How much should you save for retirement ?

[am1]

I would think that is jealousy or need to keep up with the Jones. Probably the non stop facebook/twitter/etc. that is filled with so-called celebrity endorsements is also a big factor.

I can't imagine the gov't is the reason they live beyond their means.

Some not all could use a reality check and spend within their means and save for retirement. Question would be is more money saved overall with government intervention or do citizens as a whole save more for retirement when they know it will be 100% for their benefit? I have no problem with people who spend beyond their means have limited income during retirement. Everyone makes choices. Just need a safety net a few feet above the ground so no one is homeless or goes without medical care.

 

[rapmarks]

I would think that is jealousy or need to keep up with the Jones. Probably the non stop facebook/twitter/etc. that is filled with so-called celebrity endorsements is also a big factor.

I can't imagine the gov't is the reason they live beyond their means.

Totally correct. There are savers and spenders. I have one child of each type. Plus I sincerely doubt that someone really based their saving patterns on social security expectations

 

[am1]

Totally correct. There are savers and spenders. I have one child of each type. Plus I sincerely doubt that someone really based their saving patterns on social security expectations

Social Security amounts would not make a difference as the spenders and savers both have to pay into it based on incomes. Possibly a spender pays in more as they need more money for their fix. While a saver retires early or works less and pays less social security. But if a spender wants to spend and fore retirement only has social security then that is their choice. It is a shame that savers have to pay into social security as well because spenders do not save on their own.

 

[mdurette]

The title to this thread "how much should I save for retirement"

My answer, every single penny you can and as soon as you can. Start young too!

 

[VacationForever]

The title to this thread "how much should I save for retirement"

My answer, every single penny you can and as soon as you can. Start young too!

Life before retirement would be pretty boring... No vacation, no timeshare...

 

[CanuckTravlr]

The title to this thread "how much should I save for retirement"

My answer, every single penny you can and as soon as you can. Start young too!

Life before retirement would be pretty boring... No vacation, no timeshare...

When it's suggested to save every penny you can, as early as you can, it doesn't have to mean not living for today. IME, too many use that as the excuse for not saving. There are no guarantees there will be any tomorrows, so no competent planner I have ever met suggests putting off everything today for tomorrow. As with most things in life, the key is finding a balance.

The instructor at a course I attended years ago put it very nicely. He said there were always two hands (for some of us, more than two...LOL!) on your wallet. The hand of you today looking to buy something, and the hand of you in the future saying, "Hey, leave some for me!!"

After more than 40 years advising clients, I have noticed a sense of freedom comes from knowing what your "number" is, even though it may change over time. If you are on track for your retirement objective, then you know you can spend everything else anyway you want, including vacations and even timeshares!

 

[heathpack]

I viewed a youtube clip that said about 81% of Americans at 60 years old have less than $5000 of savings. I started watching this guys channel back when we were deciding how and when we as a couple would take SS.

Bill

This dude is very calming. I am 55yrs old. We have 4x in cash and retirement accounts. Plus another 2x ish in equity in our house. Ive always been handicapped by an inability to fully fund my 401k (due to IRS rules). We got bought by a big Corp and we were supposed to be able to finally fully fund this past year. Nope. Just got a $5500 check back from Fidelity due to over-contributing to my 401k (I put in the max amount for a person my age).

Boy it would be nice to retire in another 5 years...

 

[Big Matt]

The title to this thread "how much should I save for retirement"

My answer, every single penny you can and as soon as you can. Start young too!

This is a great post. I have a friend who is 47. He and his wife have both worked since marriage in their early 20s. They bought a house early and waited to have kids. They can retire now given their wealth even though the kids are only 7 and 2, and college is already paid for. They make about $350k combined and live off of the spouse's $150k income. The entire take home pay for the husband goes to savings. In our area, the $350k income isn't crazy high.

