40% Of Americans Say THIS Is How Much You Need To Retire - Are They Wrong?
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- เผยแพร่เมื่อ 24 ก.ค. 2024
- How much do you need to retire? A recent survey from @Gobankingratescom asked Americans how much they though they needed to retire - and here's what they said.
Link to the MSN article: www.msn.com/en-us/money/retir...
Social Security Estimate Calculator: www.ssa.gov/OACT/quickcalc/
Thanks for watching @ErinTalksMoney I appreciate you!
Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
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While you are here, why not check out some of my other videos:
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#retirement
Once I got on track (age 29) my goal was save "as much as I could." As you stated, a number is just a number without any specific input. I retired at 58 with $1.5 million in retirement savings and a pension. Now at almost 62, I haven't touched my retirement money yet and haven't decided when to apply for social security. The hidden key to success is what you added - exercise, eat healthy, and take good care of yourself. Step away from the junk food, walk to get around, and find happiness in everything you do.
Great analysis. I retired at 55 eleven years ago with $500k in the bank. My pension, from an engineering career, and now Social Security, taken at 62, gives me a very comfortable 6 figure income. On top of that I move to Thailand 5 years ago. Thailand is one of those lower cost of living countries with great healthcare.
this is literally what the wife & I are considering as well. Numbers and age are almost the same.
I retired at 62 with $50,000 in the bank and could not be happier. No debt and 4 income sources in retirement is all it took. Be careful when somebody tells you what you "need" to retire.
My retirement savings goal is $2 million at age 62, which is 9 years away. I could certainly survive on less, but that's what it will take to do ALL of the things I want to do in retirement, including build my dream retirement home without debt, buying a small 2-person RV for domestic travel and spending a couple months per year traveling abroad.
Well done! I retired this year at 59.... with $1.6M. You did an exceptional job explaining the uniqueness of what is needed to retire. That number is completely individualized. Everyone's situation and needs are so dang different.
Similarly, I'm 66 and my job was eliminated due to Covid related cost reductions. When it happened I had $1.6M in retirementment investments plus a $500K home, a pension, and a higher than average social security balance. Since last spring my $1.6M has been reduced to a little more than $1.3M and my home is now worth $450K. So I went from having 12 time my prior annual pay to about 10 time my annual pay.
The big shock for me is the effect of inflation. Items in the grocery store that were $3 are now $5 to $6 dollars. And I thought my annual income was pretty good after working for 45 year but now entry level management salaries at my prior employer are equal to what I was making at the peak of my career.
I've gone from thinking I'm in fat city and I can travel and maybe consider buying a cottage to realizing the plush retirement I was expecting will be about equal to a lower middle class lifestyle. Now I'm considering selling everything and moving to Portugal where I can live a better life for less and enjoy improved, less expensive health care.
Also politics here has become so divisive that previously close friends now call me a communist (I voted for Biden) and I suspect they would hurt me if given the chance. WTF? People I've known for more than 20 years and never had a crossword with? Portugal is regarded as one of the friendliest nations in the world and they, under certain conditions, can provide a visa and a path to citizenship giving me access to the entire EU.
Sadly the war of Russian aggression in the Ukraine and the impending recession have put everything on hold.
@@lockman004 - hopefully you got some new friends who appreciate the booming stock market returns of Presidents Clinton and Obama (best in your years working).
@@nomadnationalist2776 I'm a second generation Ukranian American. Most of my uncles and cousins sill live in the Ukraine. Their lives have been interrupted by the "Russian Aggression". So how have you managed to not be conscripted? Or have you been conscripted and your job is to troll the internet? Khoroshiy zamok s etim tovarishchem.
@Lockman 04 you are a commie and I'm thrilled you're down 350k. You're a big reason why and deserve all you voted for!. Trust me Europe no better but I'd be glad to see a commie go!
Very encouraging Erin! This should bring some comfort to a lot of people.
Rather than talk specific numbers, the strategy the wife and I pursued for a comfortable retirement developed during our working years and about 30 years prior to retirement. It primarily consisted of these 4 key actions over those years:
1. Pay off all mortgages at least 1-2 years prior to actual retirement (we have three rental properties in addition to our home). We managed to accomplish this 2 years prior.
