring I need 200k in today's dollars plus ownership of my own home to feel comfortable (I have no kids or wife, don't plan to get them either but who knows what the future will do).

I have heard many people say they need 2 million or more, which I don't understand. Two million works out to 10k a month for 25 years. Add in social security and that is about 150k a year. If your kids are self sufficient, you own your own home, why would you need 150k a year exactly?

[csziggy]

1. $2k is not enough to live on now, much less in the future

I have no mortgage, my truck is paid for, but $2k is not enough to live long term on. Granted, I could cut back on internet and satellite TV and save some off my living expenses, but still, $2k is not enough for me to pay my basic expenses plus co-pays for medicine, doctor, dentist - or supplemental insurance to keep those costs down.

It is not enough to save up for another vehicle once the one I have wears out; not enough to pay vet bills for my cat; not enough to go out to dinner or to see a movie every so often; not enough to be able to travel, even if it is just to visit family and sponge off them for the duration, much less pay for a motel to go somewhere else. Or to replace TVs or stereo equipment when they break. Repairs and maintenance on the house, replacing appliances, heating and cooling systems.

That does not include paying property tax, licenses and tags, income tax, house and car insurance. Gifts for friends or loved ones. Hobbies to occupy your time once you are retired.

Sure, you can take out some of your principal for some of the big expenses, but then you have less income to plan for the future.

I have a limited income I have to juggle things to make ends meet and $2k is not enough.

[riderinthestorm]

3. No retirement for me. Farming means we work til we die.

The only "out" for either of us is death. Sounds brutal but that's the way it is for many ag workers. We could sell the farm for some kind of profit, and "retire" but my kids actually love the life here. While both of them are destined to work off-farm for the majority of their income, I know that they would love to live here if/when we pass on even working somewhere else. I couldn't sell it. And if we're able to work it, we're in for the long haul til the end.

I have no retirement savings. We grow a lot of our own food and make a decent living doing what we do but there's nothing left over for "savings" per se. Maybe once we get all the kids through school, we can start thinking of saving but by then we'll be into SS zone....

[kedrys]

2. Trying to save? As much as possible

Actually saving? Pitifully little. I'd do better if I was by myself, but that's not an option right now.

I have no idea how I'm ever going to manage to retire - and yes, it sometimes keeps me up st night, but I just feel defeated. :(

[doc03]

4. Well I was involved in a heated discussion on DU last night

and from what I gather most on DU would means test SS eligibility. So if I were you I wouldn't save a dime because if you have any kind of outside income they want to take your SS and give it to someone else that didn't save. Seriously I am single, own my home, have health insurance with a maximum of $1000 yearly out of pocket and live in an area with a low cost of living and I would have a very difficult time getting by on $2000 a month. Of course your income taxes are lower, you don't have to pay into SS or Medicare and in my case I have no city income tax to pay. I retired May 1, 2010.

[knownothing]

5. Well...

I don't plan on being able to withdraw from Social Security, period. I figure such a system will have been bankrupt for at least ten years by the time I retire (I'm currently 24). So I have to save every little dime that I can, and then find a way to multiply it through investing (yes, the stock market). By time I retire (if the world's still around then and if I live that long), with the rate of inflation, I'd imagine that 100K a year would be necessary for a decent living wage. Maybe that sounds absurd, but what was a decent living wage in 1965 versus what is considered one now?

[doc03]

6. Hang in there I thought SS would be bankrupt by the time

I reached retirement age. Well I made made it to 62 and received my first check in June and you have no idea how fast that time comes around. I would say by the time you reach 67 $100,000 a year would buy you cat food and a cardboard box. There is a link below for a inflation calculator I found the other day. I started my first full time job paying $4368 per year in 1966 I would need $29,413.63 now for the same buying power according to the calculator. My dad retired at 62 and lived to 77 so he collected SS for 15 years my mom was 7 years younger than my dad and never worked outside the home and she is 90 now so she has been living on may dad's SS for 35 years so far.
http://www.bls.gov/data/inflation_calculator.htm

[old mark]

8. In the mid '60's a living wage was around $6 - $12 thousand a year...

I recall $10,000 being a good figure and $12 was big money...many people made low wages then - I remember minimum wage was under $2 an hour.
But you could buy a small old brick row house here in PA for $5 thousand-I knew a guy who did that right after high school...his mortgage was under $60 a month...

I bought a very old used car (a 1949 Buick) in 1971 right after I got out of the Army for $25, drove it for several years.(Wish I still had it - it would be worth a few thousand dollars now.)

My first job as a returning civilian was for around $5 an hour.
I was working for PA State civil service when I retired in '07-made around $28 thousand.

Seriously, I expect Social Security to be around in its more or less current form for many more years to come - I would not expect radical changes to it other than removing the tax cap I do not see it becoming a means tested program.


mark

[pitohui]

17. nah only a few idiots believe in means testing

means testing is a right wing proposal which is meant to split away public support for social security, making it easier to destroy

once the rich/upper middle class stopped attending the public schools, we saw what they became when the most politically powerful withdraw their support

you have to keep ALL workers in the social security program, even the rich, even the upper middle class, it would be pure suicide to remove the most politically powerful individuals from having any investment in seeing social security succeed

i have not in real life heard anyone other than the most naive libertarian or the most rightwing idiot advocate means-testing, i think you have the wrong impression from a few posters (who i will assume are naive instead of "ringers" but who knows really) abt democrats and means-testing

democrats do NOT advocate means-testing, social security is for ALL workers, it is NOT welfare, you put money in when you're young enough to work and you take money out in accord w. what you've put in when you're older, can't get any fairer or more common sense than that...