 

[bogey21]

The problem today is that many are not saving either by design or necessity. This is why I advocate changing Social Security from a safety net into forced retirement savings by increasing the amount withheld from earnings and the accompanying employer match. Withdrawals and loans from 401ks and IRAs become too tempting for those who started contributing but don't have the discipline not to tap for whatever reason. Thus I say we need to protect these people from themselves now rather than wait until they are old and destitute...

George

 

[joestein]

This dude is very calming. I am 55yrs old. We have 4x in cash and retirement accounts. Plus another 2x ish in equity in our house. Ive always been handicapped by an inability to fully fund my 401k (due to IRS rules). We got bought by a big Corp and we were supposed to be able to finally fully fund this past year. Nope. Just got a $5500 check back from Fidelity due to over-contributing to my 401k (I put in the max amount for a person my age).

Boy it would be nice to retire in another 5 years...

I feel your pain. HCE rules are the worst. At least now that am 50, I can add an extra $6K that is not subject to the rules. I was actually able to contribute the under 50 max and so far - no refund. PLUS we get a miserly $1K max match.

 

[heathpack]

The problem today is that many are not saving either by design or necessity. This is why I advocate changing Social Security from a safety net into forced retirement savings by increasing the amount withheld from earnings and the accompanying employer match. Withdrawals and loans from 401ks and IRAs become too tempting for those who started contributing but don't have the discipline not to tap for whatever reason. Thus I say we need to protect these people from themselves now rather than wait until they are old and destitute...

George

We also have high deductible health insurance. Our max OOP per year is $7500.

I can have an HSA and that is a pretty useful retirement vehicle. Since I can't maximally contribute to my 401K, I contribute the most I can- around $15000 + $6500 catch up, or around $21,500. But I can also put $7000 into an HSA, plus another $1000 catch up. The HSA can be used for medical expenses pre-retirement, but after retirement can be used for medical expenses (these withdrawals are not taxed) or for any other expenses (a la a 401K, in which case they are taxed).

The HSA is such a sweet deal that I've decided that I'm always just going to pay the $7500 OOP each year if it comes to that. I crashed my bike 2 years ago and was about to write my check for $7500 for my medical expenses- when my Mom was forced to take some end-of-year money out of her 401k and offered to pay my $7500 medical bill. (Lucky me.)

I also qualify for some kind of salary deferment plan, which I have not availed myself of, since we were supposed to be able to max out the 401K. But I'm going to need to look into that I think. Its riskier than a 401K because if the company goes bankrupt, you are SOL as I understand it. But otherwise, the $ is invested and it behaves similarly to a 401K.

 

[easyrider]

I ended up suddenly retiring from my main business when I was 57. When this happened I was totally disabled for 6 months and after a couple of years kind of recovered. We were living on our investments way before I had planned. It seemed to work out pretty good. We had been rid of all stocks for the most part since 2008 and had concentrated on income producing real estate.

I guess my point is often things do not go as planned and having a plan for the un-planed is a good plan.

Bill

 

[am1]

The problem today is that many are not saving either by design or necessity. This is why I advocate changing Social Security from a safety net into forced retirement savings by increasing the amount withheld from earnings and the accompanying employer match. Withdrawals and loans from 401ks and IRAs become too tempting for those who started contributing but don't have the discipline not to tap for whatever reason. Thus I say we need to protect these people from themselves now rather than wait until they are old and destitute...

George

But why have everyone have to do that because some choose not to save. Let people sink or swim.

 

[joestein]

But why have everyone have to do that because some choose not to save. Let people sink or swim.

We never let anybody sink in this country. Not that I want people sinking either. However, we always bail everyone out and then tell them it's not their fault - your the victim.

 

[easyrider]

But why have everyone have to do that because some choose not to save. Let people sink or swim.

I think the main reason people don't save is because no one teaches kids in school about money and investments. Most kids leave high school financially iliterate. Compound that with the government not really wanting a financially literate population and the problem becomes 81% of 60 year olds have less than $5000 that will live on a reduced ss check taken at 62.