2. Avoid spending too much on big ticket items or at least keep them to a reasonable amount and time frame. For instance, our avg car ownership was 13 years.
3. Do not accumulate personal interest - ie, pay off each CC bill monthly.
4. Max out as much as possible our 401k's.
All I can say is it worked for us. Is this approach for everybody? That I can't say, but it seems reasonable and doable.
I highly recommend creating an account on the Social Security website. It now only shows how much you can expect in retirement but also lets estimate future income so you can plan for increasing or decreasing salaries in your future. Also, it shows your entire history of earnings. If you've been around awhile as I have it's interesting to see just how much your income has increased over the years.
Absolutely!!!
Hi Erin, awesome video! I love this subject, and seeing how many people are committing and liking this video shows me a lot of people like this subject also. And that fact that you are soo good at making these videos and letting people know how important taking control of your finances is, is a huge reason why! I’m missing watching The Money Guy right now also, because I prefer to watch your videos first (you are that good!) and then I watch theirs.
Have a blessed week!😊
P.S. your workout schedule and eating habits really show! You look Amazing!
The money guy is an amazing show!! Thanks for always bringing to positivity! 😊 and thanks for the kind words
6000 per month after taxes no debt in Kentucky at age 55 is the plan. Thank you for the video.
Thanks for the wonderful detailed information. All of us younger than retirement age need to here this information more often. Love your outtakes 😊. God Bless you and your loved ones
Thanks B!
Impressive video count lately Erin! Great content and viewing, thanks for your efforts and the education provided 😊
Thanks so much! 😊
What I am getting a kick out of is my grandson. He is now watching Erin Talks Money and is very studious. He actually takes notes and everything. BTW, he is 10 years old. We were visiting over the weekend and he and I had a nice conversation about ETFs and Mutual Funds. He loves building his ideas with Legos. He thought that would be a good company to invest in. He was a bit disappointed that Legos is a private company with no options to invest at all.
He has good examples in his parents and grandparents. It makes me so happy to watch him get so into investing. I winder what his nest egg will be when he retires.
BTW, a very good video. I am waiting until 70 to start SS. Our reasoning is that it gives us a higher monthly income just in case I need long term care. Then my SS payment of inflation adjusted $4050/mo will go a long way towards paying for it. We would still have my investment income for my wife to live on.
Have a good day everyone.
Omg, THAT’S AWESOME!!! BEST NEWS EVER!! More kids need to chat about ETFs and Mutual Funds 😊
Tell your grandson that I was equally disappointed when I found out that Legos was privately held. I wanted to invest in them a handful of years back when they started targeting girls - plus my brother and I just loved them growing up.
Thanks for sharing your humanness.
Great content, love the end 😊
Great content, Erin. Two things are important to this question: 1) the discipline of saving; and 2) what standard of living do you plan for in retirement? You handled this well-- it is very personal. For me, I deferred SSA benefits until nearly 2 years after full retirement age. Between that and our investment income we can live comfortably because we are debt free. Sadly, most Americans are not good savers and are aging with too little saved in a retirement or investment account. We love to travel so it motivated us to prepare for a more income during our retirement years.
Much more realistic than most of the retirement industry. Well done. Paid off house is a significant part of this.
Thanks Jim!
Sadly almost no one will have paid off houses in the future. I expect home ownership rates to plummet while prices rise over the next 20 years. Home ownership rate will probably drop below 50% this decade.
@@nomadnationalist2776 My job is in the US.
@@ironuckles there are several ways to make this more likely. First larger down payments. Smaller priced homes and 15 year mortgages instead of 30. That also means smaller property tax and insurance bills so more dollars can go to paying down principal. Look at an amortization chart for a 15 and 30 year loan. I think you will be shocked at the difference in what percentage of the loan is paid off in 3 years.
@@jimjensen9139 I don’t know if you’ve noticed but the prices for houses, even a basic one, has increased enormously in real terms in the past decade. The cost of a mortgage has also more than doubled in just two years. Either prices will adjust back down which seems unlikely, or the USA becomes a nation of renters. Suburban houses will be cut up into apartment houses and remodeled to accommodate the new renting middle class. Personally I don’t think this is so bad, but it’s a major change compared to previous generations, and a big problem for the economy.
