Retirement planning

[feh]

I really don't think that $3M for 2 people is unreasonably high to retire on.

I agree, given the OP is talking about 30 years from now. Inflation needs to be taken into account.

[feh]

Do you have a dollar amount you’re targeting for your retirement savings?

I do have a number ($1.7M), but it's just an estimate that will change depending on various scenarios that may play out. There's no question we'll get to that number; the question is when, and under what circumstances.

Chances that I'll retire early are very high. However, "early" could mean anywhere from 50 to 60 years of age. Clearly we would need more saved to retire at 50 than 60. And "retire" may actually mean "semi-retire"; I don't think I'd stop working completely, but possibly shift to part time, likely in a lower-paying profession.

Other variables:

• my wife has been a SAHM the last 13 years, but will attempt to rejoin the work force later this year; what will her income be?
• will I need to help support my mother, who likely doesn't have enough saved for retirement?
• what will be our return on investments the next 5, 10 years?
• will our savings be used just to support my wife and I, or do we want to leave monies for our heirs and charities?

[dawnwes]

We have been saving 15% since we started working at age of 22.

[kork13]

To cover my personal goals/planning.... I'm working off of a general goal of $2M (today's value) by age 60. However, that's just a general planning goal, which I'm not actually very focused on. I'm really more concerned with simply saving at least 15% of gross toward retirement, in addition to other short- & mid-term savings goals. I'm also almost 27 y/o (this summer), and likewise just crossed the 1x income in retirement in the last 2 months (I didn't even realize this until just now when you mentioned it.... cool!!) Another consideration for me, I'm not married yet, so all of this planning is based solely on my own income. When I get married, I suppose all of my planning will change rather dramatically at that point.

OP, I would personally try to bump up at least to that 15% of gross income toward retirement (not counting the match), though maybe not exclusively in 401k/IRA accounts. Especially because you have plans to retire at age 57 and want to travel extensively, you're going to want a buffer built in for you. Adding another 3% of income should not throw off your present lifestyle significantly, but adding it to retirement savings would give you a huge benefit over the next 30 years. Besides, what would it hurt to have a little more than you need in retirement? You'll get used to living on slightly less, you'll save slightly more, and you'll be sitting pretty come retirement.

[Petunia 100]

I'm shooting for 600k in tax-deferred, 150k in my Roth, and hopefully no mortgage. The tax-deferred will provide monthly income, the Roth will be a funding source for large, irregular expenses, such as a new roof or to replace a vehicle. And I will have SS too, of course.

I am on track to reach these goals, so hopefully there will be no hiccups along the way.

The 600k at a 4% withdrawal rate will replace 1/2 of my present gross income, with no adustments for inflation. SS benefits will replace another 25%, which will adjust for inflation. Since I will no longer be saving for retirement or paying SS/Medicare taxes, that puts me close to 100% of my present net income. If I no longer have a mortgage, I should be in OK shape.

If I can manage to end up with 700k in tax-deferred, that would be all right with me.

I don't know that I will be able to have my present mortgage paid in full by that time. It is possible I will sell my house and buy a condo, hopefully able to pay cash. For now though, I continue to be upside down so any equity is theoretical. Another thought I have is that I will do a re-cast and at least reduce my P & I payment. It is possible I would use some of the Roth money towards the mortgage. It is possible I will have a small inheritance to use towards the mortgage. In the meantime, I try to chip away at it here and there.

I am 46 now, and hope to retire in 19 years. If it is not possible to retire 100%, I may work full-time during tax season and take the rest of the year off. If nothing else, I am sure I could work for H & R Block again.

Still a lot of unknowns, but I think it is good to keep these thoughts percolating on the back burner.

[bjl584]

I'm shooting for somewhere between $2 and $2.5 million.

I'm not 100% sure when I'd like to retire. I've thought that it would be nice to retire early, but that will be dictated by how much I have saved.

[bigdaddybus]

I look at 3 main things.
1. house paid off (I am on track for 58 years old)
2. Between 2.2 and 2.4 million in retirement accounts.
3. If I achieve the above 2 before age 62, I will consider early retirement for every year worth of expenses I have saved in non-retirement accounts. (ex. 70K per year in expenses and 210K in savings, I will take an early retirement at age 59) My employer really makes a strong incentive to stay until 62 with our pension program, so it will be hard for me to leave early if I am leaving a considerable amount of future pension dollars.

My last child should graduate college when I am 58, so I expect my wife to be ready to retire shortly after that.

My parents are 65 and healthty today and I am the executor of their estate. Current value of my portion of their estate is approx 1.2-1.5 million in todays dollars. That could quite possibly have a significant impact on my retirement date, though I dont really plan for it.