[applegrove]

7. I plan on working till I'm 75. My grandmother worked until she was in her early 80s.

[pitohui]

18. well life is what happens while you were making other plans

nobody plans on becoming seriously ill or disabled, but i know too many folks who had that happen in their 50s, and it is a common occurrence in one's sixties and early seventies

a plan that counts on going into one's eighth decade of life w.out having a career-ending event such as the end/consolidation of one's industry, serious illness, or serious injury, is prob. not a realistic plan

i'm going to assume that i don't win the lotto and that i'm not guaranteed to be mentally and physically strong until i'm 75, if i do win the lotto, that's wonderful, but i'm sure not planning on it

[hobbit709]

9. Save? What''s that!

I don't know of anyone getting 30K a year in SS. And your math is wrong on 2 mill for 25 years. That comes to 80K per year.

[Raven]

10. There are a number of reputable internet sites that help you

calculate your retirement needs. Just google "retirement calculator".

[rucky]

11. Trying or Succeeding?

[stray cat]

12. Mortgage paid off? - many of us can't even afford a home

[dana_b]

19. I'm in that boat too

If we get SS (I have 25-30 years to go), I'll probably still be renting so I am putting in for that WalMart greeter job NOW!

[jp11]

13. I guesstimated a million but

Trying out this:
http://moneycentral.msn.com/retire/planner.aspx

Shows me with around 3/4 of a million, with estimated SS benefits and estimating a need of 40k a year I'm good till 104 on my savings.

I've got roughly 40 years till 70 if that is my retirement age and I don't want to stop working entirely I'd like to do some small business out of my home if possible in the future and my age/health. It also depends on what my situation is in 20 years or so as putting senior employees out to pasture is a cost saving technique then you have difficulty finding employment with your advanced skills, work history etc.

Of course trying doesn't mean jack for me as I don't have anything saved away on my own just some money in a company 401k and not very much.

The only reason I can see for the higher estimate is traveling, possible medical expenses, freak changes in cost of living, and probably something to do with living longer or the need for someone to look after you if you end up needing that at some point.

[Courtesy Flush]

14. Best laid plans

We had it all planned out. I was going to retire this year, and my wife two years later. Then she got brain cancer. All bets are off. She may not be returning to work, and I'll keep going until we know what this will do to our finances.

But $2000 per month seems very very low. You mentioned a condo. What about fees? Can't they rise? Inflation can eat up $2000 really quick.

BTW: Please tell us how you're earning 6%!!!

[pitohui]

15. no legal investment returns 6 percent interest annual

you are living in some past time that no longer exists, we have a mature economy, and interest rates are almost nothing and have been v. low for almost the entire decade, at the same time that the stock market has done nothing but go in circles

money saved is not growing, it is losing value against taxes, rising health care costs, and rising food/fuel costs

$20,000 a year was a good amount of money to live on in retirement in the 1980s and you could even go to the beach or something, have a vacation on it, to have the same quality of life in 2030, i think you're going to need 10x that amt

in practical terms, since health costs/nursing home costs have soared past the point where any amount of honest savings/investing could provide for those costs, for most of us the most cost-effective retirement will be some kind of handgun, so we won't be a burden to our families when long-term illness strikes

i have not been able to figure out any honest way to get the money i need in retirement, having alzheimer's in my family, it just doesn't exist, sure, i could get $2K a month, that is already not enough for a sick, disabled person to live on -- keep in mind when you're older, you won't be able to do the things you can do now (such as drive a cheap car you can maintain yourself or hop on the bus, you'll need a big expensive "safe" vehicle or you'll need to pay someone to drive you around, v. expensive unless you want to be a nuisance and chase all your friends/family away) -- a lot of things you can do for yourself now you have to pay someone to do for you

even simple things like the lawn or setting up a new piece of heavy equipment

[rrneck]

16. All I'm trying to save at this point is my ass. nt

[icallyou]

20. Please Help

Hello

Can anyone help me.

I’m trying to find out how much Americans pay for mandatory personal debts. For example, below are the mandatory debts I pay as a single working person living in a one bedroom apartment, if I don’t pay them I could find myself in front of a judge.

Council Tax = $90
TV License = $15
Water Rates = $45
National Insurance = $15

Explained:

The Council Tax is what I pay over and above rent on my apartment.

The TV License is what I pay for basic TV channels and excludes luxuries such as cable.

Water Rates is what I pay for my monthly water allowance.

National is what I pay towards healthcare.

What are your mandatory debts for a single working person living in a one bedroom apartment. Please exclude rent, and all luxuries such as cables TV.

Thanks in advance.

[triguy46]

21. Do some research, don't let your assumptions be made on the...

constructed world you describe. Life has a way of dealing crappy hands when you least expect it. I've never met anyone who said, "I wish I hadn't saved so much for retirement." I do know tons of people who figure out before its too late that they have saved too little.

Your 6% is unrealistic. For the next few years, 3% is out there on the fringe. If you are not actively managing your investments, playing the market, day trading, you will not find a retirement vehicle that can do that. In fact, most of us have experienced retraction in our accounts. I just shifted all my future employer plan 403 B contributions to a guaranteed 3% account.

[Sky Masterson]

22. Retirement? Pfft..

I'll drop dead on the job, Dammit!

[Forkboy]

23. My retirement plan is filed under "I" for I'm fucked.

I'm hoping some kind, soft-hearted DUer of the female persuasion will love me for my wit and charm and take me in like some lost, forlorn puppy (I can pee on paper, if that helps). I think my chances are as good as Cheney winning the Peace Prize...

[Bennyboy]

24. We have the same plan!

of course, without health insurance I am pretty sure that it will not be a question that is going to be that important..