Great that you're educating all those willing to listen, wish I knew half as much as you do when I was your age. Luckily for me, at least I knew enough to spend less than I make, save lots, and marry well (ie. someone with a compatible money attitude). Keep doing what you're doing, it's a public service!
The first million is the hardest million to make. Reached that point when I was 40. It took a lot of hard work and dedication. Saved more than 25% a year on my income. Now in my 50s.
Home paid off. Things are a lot easier.
Well done explanation. Simple and factual. Thank U
Thanks!!
Great info. Thanks.
Thanks Lisa! 😊
I am glad I stumbled across your channel. Excellent content.
You are correct…where you live might be the biggest difference on what you need during retirement, but one thing I might have missed was the difference between needs and wants. Sometimes those two things get blurred together.
$500k in Spokane, Wa. would cover your needs if you had a paid for house and no bills. It would be a simple life, but time with family is not complicated (I hope). It is how many “wants” that you think you need that causes you to need a bigger nest egg for retirement.
Keep up the good work. Your passion and the information you share is very much appreciated.
Needs & Wants --- yes, yes, yes, I think this is the most critical part of the analysis!
I honestly knew very little about SS before watching this, so thank you for the very informative video! It actually pays out more that I thought it did & that makes me feel more confident in being able to retire comfortably when the time’s right. Been investing $400-450 a week for most of this year & will probably bump that up when I get my car paid off at the end of this year. Love this bear market where I’m basically buying 5 shares of my index fund for the same price I was paying for 4 earlier in the year!
Hi Erin,
Another excellent video! Also, I didn't realize you were a runner:)
Awesome...
Jeff
I have been a runner all my life - absolutely love it, I used to run 8 miles a day … when I started weight lifting out 8 year ago I backed it off to 3 miles for more balance 🏃♀️
Thank you for a great video!
Another great video and information. The more the better but as you said a pension and ss is enough. Everyone is different and some have planned well and others have been fortunate to land where they did. Also, I think people should plan on a house and car payment til they pass. I say this as you know house and car maintenance continues even after they are paid off. And if you can’t drive any more you will have to pay someone to drive you around. Keep smiling and sharing with the world. Love your outtakes, you are an extraordinary person.
Good point - maintenance is definitely a big factor!
And thanks for the kind words 😊
Watching your unedited clips at the end reminded me of the nights I spent rehearsing for speech class.
Most of the country costs less than the two coasts. I moved from a high cost area to a low cost area with good weather. I am just above the Florida state line and 1.5 hours from the beach.
It took 28 years to make my 1st million, then 5 years to make my second million & 6 months to get my 3rd million. I got an inheritance for that last one, the family home.
At age 45; I'm retired without a savings or 401K; although I have a pension of $7K/monthly; paid off home, and a rental property with large equity line. Cost of living is $6K/monthly; we'll be relocating abroad to reduce cost of living.
Medical bills worry me. 1.2 m and have house and cars paid off.
Erin, I just found your channel the other day and love it. Great topics and information. I am 59 and paid off my $1M home and have a small annuity. Planning to retire from my second job at age 60 with about $2M in IRAs and 401Ks. I should be able to retire with about $160K annual budget (before taxes). May have to withdraw 4.5-5% of my nest egg until SS kicks in at age 62. I should be OK if the market recovers within a year or two.
That’s awesome!!! Good luck on your money goals, welcome to the channel, I’m happy to have you 😊
Thank you, Erin. our analysis gives me comfort in that I arrived at the same conclusion for myself and the wife. The biggest factors IMO (and I am no expert) is health and lifestyle, (after savings and investments), both personal choices and responsibilities. Determine what lifestyle one desire to maintain and be responsible for your own good health. Why work ones' entire life onlyl to deplete those earnings for medical expsenses when much of them can be avoided?