[liliput808]

should i Collect now or wait 16 yrs

hello im 44 years old and i have an option to collect my annuity for $228 per month till the rest of my life or wait when im 60 and I will be able to collect $980 per month.

what is the value of the money now if i invest into monthly mutual funds and let it accrued or should i wait 16 years to start collecting?

help

[bUU]

This decision is the same decision that we all have to make with regard to social security (or at least somewhat similar): You are betting on your own longevity: If you live longer than expected, then you're always going to be better off waiting to take an annuity payment until the latest possible time. With advances in medical science, it is always a question whether the actuary tables are doing a good job keeping up, and so I think that's one reason why the recommendation is often to wait as long as possible.

By contrast, if you have reason to believe that your longevity will be shorter than expected, then taking the annuity payment early may make sense. You can sock it away and thereby invest it as the annuity payee would have if you had decided to hold off taking distributions. They probably could get somewhat better terms with their investments (being a larger institutional investor) but you can take on more risk than they can, if you would like, and if you have a new job with a big company where you have a 401k, your annuity payments may allow you to contribute more to that 401k, with is excellent institutional options.

I mentioned that the choice was only "similar" not really the "same" decision as with Social Security. There are some spousal impacts with Social Security that would make the decision a little different. Despite a 9 1/2 year age difference between my spouse and I, I'll still end up with a three year period during which I'll be able to draw half of my spouse's Social Security, thereby letting my own Social Security payments grow those extra three years. Clearly, a regular annuity wouldn't have such provisions.

[Blessed]

We save a minimum of 20 percent of hubby income. I save $5k in my IRA as does hubby. I do not have a certain number in mind.

[cardtrick]

I have no number in mind. I just want to do the right thing and save as much as I can although I likely won't need a retirement fund. My parents are well off and I'm probably going to inherit at least $1M from them. At the same time, if they somehow blow all their money, they have nothing to worry about. I will take care of them for the rest of their lives. Nothing is more important to me than family. I wouldn't think for a second if I had to stop all contributions to my retirement accounts, to take care of them. I also expect my income to climb quite a bit in the next decade or so. I just checked my W2 for 2012 and I made $108K gross and I'm only 27.

My current goal is to max out my 401K and my Roth IRA. Once I stop qualifying for the Roth IRA contribution, I will just put the cash into a taxable investment account. To truly feel comfortable, I'd like to have $200,000 saved in cash and my taxable investment account.

[97guns]

never had a plan or a target but i did say to myself when i was 26 that i wanted to retire by 40. for me it all came together when one day i looked at my bank account and it was around 280K, my 5% interest bearing cd's had vanished so i began looking for another place to park funds. i had been in real estate before so i knew it is where i wanted to be, long story short my 280K grosses me 40K a year and im ready to buy another income property this year, for me saving is the key, what to do with the money is the easy part.

[Anton James]

Retirement planning is a bit of a chore!

I have 3 pension funds from old employees, the question is should I move them to a private plan or not? I also think insurance cover in case things go wrong on the way to retirement is important. I have looked for the best pension and life insurance deals available on on-line price comparison type websites,it has been a chore but I liked moneymatchmaker dot com

I got a 10 year deal for me and my wife to cover our mortgage and am looking to get a private pension plan going. I will review our pension plans over time to see how they are going.

I know that retirement pensions and life cover is boring but it is necessary in todays world because with increasing risks and society all seeming to be making a turn for the worst I think it matters.

I wish you all the best to you and yours in your retirement planning!

[Anton James]

Good luck

Sorry about the long winded nature of my post but I really wanted to get that off my chest because I think it is very important to plan for a pension and retirement even though it is not much fun.

My main worry always is that the government moves the goal posts and raids our piggy-banks before we can!

all the best

[smk]

I do have a number ($1.7M), but it's just an estimate that will change depending on various scenarios that may play out.

this sums it up fairly well. measuring success in the ability to pay your expenses in retirement with the dollars you have before retirement simply does not work. it does not tell you whether you will be able to pay your bills when you retire. so setting an objective to maximize your wealth before retirement does not make sense because success in that goal does not tell you what you need to know - whether you will have enough income in retirement.

instead, you could look at whether you can afford a lifetime annuity (hopefully inflation protected) that begins in retirement, or whether you can afford to buy enough TIPs that mature on a yearly basis that fund your critical retirement needs. you can start by legging into assets like these when attractively priced so you cut your basis risk between total funds available and the price of the assets you will need to generate income in retirement. these objectives will tell you whether you will be able to generate enough actual income. so if you set your goals here, you will know better how much you need to retire...