Saving too much?

[jIM_Ohio]

Re: Saving too much?

Let's say you draw 5%/year from your portfolio. That would give you $42,250 in year one, which would get adjusted annually based on inflation and investment performance. Add in SS and that might be plenty for you. But you also based that on living to 80. What happens if you live to 85 or 90 or more? My oldest patient will be 103 in August and I have several in their 90s still living at home and managing their own affairs. Your consumer spending may decrease but other needs, mainly medical, may increase.


This is why there is no one size fits all solution. Yes, I can absolutely picture myself cruising around the world. I drive my wife nuts every time the Holland America brochure comes (one came last week) and I read about their Grand World Voyage - 114 day circumnavigation cruise. I think it stops in 39 ports on 6 continents. That is #1 on my retirement things to do list. It's probably about $25,000 per person now. Who knows how much it will be 20 years from now.

I certainly know retirees who are quite content to putter in the garden or participate in other sedate, relatively inexpensive activities and hobbies. I just don't plan to be one of them. Heck, my mother who was 75 last year joined us on a Caribbean cruise including a hike through the rainforest and cave tubing in Belize. That's what I want my retirement to look like.

Of all the calculators I have seen, anything more than a 4% initial withdraw is playing roulette.

I use 4% as my starting point, knowing that that is 95% success (according to past performance, yadda yadda). 3% initial withdraw is much more conservative for good planning.

Take current income, divide by .03. If you have that already saved, you can retire now.

[disneysteve]

Re: Saving too much?

Of all the calculators I have seen, anything more than a 4% initial withdraw is playing roulette.

I agree. I purposely used 5% because Scanner thinks folks are being urged to save more than necessary so I ran the numbers with a more generous withdrawal rate.

[LivingAlmostLarge]

Re: Saving too much?

I plan on living to 100. Unfortunately my family the woman live long, my great grandmother is 98. Grandmother is 78, my dad's mom lived to be 96, my dad is 76. I think I'm running on the higher end of living. So I'd better plan for my money to run out by 100.