Absolutely!! I want to be as healthy as I possibly can because I feel like that allows me to enjoy life as much as possible. If I don’t have your health, life isn’t often that enjoyable - speaking from personal option about the times where I have been very sick. Of course I know that issues can and do arise in healthy individuals for any number of reasons, but I want to do what I can to preserve my health 😊
@@ErinTalksMoney *Your analysis* 🙂
You can retire far younger if you move to Mexico, Central America, South America, or Southeast Asia. Your standard of living is far higher overseas. I'm returning to an overseas life in January.
Thanks!
Thank you!
Great analysis. I am 45 and my 401k savings rate has changed over the years -- so similar to your figures! No one told me how important it would be to save in my 20's so I missed that critical decade. In my 30's I saved 15% to my 401k. Today I save 5% to my 401k and 20% in a college account as my daughter started middle school this year.
My original goal in 1991 was 2.0 Million. I am at 3.6 million now. 1 retired and 1 still working. Living within your means and I did pay my sons law school laws. Failure of planning is planning to fail. Still true, however I don't think our kids will have the advantage that we did. Unfortunate.
I retired 2015 with bit more than $2M and $4M now. I started collect SS since last year at age 62. Our house has been paid off. We collect $4K a month on SS. Enough for us for basic needs. I reach savings for big items such as roof changes and replacement of car. I think I saved bit more than I need. My son will be happy.
Did your retirement fund grow organically in those last 7 years by 2 mil? Or did you continue investing in it post 2015 retirement?
Wow that's incredibly inspirational, any tips 😃
@@allisonmedina4884 I had thee houses, now two, and few acres of property. As you know how real estate value has changed. Also I am active investor but not as active as before my retirement. Also I contributed max on my 401K and Roth IRA if my earning doesn't exceed requirement. Unfortunately I have no income but some dividends. So I can't contribute any more. I actively manage my IRA and personal accounts in stock. After I retired I changed my profilio 100% stock to 50% stock and bonds. During 2020 pandemic I switched 50% my bond to stock. After mkt came up in 2021, little early, switch back to 50% bond. Middle of 2021 I sold all my bond and went to 60% cash. I have been buying SPY at 4300, 3950, 3650. When mkt came up after June sold 4300 position and bought back at 3650 again. Currently 30% cash.
If you have a cash good time to make it work. Buy SPY as market drops. My next buy point is 3400 if drops and I buy 10% at a time.
I would say your kids have an advantage. My first purchase of stock had to go through a broker, and cost $75.00 to execute. Now it's on a smart phone and free. They just have to spend less than they make, and invest the difference (hopefully 15 percent).
I have a sense of what I need for retirement. I am constantly concerned about things out of my control that could derail me from getting those numbers - illness, job loss, sub par rates of return, etc...etc...
I think the majority of the country is still not personal finance savvy. We've been transitioning from eras when somebody else handled and prepared your retirement ( company pensions, social security) to a time of greater personal reliance on retirement planning. 401ks and Roth IRAs emerged as part of that. in general, personal finance literacy in the country hasn't reached levels to be able to adequately support the independent personal finance management needs that people have. I think that plus the fact that $500k and $1MM are nice, big numbers that people have heard all of their lives is why people state those numbers as answers so often. It's doubtful that many of the people answering those surveys have done work to arrive at those answers.
I wonder, as a society, when we are putting more owness on individuals to plan their retirement if our government and school system should be doing more to educate the masses on personal finance topics to prepare society for this shift. The material is out there now. You just need to be self motivated enough to look for it and learn. Unfortunately, not everybody is.
I totally agree with you. When that shift started from companies taking care of their workers in retirement to workers needing to plan their own retirements, we needed to educate people. And all these years later, that education is still not a standardized part of the public education program, it’s really unfortunate
At 65 you willl need 20 X your post tax annual expenditures less you annual pensions, social security income etc. Example $100K of post tax expenses with $25K of annual Social Security income means $75 K of post tax income for your expenditures. $75K X 20 = $1.5 million. Don't count your home equity.
Bloopers were a nice touch.
I think they are what people like most 😂
100% agree retirement is very personal. It all depends on your life choices and expenses. I am 56 now and retired. I have $1.6 million ish
Thanks for using $50,000 income examples! So many channels only use Max amount that is way above most Americans?
Awesome videos
Thanks Darrell!
