Retirement in 2040

[jIM_Ohio]

I like this mindset as well, but isn't saying that your "expenses" are whatever is left of gross pay minus retirement contributions incorrect? Wouldn't this lump other savings (EF, other long term savings goals) into expenses? Better safe than sorry I suppose . . .

My philosophy is 15% to retirement and 5% to short term savings.

In practice at my house it is 20% and 5%. As we get raises the 20% will slowly decrease (as 401ks approach max).

80% is expenses
but that same 80% has SS tax taken out
than same 80% pays a mortgage which will disappear when retired.

If you track expenses well, track the amount in retirement accounts as a multiple of expenses (for example in a good year our retirement accounts have 3X expenses in them).

When that multiple hits 12-16X you are real close to retirement (less than 10 years) and when it hits 20X, 25X or 33X you are ready to retire.

Taxable income is probably closer to expenses than 80% of gross income. When I do our budget, our expenses track so closely to taxable income on the tax return it is scary. Almost to the nearest hundred dollars.

[TBH]

I like this mindset as well, but isn't saying that your "expenses" are whatever is left of gross pay minus retirement contributions incorrect? Wouldn't this lump other savings (EF, other long term savings goals) into expenses? Better safe than sorry I suppose . . .

Oh, good point.

I save about 15% for retirement, and about 10% goes into a short-term savings account that is used for irregular bills, big expenses like house repairs, and emergencies.

So my expenses, including taxes, are really about 75%. That means if I'm saving 15% for retirement, I'm saving 1 year's worth of expenses every five years.

I like that calculation better.

[jIM_Ohio]

Oh, good point.

I save about 15% for retirement, and about 10% goes into a short-term savings account that is used for irregular bills, big expenses like house repairs, and emergencies.

So my expenses, including taxes, are really about 75%. That means if I'm saving 15% for retirement, I'm saving 1 year's worth of expenses every five years.

I like that calculation better.

Watch it- the property taxes and infrequent expenses may or may not go away in retirement- so the 75% is really 80% or similar.

For example if you put 10% for short term expenses, which might include a car, and suggest the 15% does not need to cover this, don't plan on driving in retirement using the method I posted.

[Johansen8]

I think having the freedom and resources to do what one dreams in making the lives of others better is retirement. When we can do what I've said, then it could be a real retirement indeed.
A life of love.

[TBH]

I think having the freedom and resources to do what one dreams in making the lives of others better is retirement.

Well, yeah. That's what I mean by retirement too. I don't mean "the point after which I no longer work." I mean "the point after which money is no longer the primary motivator to work." I will probably still earn some money working, but that won't be the point any more.

Not that money is completely the point of working now, anyway. If it was, I would be doing different work that pays more.

[Goldy1]

I am not too worried about money in retirement. I just try to live below my means and save where I can. I do worry about healthcare. I mean having to work f/t to get benefits until medicare kicks in kinda puts a damper on the whole issue ya know since insurance costs a lot when you get older.

[disneysteve]

I am not too worried about money in retirement. I just try to live below my means and save where I can. I do worry about healthcare. I mean having to work f/t to get benefits until medicare kicks in kinda puts a damper on the whole issue ya know since insurance costs a lot when you get older.

Don't think qualifying for Medicare is the end of your healthcare expenses. You still have to pay for a supplemental plan and a prescription plan plus a deductible and copays and things that aren't covered by insurance and eyeglasses and dental bills and more. And at the rate things are going, I'm not too sure what Medicare will look like in 20 years when I am eligible.