Posted on 03/12/2015 7:52:29 AM PDT by SeekAndFind
RE: I could sock away 50k every year if I made that money.
I gather you don’t live in NYC, San Francisco or Chicago...
I don’t think one size fit all when it comes to how much you “need” for retirement.
However, there are some things you can do that will help.
No debt. You should get out of debt and stay out of debt. Few calculate how much of their money goes to paying interest. Trust me, it is a lot. In our mid 30s we realized debt was eating us alive. It took a few years but we became debt free. The amazing things is by cutting back our spending (part of the getting out of debt process) Gave us more disposable income, which we put into savings.
Pay off your home. See above. We paid off a 30 year mortgage in 20 years. The saving of the mortgage payment went into savings.
With house paid for, and at 65 medicare, your two biggest expenses are covered.
While we do not have to, my wife and I could live on our Social Security.
RE: No debt. You should get out of debt and stay out of debt. Few calculate how much of their money goes to paying interest.
That would eliminate most Americans who own a home and pay mortgages then.
It is important to realize that investments are not actually money.
If you own, for example, 100 shares of Dominion Resources, you are the part-owner of a bunch of utility poles, wires, generating plants, and trucks. This stuff is not going to lose value, although its market price may fluctuate.
Having noted that certain staples in life have roughly doubled in price over the last several years, I sincerely doubt that this model is at all valid today.
Specifically, Beef, Bread, Eggs and Milk have done this along with other produces as seen at the local grocery store(s).
I would have noted gasoline as well, but the price is currently fluctuating too much to say it is now double what is was -although I note that several States are looking to increase the taxes on it to gouge even more of our income.
Nope : )
My uncle who lived in Minnesota moved from the Minneapolis area to Rochester to a farm. He worked at IDS Investors Diversified Service — now Ameriprise Financial at the time and made 6 figures back in the 1970’s. He would rather drive the 90 miles to the city just so he could live on the farm.
I live in the Los Angeles area about 30 miles north. Still too expensive but I could save the 50k (maybe less) if I had no wife working.
It is amazing how much a little can save, especially early in a mortgage. Put extra principal in every payment--even if it is only 20 bucks. It decreases the interest all the way to the last payment, which can come a couple of years sooner with even modest additions every month.
I guess the assumption is that you would continue to live the same lifestyle after retirement (and also only live the average number of years).
Now, a 40-year old making $0 per year is in great shape... no matter what the multiplier is he would still only need $0 in savings!
If you are 65 you need to have saved $1.74M? That’s preposterous and not one on 10,000 will have been able to do that.
If that figure includes your equity in your home it could make a difference. It's not clear what they mean by "savings".
Notice state employees’ salary is so low it’s not even on the chart.
I am so screwed.
I retired six years ago. DW is retiring next year.
I don’t think the table takes into account pensions and SS payments. It hard to tell from just the table.
1. If you are fortunate enough to have both, you can capitalize the expected payments and substantially reduce the amount you need to personally have.
2. From the position of been there, done that, I can tell you that the more invested savings you have, the better when you retire. DW and I lived well below our means, enduring the derision of relatives, and ex-spouses. Now that we are retired, the peace of mind that we have is well worth the sacrifices we made.
-PJ
RE: Teresa Ghilarducci, the woman who wants to take away your 401k, says you need 20X your annual salary for retirement.
So, if they take away our 401K, how do they expect anyone to reach 20X annual salary?
Are they going to print it for everyone? /s
Pay off your mortgage (that was my second point)
Is this all assets or just fungible cash equivlents (savings/stocks/bonds)?
To clarify my previous post
By the time you wish to retire, you should not have any debts and that includes a mortgage and car payments.
These should be your goals.
I understand not everyone will meet those goals, but if you still owe money when you are no longer working, life is going to be a lot harder then if you didn’t. That is reality
She says that 401k's are just a rich get richer scheme because "average" people aren't saving enough. So her solution is to do away with 401k's and force everyone to save in government securities.
Silly me, I chose to forego the jumbo flat screen TV in every room.
-PJ
I am soooo screwed......
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