First things first. Erin, the new lipstick color looks great on you. Second - the most helpful line in this presentation is "the younger you are when you retire the more money you'll need and the older you are when you retire the less money you'll need" (or something like that.) I mean, it sounds simple but it's anything but. If you retire while you still have a kid in school and you are years away from getting medicare, there are just an insane number of variables in determining what you will need to spend in your retirement years. Seriously, if you want to retire at age 50 and you have $4M and a modest lifestyle that might not be enough. What if your child becomes disabled and needs a lot of care? What if the house you live in becomes unlivable for some reason? What if your parents cannot live on their own and need a lot of help? On and on... These FIRE people retiring at age 40 with $2M are taking a huge risk if they assume they will stay healthy and suffer no catastrophes for 50 years. I don't look at the balance in my investment account and ask myself "do I have enough to retire?" I ask myself these questions: 1. Are my parents still alive and is it possible they will need financial help? 2. Are my children still alive and is it possible they will need financial help? 3. Is my spouse still alive and is it possible he/she will need financial help?
You are so right. There are so many unknowns!! That's why I love the idea of planning with a big buffer - because what if something happens. What if one day, something totally unforeseeable comes up. Often times it won't, but statistically speaking - things happen to some people. And if it happens to you, well it. doesn't matter how small the odds were - you 100% have to deal with it and foot the bill that comes with it. As you said, perhaps it's someone needing financial assistance, maybe it's a medical issue, who knows. Best to prepare. I read in a book once, you don't need a reason to save, just save. And I though that expressed it nicely.
And good eye with the lipstick 😂
Thanks for all your great advice. You should consider putting a nice painting on your wall and something decorative on your mantle.
haha! I eventually want to hang some pictures on the wall....but with that said - I hate clutter - and to be honest, I have literally NEVER hung a single thing on any wall in my life. It's the clean freak in me lol
@@ErinTalksMoney My Mom is a professional water color artist so I grew up with paintings. Go to art galleries, walks, shows and only buy if you absolutely love it. You will know it when you see it.
I retired at 52 with less than a million (LOL, A LOT less). That was 6 years ago. Today? I have more money now than when I retired 6 years ago. I don't start collecting SS for another 5 years at the earliest. Know your expenses, live beneath your income level while working, save a bunch while you are working, and most of all, don't try and keep up with the Jones' and you too can retire early with less than a million. Or, keep working, because "they say" you need a million. I am enjoying my retirement and living quite comfortably. Oh and for all those parents who think they "need" to pay their kids way through school, no you don't. I paid my own way through college while working full time also. I graduated without any debt and had a damn good work ethic to boot. Anyone who was raised with a good work ethic can do it too. So many are just plain lazy and I blame the parents for providing too much for their kids. Let's see the comments now on this thought...
I paid my way too, and I definitely noticed a big difference between the kids who were getting a free ride and those that had to work and take out loans. They were much more thoughtful about what they were studying and were much more proactive about the future. Also, I don't get why most kids don't go to community college first and then transfer. And why do they have to go to crazy expensive schools? I think one thing parents could do is allow kids to live at home for free as long as they're going to school full time, that would be a big help without draining the parents retirement prospects.
Shooting for $5 million. But we are still a long ways from retiring. Btw my favorite line from today’s video is when you used “smack dab”. Good to hear other folks speaking the my language 😂
Gotta preserve all these fun sayings 😂 (honestly I didn’t even notice I said it)
Nice shout out to Brian & Bo at the end!
It's about cash flow from all sources. You need a cash flow goal. You might have several sources of income contributing to that goal. There is no direct relationship to a specific savings goal.
For example, if your cash flow goal is $120K/yr, and you passively own a business which provides you with $120K each year in cash flow, then you've achieved your goal with little to no savings. But combinations of Social Security, pension distributions, IRA or 401K distributions, etc, work equally well.
Eating healthy, exercising, getting good sleep. Well on your way to a long life. Oh, blooping your way through these videos, ah, that may have set you back all the way!!! 😂😂😂
Good video, Erin
$9 million. I require 400k annually. Minus out Social security without spending principle one requires a lot more than you think. ( without having to move to Florida, North Carolina or somewhere supposedly cheaper ). I would like to live in the exact same life style I live during my work life. Others what was the purpose of retiring. You should live as well or better in retirement ( baring health issues).
