Level of income req'd in retirement? - Fiberglass RV


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Old 05-15-2015, 09:53 PM   #1
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Level of income req'd in retirement?

Discussions on this subject with my former Supervisor have left me scratching my head. He claims to believe he will need MORE money coming in during retirement than during his working years because he wants to travel. Personally, I think it is a head-in-sand cop out on his part to keep him from making real decisions about retirement. As long as it is all too hard and the numbers impossible to nail down he can't possibly be expected to make a plan for his future.

I know that what "retirement" looks like is a very personal thing for each of us. Therefore it may be impossible to make across the board conclusions about what percentage of "employed" annual income we will each need to fund a year of retirement. But what are your expectations of your needs post retirement compared to now (or you may already know being retired)?
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Old 05-15-2015, 09:58 PM   #2
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Retirement is about comfort level and that's really personal for each one of us. Too, how much debt is someone taking into retirement? Credit card, mortgage, etc.

My plan is to be debt free and make certain my expenses are lower than my income.

At this point, I'm so very tired of working if I need to grocery shop at the Dollar store and live on Vienna Sausage and beans for the rest of my life, I'd be happy
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Old 05-15-2015, 10:03 PM   #3
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If you retire debt free, you will be able to live quite well on your pension (s ), assuming you have them.
If you still have a mortgage and buy a new F250 just before retirement, you better have a lot of savings and investments.
Traveling down the Seine in one of those riverboats will cost you about $20,000, plus the airfare to Europe. Camping in the desert with a tent and a 24 pack of warm Buds is fairly cheap. Really depends on assets and expectations.
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Old 05-15-2015, 10:19 PM   #4
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I attended several retirement seminar before I retired . The first rule that was often repeated was that you should have at least 8 times your annual income in savings to supplement your social security. That is assuming you wish to maintain the same standard of living in your retirement years. The second rule was to eliminate any debt before you retire.
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Old 05-15-2015, 10:42 PM   #5
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We have small pensions, no debts, a car waiting for when the current one dies and a Trillium. We can eat, buy gas, maintain our home etc fairly easily. It would be a whole different scene if we wanted to eat out wearing fancy clothing or pull a big camper or go on expensive holidays!
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Old 05-15-2015, 11:51 PM   #6
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Check out rvsue and her canine crew | Living on less and enjoying life more

Sue has a spread sheet of all expenses over several years. It amazed me how cheaply one can live.
Dave & Paula
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Old 05-16-2015, 01:18 AM   #7
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Originally Posted by Timber Wolf View Post
Discussions on this subject with my former Supervisor have left me scratching my head. He claims to believe he will need MORE money coming in during retirement than during his working years because he wants to travel. Personally, I think it is a head-in-sand cop out on his part to keep him from making real decisions about retirement. As long as it is all too hard and the numbers impossible to nail down he can't possibly be expected to make a plan for his future.

I know that what "retirement" looks like is a very personal thing for each of us. Therefore it may be impossible to make across the board conclusions about what percentage of "employed" annual income we will each need to fund a year of retirement. But what are your expectations of your needs post retirement compared to now (or you may already know being retired)?
Great question and comment TW and one I heard for 30 years at work. The older employees kept saying they would retire when the "numbers" were right but really couldn't put it into words and numbers. I think you're right about your old boss. You really don't need the same income, close is good though unless you are really going to change your lifestyle. A % depends on what you need to pay bills, now and in the future and what you need to have as a cushion to be comfortable later. Take advantage of the companies deferred compensation programs, 401's ect early in your career. The last eight years of Saturdays have been great. Not sure if this answers any of your concerns but it really isn't rocket science, just numbers and some planning.
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Old 05-16-2015, 01:52 AM   #8
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When you get to the age where you are seriously thinking about retirement, it's probably too late.
The main thing is to retire without debt.
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Old 05-16-2015, 02:52 AM   #9
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I believe most folks have no idea how much they need to retire. They save what they can without scrimping on their current lifestyle.

Unlike anyone I knew, I spent a good amount of time coming up with how much nest egg I needed to retire. Looking back at it now, I came up with my first set of figures about 20 years before I retired, the initial figures ended up being pretty close to the ending ones.