Who ever teaches us about money and investments is usually the reason people retire well, imo. For me it was a real estate investor that I had worked for in the 80's. He taught me about using "other peoples money" via loans. He claimed that the debt I had by 35 would increase my net worth to be able to retire at 50. He taught me about using the real professionals and how to sift the wheat from the chaff to tell the difference. He made me self reliant and aware. I was lucky to have known this guy.

Bill

 

[Icc5]

Saved my entire life hoping to be able to retire at some point. Worked for Safeway for 43 years and my wife put in 42 years there. Didn't get married until age 37 and my wife had been divorced and had a 3 year old daughter. We each owned a house and mine was paid off already. We live in Santa Clara Valley. I had some money in the stock market in conservative companies. Two years later we had a son,sold both houses and bought up to a larger house in a more expensive city. We each made about 37,000 back then and when we retired 25 years later were making about $42,000 each at that time.
Moving into retirement between pensions and social security we each now make about $50,000. Took my early retirement at 62 and my wife at 61. Already had bigger house paid off. We get about $15,000 in dividends and another $30,000 in tax free bonds.
We were both leary of retiring. Today, we are living the easy good life. We have more money and time then ever. We own 4 different timeshares and try going on about 6-7 weeks a year in them along with a few cruises each year. Started going overseas until the pandemic hit but will start that up again when things are safer.
My best advice is to somehow get income coming in on a regular basis (haven't touched our 401k's but have to by law in 2 more years). Roth's will go to the kids along with the house and money left. Forgot to mention we have long term insurance we started buying 15 years ago and have a union medical plan that is very reasonable in cost.
We worried about having enough in retirement and now along with enjoying life are able to give our kids each $15,000 a year to help them out. For them,living in California is not easy and we are glad to have them and my grandaughter able to live close by.
Run the numbers to see what you will need to live on. Expenses so far have been much less then when we worked and our income is much higher. Medicare also helps to keep the medical down. We pay dental out of pocket and because we always had a dental plan and used it regurly that too has stayed under control.
If we can do it so easily as grocery clerks I would think others can too.
Bart

 

[bbodb1]

We never let anybody sink in this country. Not that I want people sinking either. However, we always bail everyone out and then tell them it's not their fault - your the victim.

This - desperately - needs to change.

 

[bogey21]

But why have everyone have to do that because some choose not to save. Let people sink or swim.

It is simple. If we don't force them to put money aside themselves, the Government will come to their aid when they are old and broke. And guess where the Government will get the money? You guessed it, from you and I. So I say get it from them now rather than you and I later...

George

 

[am1]

It is simple. If we don't force them to put money aside themselves, the Government will come to their aid when they are old and broke. And guess where the Government will get the money? You guessed it, from you and I. So I say get it from them now rather than you and I later...

George

I understand but if people are not given a chance to swim they never will learn. If given the chance some will and no matter what a few never will.

 

[rapmarks]

I think the main reason people don't save is because no one teaches kids in school about money and investments. Most kids leave high school financially literate. Compound that with the government not really wanting a financially literate population and the problem becomes 81% of 60 year olds have less than $5000 that will live on a reduced ss check taken at 62.

Who ever teaches us about money and investments is usually the reason people retire well, imo. For me it was a real estate investor that I had worked for in the 80's. He taught me about using "other peoples money" via loans. He claimed that the debt I had by 35 would increase my net worth to be able to retire at 50. He taught me about using the real professionals and how to sift the wheat from the chaff to tell the difference. He made me self reliant and aware. I was lucky to have known this guy.

Bill

I think it is because they don’t want to delay gratification. I know a couple with a huge retirement income (200000) they cannot live within. Not only do they eat every meal out, but it is always the pricier items with an appetizer and dessert,no scrimping for them. they are in debt. Everyone always watched on garbage day to see the empty boxes out at the road to see what they bought that week.

 

[Brett]

We never let anybody sink in this country. Not that I want people sinking either. However, we always bail everyone out and then tell them it's not their fault - your the victim.