I do wonder if social security will be funded at the time I retire but I am confident that I'll have plenty invested to support myself regardless.
We are going out with anywhere from 800K to 1.3 Mill. Will be easy but you need to know your expenses. We need to have our investments cover us for 9 to 10 years. Then we turn on SS we will have 4500 combined SS income based on estimates in todays dollars and 4% COLA starting at 62. That number is 1000 more than we spend today. By the time we get there, COLAs will make it more. Either way, no worries.
A good resource that covers this very topics is Wes Moss and his Your Can Retire Sooner Than You Think book. He also has another book about What The Happiest Retires Know. He also has a TH-cam channel but he's not too active on here.
LOL... my wife and I are 37 and 36... aiming for $7million... Not even gonna think about getting a penny from SS. Whatever we get is a bonus.
$1 million will not even buy a nice house in California.
True, true
Dont live in California
Obviously there are a lot of variables, but I think the biggest one is required expenses in retirement. Someone with no debt at retirement probably could live comfortably with 500k.
Im definitely shooting for ~2.5 million of today's dollars at retirement but I also want to semi retire sometime in my late 50s. All this subject to change over the next 30 years 😅
I love that! And, you added a hugely important statement, 'all of this is subject to change'! So, so true! 😊
Pay too much attention to “FIRE” can be stressful.
It depents on your spendings. If you live a frugal life, or you are a big spender.
How much do you need to "comfortably" retire? Obviously It depends on what you mean by comfortably. I think regular retirement age with full Social Security would take about $1M for $40k from assets + $20k from social security.
EDIT: I absolutely agree that "comfortable" can be less than 1M in assets!
No fixed asset expenses makes this a lot easier. Non-volatile fixed income also makes this easier. We’re around 6.5 million and it’s equivalent to a little over 100 years of expenses. So it can get a bit outsized as your expenses drop. Also the outtake “I’m missing the Money Guy” 😂 gold.
That’s awesome, congrats!!!! 👏👏👏
Great video! I'm looking at $2.5M, plus all retirements, disability, SS, Etc.
As for housing, I'll be part of that 19% and smile while doing so. 😂 @ 2.25%, my mortgage payment will be pennies after a few more years of inflation.
Hahaha!
In order for me to answer this, many assumptions have to be made:
Age of retirement?
Expense needs?
Debt free?
Life Style? Travel the world for example?
For me: Retire at 62-65 (now 57), I am debt free, I need about $3200 (in today's dollars) per month to retire. And am NOT travelling the world. Others have said, and I agree. For me being single, $500K is enough.
The more the amount you have, the better you could stand the stress from the markets like the one we have now. I had $1.2m when I retired, and it went down 20% this year, so I still have $1m. If it went down 50%, I would still have $500k; I would still be able to put food on the table. But if you had $500k that went down to $250k, or $250k that went down to $125k, that would be a more precarious situation. It's about your "stress appetite," and not just about "what is enough to retire on" or not.
Good point
I've never cared about having a million dollars. And many people don't have the means to achieve it. All you have to have for retirement is "enough" based on your lifestyle.
💯 percent!
Erin! You are SUCH A BABE!
Also, thank you for the informative content.
She's got the looks and the brains! I'm melting.😅😅
LOL, she is hot! And the bloopers at the end are even hotter
I get a pension but I'm unsure if it will be there when I'm ready to retire so I'm doing my 403b and ROTH IRA plus a brokerage
For an individual I think $1 Million would suffice depending on lifestyle. However, for most couples I believe a minimum of $2 Million should be the magic number to enjoy retirement. Taking 4% out annually and letting the rest grow in some form of investment portfolio while also taking social security.
LOL, keep drinking the koolaid. Single, I retired 6 years ago with less than a million. I'm doing just fine and quite comfortable. I have more now than when I retired. I live within my means unlike most of the US. Gotta keep up with them Jones' ya know, more expensive houses, luxury vehicles every year, etc etc etc.
How much of that polling is cope though?
