how do you know when you have enough money to retire?

[Dancing Fire]

the older chinese generation i know work until the day they die,been saving money all their lives and the kids just waiting to inherit the parent''s money, so they can retire.

 

[Mara]

DF, I swear you ask the most random questions! you need your own forum in order to conduct the random discussion topic of the day, watching it play out is like watching Montel...

they say for retirement to expect to require something like your annual household salary each year for the rest of your life (aka ~77 life expectancy age now). so for example if you retire at 60, and expect to live to around 80 and household salary is about $150k per year, you would need about $3m to retire and continue to enjoy same standard of living...

not to mention making sure you have good health insurance and/or factoring that into your requirements if you do not or already have a chronic illness, etc.

some say they think they will spend less after retirement so they may not need as much, but articles i have read note that you may want to travel, and not have to skimp on life experiences, esp if you already enjoy a higher standard of living while you are working, what makes you think you will spend less when you have all that time off and nothing to do but what you enjoy, hobbies or travel?

 

[tanuki]

This is an important question to ask yourself because my parents essentially "oversaved" for their retirement.

What I mean by this is that they constantly saved to the point that we never took vacations as a family when I was little, we acted like buying the slightest discretionary item was a major purchase, we ate the store brand stale food instead of buying something that tasted better, and we kids sort of felt like we didn''t belong because none of our friends had parents that lived that way. There was a lot of anxiety that we could have avoided with the right plan.

Now they are elderly and have lots of money in the bank but unfortunately they can''t enjoy it because of their health. Maybe it would have been better to have loosened up the purse strings a little when the kids were young and taken that trip to the beach in the summer. Maybe we should have joined the subdivision pool and tennis club instead of sitting around all summer with nothing much to do. It''s strange to think back and realize we could have if they had only knew.

I have already been on another thread raving about how great it is to have financial software.

My parents never had any access to a calculator to tell them that. So they lived in fear of running out of money when they were not at much at risk for that. I would be happy to inherit less and been able to see my parents enjoy themselves.

I am comfortable that even with conservative estimates of how much interest I expect to earn that I am saving enough. Some years we have had to forgo a vacation to keep the savings on track and I''m glad I knew that we had to do that. Other years we had enough to save for retirement and enjoy a few of life''s luxuries.

 

[sjz]

Date: 3/19/2005 5:10:26 PM
Author: tanuki
This is an important question to ask yourself because my parents essentially ''oversaved'' for their retirement.

What I mean by this is that they constantly saved to the point that we never took vacations as a family when I was little, we acted like buying the slightest discretionary item was a major purchase, we ate the store brand stale food instead of buying something that tasted better, and we kids sort of felt like we didn''t belong because none of our friends had parents that lived that way. There was a lot of anxiety that we could have avoided with the right plan.

Now they are elderly and have lots of money in the bank but unfortunately they can''t enjoy it because of their health. Maybe it would have been better to have loosened up the purse strings a little when the kids were young and taken that trip to the beach in the summer. Maybe we should have joined the subdivision pool and tennis club instead of sitting around all summer with nothing much to do. It''s strange to think back and realize we could have if they had only knew.

My grandparents and my in-laws did the very same thing. They literally worked until they were unable to work because their health was so bad, or until they died. None of them got the chance to enjoy retirement. And in the case of my in-laws, nearly all the money that they had managed to save got swallowed up with medical expenses.


I think that you can pretty safely retire when you are debt-free (in other words, no mortgages or big loans to pay off), and you can comfortably live off of the interest from your savings and/or investments. My parents are retired, and both have health problems that pretty much take all of the money from their retirement. And neither one of them gets any social security. Thankfully, they own some farm ground and my uncle farms it for them. They have the interest money and income generated by the farm to help them get by.

My husband is self-emloyed. He contracts himself out to emergency rooms through a third party agency. He pays into social security, as did I. We both have IRA''s. We both have pension plans. And we have other money invested in a few other ways. We have a state college plan in Illinois that we''ve been putting money into for our kids, and after next year, both of them will have their college educations paid for through that. Graduate school is another story...

. We just built our home 2 1/2 years ago, and my husband plans to have our mortage paid off in the next 5 years. After both of our kids have left the nest, we plan to sell this one and either buy a smaller house or a condo. I''d actually like to move to England after the kids are grown, but who knows?