This - desperately - needs to change.

sure, absolutely ---- if one believes the federal government "bails everyone out" and tells them they are not at fault and they are victims
I've even heard of an (unmentionable) individual that's been bankrupt six times and pays no federal individual taxes ............... that's a big government (and bank) bail out !


...

 

[joestein]

sure, absolutely ---- if one believes the federal government "bails everyone out" and tells them they are not at fault and they are victims
I've even heard of an (unmentionable) individual that's been bankrupt six times and pays no federal individual taxes ............... that's a big government (and bank) bail out !


...

I am not a fan of Trump. He is a repugnant individual. However, none of us know what is going on with his taxes. Many individuals, especially in RE, have their business set up to minimize taxes. His taxes might be 100% legit. Maybe not. However, Mazars is a tier II firm. I deal with them often. They are not some backwater setup. They would take a serious hit to their reputation if they were committing tax fraud on behalf of Trump - possibly go under.

Not really sure why this is the counter argument for the discussion.

 

[rapmarks]

Saved my entire life hoping to be able to retire at some point. Worked for Safeway for 43 years and my wife put in 42 years there. Didn't get married until age 37 and my wife had been divorced and had a 3 year old daughter. We each owned a house and mine was paid off already. We live in Santa Clara Valley. I had some money in the stock market in conservative companies. Two years later we had a son,sold both houses and bought up to a larger house in a more expensive city. We each made about 37,000 back then and when we retired 25 years later were making about $42,000 each at that time.
Moving into retirement between pensions and social security we each now make about $50,000. Took my early retirement at 62 and my wife at 61. Already had bigger house paid off. We get about $15,000 in dividends and another $30,000 in tax free bonds.
We were both leary of retiring. Today, we are living the easy good life. We have more money and time then ever. We own 4 different timeshares and try going on about 6-7 weeks a year in them along with a few cruises each year. Started going overseas until the pandemic hit but will start that up again when things are safer.
My best advice is to somehow get income coming in on a regular basis (haven't touched our 401k's but have to by law in 2 more years). Roth's will go to the kids along with the house and money left. Forgot to mention we have long term insurance we started buying 15 years ago and have a union medical plan that is very reasonable in cost.
We worried about having enough in retirement and now along with enjoying life are able to give our kids each $15,000 a year to help them out. For them,living in California is not easy and we are glad to have them and my grandaughter able to live close by.
Run the numbers to see what you will need to live on. Expenses so far have been much less then when we worked and our income is much higher. Medicare also helps to keep the medical down. We pay dental out of pocket and because we always had a dental plan and used it regurly that too has stayed under control.
If we can do it so easily as grocery clerks I would think others can too.
Bart

You did things the right way, congratulations

 

[Icc5]

You did things the right way, congratulations

Thank you. I always watched friends after high school that had to have the best or fastest car,ate out all the time and at the best restaurants,partied a lot,and spent their money freely to have everything. At the same time I scrimped,went to the local JC then college. Lived in my fraternity to save money,drove a VW for about 10 years and worked full time while going to school full time.
Those friends really enjoyed themselves while younger. When I see them now in person or on Facebok a few have been successful but many still live in apartments or rental housing and complain about everything costing so much. Many moved to what they felt were cheaper states for affordable living. My best friend from high school started a small business with his parents help. He now is an achohic living in a married friends house and they control his finances. He inherited 1/2 of his parents 2 million house and ran quickly thru his share. Most that have done well came from parents that did well. I came from parents that struggled raising 5 kids on my father's low income first job and his other part time job which meant he put in about 85 hours a week. He invested small amounts in the stock market and when he passed my Mom played a little in the market. About 10 years later the market moved and she ended up well off.
What I learned from watching my parents is save,save,save and invest some. Luckily for me it has paid off.

 

[Sugarcubesea]

So, what does everyone think you can generate in income for your retirement on say $1MM. Can you generate 4% to withdraw each year? Or if you generate 4% can you withdraw 6%?

I'm going to have a cash cushion when I retire and will take out 4% the first year and see how the market goes, if its a bad year, I will take nothing out and use my cash reserves. I will adjust each year based on market conditions...