Same thing with the adage, "You'll spend less in retirement." Is that because people actually want to spend less, or because they have to make due with spending less because that's all they had?
The one thing I tell my young colleagues, if you want to have a clue about how much you'll need in retirement, you need to be tracking your spend now. Having a clear understanding of where your money goes today is one of the few concrete things you can do right now to better help you estimate what you might want to spend in retirement.
Great tip, tracking your spending is so easy to do and definitely helps you better prepare
Mid 6 figures per annum so I don't have to compromise lifestyle when we retire. Gonna need to have a decent capital base to generate that cash flow. Not going to rely on retirement benefits.
We are not rich. We both retired at 55. Are nice home is paid for. Low property taxes here in NC. No kids. At 62 we both started SS. We both understood the importance of working alot during are working careers. I worked all the overtime I could. Lots of it. Maxed out are 401-k programs. My SS check each month at 62 is $2343.00. My wife a little less. We do just fine. We don't have to touch are investments. People don't seem to realize that you must work. And alot to get a decent SS check. It's not free. Work 2 jobs if you have to. I did. Start early and get the points under your belt for a decent SS check. People make choices. We made ours. Plenty of jobs out there. Work 2.
How about this theory: If I think I will live for 30 more years, and can live on 2,500k a month, 2.5k x 360 months means I need to have 900,000 saved. The interest that invested money makes will be gravy, and inflation will be heartburn. That b where I at!
I was under the impression that your SS benefits would be decreased by the Fed if they knew you had/ and could withdraw investment funds or pension benefits.
Lifting weights? I always suspected you were buff. Health is at least as important as wealth for a great life, keep it up and WTG.
It has more to do with a secure disposable income. If it keeps up with inflation and a little more your ok.
Financially smart and easy on the eyes. How you doin - Joey (Friends)
Haha, thanks! There is a Mr Erin Talks Money (my hubby) who also uses that line on my all the time 😊 welcome to the channel!!
Nice content, but you should reduce those numbers by at least 20% because of taxes
Less than $500k? They clearly don't know the US healthcare system.
obamanation care takes care of it if you retire early. At least it does for me. Love all you folks who keep working and paying taxes so I can get my health insurance for $105/month, no deductible for the year too.
75 percent pension, 1 million combined Roth 457b and Roth IRA and 60k-75k HSA by the time I’m 55 and I’ll be golden!
I set it up so that I will have 130K a year for the first seven years of retirement as we will be healthy and will do much more travel, then settle into around 90K from age 72 till 84, we should have plenty to deal with assisted living if necessary. We will both take our SS at 66.7 this is why I have set up 750K in IRAs and Roth accounts and 500K in cash and other accounts that I can use until we hit SS. Not sure if we will ever sell our house so that might end up being our kid's problem. But if we need a bundle of money we could always move and grab the cash.
I like planning different amount for different ages - a lot of people don’t consider that! Thanks so much for sharing Philip 🙏
What you need is soley based on what you will spend. Of all the retirees I have spoken with, none of them spend more money at 80 vs 70. None of those in their 90’s spend more than those in their 80’s. None of them had anywhere near $1m. They all felt they had “excess cash” when they hit their 70’s. While many people point to “healthcare” as their biggest worry, numerous studies have show that if you are 65, the average annual medical spend is around $6500 per couple per year, over 30 years. While most people will never see an assisted living facility, my mom did. For 14 months. $5000/month. In 2009-2010. Typically you are not in an assisted living facility very long. As for my mom, she was in a brand new home, in the wing that was for those who were mobile. She was on Medicaid as I sold off my parents assets after dad passed. They stayed in their house through that, and mom would have remained but she fell and needed physical therapy to get back walking. The new home was also a physical therapy center and what was a 7 week stint turned permanent.
Finally, remember….any SS forecast does not include COLA. So what they state you get at 67 is under what you will get unless you are 67 today. The calculator and SS spreadsheet is not indexed for inflation.
Very thorough video and really gives people an opportunity to understand what they truly will need. Well done!
Yeah for most people a million invested will be just fine when you factor in SS :). I'm aiming for 2.5 million though.
Nice!! You got this!!