At about 55 we figured out a Need and a Want figure by keeping track of spending for about 2 years, retired when I could do the Want. The Want figure happened to be pretty much our average spending before retiring. Push comes to shove we can fall back to the Need figure. We've always been pretty frugal, mostly out of necessity, in the later working years spending was a good deal less then income so saving wasn't difficult.

To answer your question, 2 years into retirement our spending levels are about the same as before. What we spend it on has changed some. Ask again in 20 years and I'll tell you how it worked out.
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Old 05-16-2015, 04:28 AM   #10
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Originally Posted by Glenn Baglo View Post
When you get to the age where you are seriously thinking about retirement, it's probably too late.
The main thing is to retire without debt.
Totally correct Glenn and glad I started early on. One thing I did at work was to talk to all the newbies about starting in our deferred comp system as soon as they could. Most argued they couldn't afford it...what? $10 a payday? Bring a lunch once a week and not do the fast food thing. The bottom line that got their attention was when I told them in 30 years when they did retire they would remember my talk with them and either thank or cuss me for following through or not. Gave the same info to my kids and they were surprised at what they had on account in just two years.
MMMM, some times kids listen
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Old 05-16-2015, 05:57 AM   #11
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Originally Posted by Timber Wolf View Post
Discussions on this subject with my former Supervisor have left me scratching my head. He claims to believe he will need MORE money coming in during retirement than during his working years because he wants to travel. Personally, I think it is a head-in-sand cop out on his part to keep him from making real decisions about retirement. As long as it is all too hard and the numbers impossible to nail down he can't possibly be expected to make a plan for his future.

I know that what "retirement" looks like is a very personal thing for each of us. Therefore it may be impossible to make across the board conclusions about what percentage of "employed" annual income we will each need to fund a year of retirement. But what are your expectations of your needs post retirement compared to now (or you may already know being retired)?
Tim,
The answer of course "it depends".

If you plan on traveling in a trailer it can be a low cost adventure or it can be expensive.

As an experiment I suggest the following. It's easy and quick, easier of you have a smart phone because there are apps that can help you. For the next year write down everything you spend by category, food, fuel, mortgage,,,,, I do mean everything.

At the end of the 3 months (and again at 6 and 12 months) total up each category, see where your money went and determine which expenses will disappear or be reduced. This is a good lesson in where does it all go. A great starting point for understanding the use of your money. (If you're a user of cigarettes, alcohol, a gambler...keep track of those as a category..things you could absolutely eliminate or dramatically reduce..don't drop them into the food categoty)

Certainly you want to clear all debt. You want to determine what kind of traveler you want to be, there's expensive RVing and inexpensive RVing, a whole other topic. Personally I thing we're in the middle.

If you're traveling with another person, generating a common view of money is important. Ginny is very careful with money.

Choosing cost effective equipment, reliable trailer and tow vehicle. A tow vehicle that can do 65 up a steep grade may be nice..but also expensive to buy and drive... when you're retired do you really care if it takes five more minutes to get up a hill.

There's much to consider but the real starting point is understanding how you handle money and where it goes. Pay close attention to your spending for a year, it's a great life lesson.

By the wat we spend dramatically less than when we worked..
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Old 05-16-2015, 06:36 AM   #12
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I've been retired 25 years. My pension and social security total about what I earned my last year employed. I have to make mandated withdrawals from my IRA but don't need it. My wife passed so around 40% of income dropped. I have no debts beyond current expenses. Judicious spending is so very important. So is planning and investing during working years.
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Old 05-16-2015, 08:10 AM   #13
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The hard part is figuring out when you will die. My money will probably run out when I am in my early 80's, if I last that long.

The other big problem is health care, including long term care. The cost of these goes up faster than increase in Social Security, so more and more of your pension or savings will be used every year for healthcare.
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Old 05-16-2015, 08:20 AM   #14
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The hard part is figuring out when you will die. My money will probably run out when I am in my early 80's, if I last that long.

The other big problem is health care, including long term care. The cost of these goes up faster than increase in Social Security, so more and more of your pension or savings will be used every year for healthcare.
We were 58 and had no 'gift' insurance until we reached Medicare. Even that is not inexpensive. Healthcare has turned out not to be an issue, partially because we've got healthier. I really hope I out live my money, that would be a good deal.

If you spend you're time worrying about all the negatives, you'll keep working. I know plenty of people who work until they nearly die. Life is short enough without limiting living. I rather be poor when I'm old than when I can actually be doing something.
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