My husband''s goal is to be able to semi-retire in the next 10-12 years. He thinks that''s about all the longer he is going to be able to handle the daily grind of 12 hour per day ER shifts. He is also an associate professor at the University of Illinois School of Medicine, so he is thinking maybe when he gives up ER work, he''s going to do more teaching. He also used to be a medical correspondent for a local news station. He might take that up again, as well. I can never really see my husband retiring completely. I think he''d go nuts! And drive me nuts right along with him.

As for me, I''d like to get back into nursing again one day. But probably not until my kids are grown. I am too essential to their social and academic lives right now...lol. Besides, I keep myself so busy doing non-paying jobs, I don''t know when I''d have time to earn an honest paycheck. Besides, I''m hoping by the time I''m of retirement age, I''ll have some grandbabies to keep me busy.

 

[sjz]

Date: 3/19/2005 5

4:28 PM
Author: Mara
DF, I swear you ask the most random questions! you need your own forum in order to conduct the random discussion topic of the day, watching it play out is like watching Montel...

But isn't it fun to discuss some of these things, and hear other people's differing perspectives on all the issues? I think it's fascinating! Some of topics are things that normally aren't discussed in social situations with friends. At least not without getting into heated debates...lol.

I'ts kind of nice to be able to discuss and share experiences and thoughts without worrying about offending anybody. At least I HOPE I don't offend anyone...I can be sort of be outspoken, I know...

 

[Dancing Fire]

Date: 3/19/2005 5

4:28 PM
Author: Mara
DF, I swear you ask the most random questions! you need your own forum in order to conduct the random discussion topic of the day, watching it play out is like watching Montel...

they say for retirement to expect to require something like your annual household salary each year for the rest of your life (aka ~77 life expectancy age now). so for example if you retire at 60, and expect to live to around 80 and household salary is about $150k per year, you would need about $3m to retire and continue to enjoy same standard of living...

not to mention making sure you have good health insurance and/or factoring that into your requirements if you do not or already have a chronic illness, etc.

some say they think they will spend less after retirement so they may not need as much, but articles i have read note that you may want to travel, and not have to skimp on life experiences, esp if you already enjoy a higher standard of living while you are working, what makes you think you will spend less when you have all that time off and nothing to do but what you enjoy, hobbies or travel?

my biggest challenge now is to have enough money to put 2 kids through college,when they become independent, i pay less phone bills,auto insurance

,no more jeans to buy,no more buying (25) pairs of sneakers every yr

,etc....and the list go''s on.i know i''ll spend less as i get older.i do have expensive hobbies but not much of a traveler.

 

[movie zombie]

there is a tendency for those coming out of the Great Depression and those born to them to not trust that the future will provide for them. so they worked hard. they and their families did without luxuries but the basics were always provided for. Social Security did not exist, there were no 401k''s, IRA''s, etc. to insure your old age would not be complete destitution required pinching those pennies. parents did not want to be a burden to their children in their later years....and possibly didn''t trust that their children would have the means and/or inclination to provide for their aged parents. prior to WWII, homeownership was not as wide spread as it is now. being able to afford a home was not just the American dream, it was a form of savings. having your mortage paid for by the time you retired meant you were set. different time, different world. they did the best they could.

peace, movie zombie,

ps i saw a documentary regarding the Great Depression and even though i had heard stories from my parents, i was not prepared for 12 year olds being told by their parents that they could not feed them and that the 12 year old needed to leave home and find his way in the world.

 

[Jennifer5973]

It is a difficult balance--enjoying life as you live it and saving for the future. Retirement seems so far off but we know it''s time to get really serious and start banking more than we spend.

But that''s the key--banking more than we spend. We work at having our vices but meeting our financial and savings goals. I think the balance will tip more towards retirment/savings as we get older but I can''t live so constricted that I can''t enjoy today...how would we drag ourselves to work everyday...just on the promise of a tomorrow that might never come? I mean, I like my job, but come on!

 

[Dancing Fire]

Date: 3/19/2005 10:25

5 PM
Author: Jennifer5973
It is a difficult balance--enjoying life as you live it and saving for the future. Retirement seems so far off but we know it''s time to get really serious and start banking more than we spend.

But that''s the key--banking more than we spend. We work at having our vices but meeting our financial and savings goals. I think the balance will tip more towards retirment/savings as we get older but I can''t live so constricted that I can''t enjoy today...how would we drag ourselves to work everyday...just on the promise of a tomorrow that might never come? I mean, I like my job, but come on!

i agree with you,got to enjoy life buy what you could afford without borrowing.i don''t want to be broke as i get older but,you can''t take with you.somebody will spend your money after you''re gone.