Please review the various SS amounts per age of retirement and also spousal amounts. I have a wife that will probably start to draw at 62 years old (which will be 6 to 9 years before before I will retire at or near full age). We plan to stick 100% of her SS in retirement savings until I also retire. Can you tell me how much will her amount change once I retire?
This is from a group of people who plan to work into their 60s and 70s. Sure $500,000 will be fine. For the people who want to retire in their 50s, they will need much more.
Smart lady!
when you factor in many only have social security as a source of retirement income, a 500K bag of cash would be very welcome. But the question is too vague, the better question is what will YOUR (and spouse) monthly expenses be when you start retirement.
Need vs want is different.
$2M is what I want. No RE.
62 has the downfall of not being able to earn a 6 figure income. At 67, I will get the max SS income and a 6 figure income.
$50-60k a years equals nest egg of 1.5 million. That’s my goal
Good luck!
There is no one answer. We all have different situation. First you must know your yearly expenses in your retirement years. This is the hard part. In my case it was easy. I kept a budget every year so I knew what my expenses will be when I retire. Your retirement expenses each year is the amount of money you need each year to retire. Again, in my case, I just made sure that my pension and SS benefits are equal or more than my expenses. Nowadays, pensions have being replaced by 401k's and other retirement investments.
First, what an incredibly articulate and attractive lady. Past this; yes, all said. Scenarios and people are different. SS likely helps out quite a bit; but that all depends on where you land re: AIME and the bend points. -And yes, I was a pension specialst for the FDIC for 33 years, been there and done that on the Hill re: Fed pensions and SS. I digress. If your house is paid for and you have a pension (let's even say a fed pension at $9k per month; right ?).... You should be good-to-go across the board. Rock that TSP (fed version of a 401k) for the kids. Rock it even more if you work as the Treasurer for a bank in your retirement). This all stated; and assuming you are "average"..... Then, yes. Half a mil to a mil in your 401k should be your bogey. Bare, bare minimum of a couple hundred $k. Peace.
I didn't have access to a 401k and that magic "free money" match until I was in my late 30's, so I was well behind the curve in compound savings. I did start my own IRA in my late 20's but could only afford to invest small amounts periodically. It was better than nothing. Now I have that 401k working for me and I try to invest as much as I can each month to catch up. $1MM is looking out of reach now that I'm in my mid 50's, but I've adjusted my target to $500K, and that is doable barring a complete market meltdown in the next decade. Good information here, thanks.
I have modest lifestyle, 6-figure income, a pension, 401K, Roth IRA, emergency fund, trading account, properties that can cashflow, a side anytime business, and 0 unsecured debt. I'm about 15yrs from retirement, and coasting instead of worrying.
Get your finances squared away. Your stress level will tend to drop.
67 would be like 1900 for someone making 50k you should probably use the same criteria for your examples why change from average ss to max just makes it confusing
Right now I make $1035 a month in dividend stocks. So saving is not enough, I started to invest 20 years ago.
First of all, you should be debt free - NO student loan, NO mortgage, No car payment and No credit card payment before the age of 45. Otherwisem it is difficult to save anything for retirement. $3M in Net wealth excluding primary residence at the age of 65. If someone decide to retire 10 years early, add another $3M.
I have $350-450K depending on. MARKET SWINGS? But will have a pension and Soc Sec will help? How do we calculate our number icluding these other sources?
Creat an account with the Social Security Administration…that will show you your expected benefits. Your employer should be able to give you details on your pension
For American's, after going to the SSA website and getting the estimated amount paid for years worked, there should be either a formula for pension available in which numbers would need to be entered and manually calculated, or the entity that manages the pension fund may have a calculator available; make sure the number is for monthly payment. Then, add the SSA number to the pension number, and that will give the monthly estimated payout. Then, multiply the retirement accounts by .04 and divide by 12 (monthly) and get the amount that the retirement account will yield. Add that to the SSA and pension sum and that's the monthly income.
I could survive on $48,500 a year which would be 500k plus social security. Fortunately I've saved and invested and I think I'm on track to retire on about $70k per year, anything more is leeway, just in case...
That’s awesome! Congrats!
$7.5 million
$500K excluded house is enough if you collect SS for most people.