https://fortune.com/2020/01/26/how-much-to-save-for-retirement-advice/amp/ =============================== Get the PDF version of my Tax Bomb book …

34 replies
  1. Heat Gat
    Heat Gat says:

    I have been maxing out 401k as well as my employers match since I was 30. If I work until 65 and continue to max out and do the catch-up contributions at 50 I should have north of $3-4 million in that account. That is based on a 8-10% rate of return. Which is very obtainable. I also have private brokerage accounts that I have invested in. I need to diversify in order to grow that. That means taking on another investment property, or a business. My comment is not here to brag, but to state what my goal is. My goal is not to turn the possible millions I will have into buying useless things. No, instead I will live off of the 3-4% rule and hopefully my children have learned the lessons of hard work and savings in order to continue to build off of what their father has done.

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  2. Columbus1152
    Columbus1152 says:

    All you have to do is look at the demographics of Fortune magazine, high income middle aged professionals. All the reader knows is, they're busting their ass to keep up with the Jonses, and the Jones are struggling just as much to have the nice McMansion in the burbs, two BMW's in the garage, and vacations to Maui every year. I'm pretty sure most people in middle age aren't focused on their life of 15- 20 years from now. Until you really assess expenses and income in retirement, their long term plan relies on the advice of a financial advisor who makes a living on your investments. Funny how these articles geared towards high income earners NEVER mention SS, as if that's only for the peons.

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  3. Big Red
    Big Red says:

    $1million retirement has been thrown around for decades and if you believe in then it’s not logical to give it some kind of an inflation adjustment, everybody has their own number ($) when it comes to how will make their retirement a good one.

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  4. Crusty Rusty
    Crusty Rusty says:

    Granted, I get Tricare in 3 years so that makes a big difference, but once the mortgage is paid off, we can live on 2K a month, including blow money. That is below my PIA. I think we'll do OK, although I wouldn't turn down 3M…

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  5. Arisgod27
    Arisgod27 says:

    So, if anything this article tells you move to another country. Don't live like poor person, work until your health goes just so you can have some number in a trading account or bank. For example 285,000 in medical costs above what medicare/insurance covers…If true that is NUTS. I am from Greece originally and prescription drugs (and not the generic stuff) cost 70% less in Europe on average than here. Doctors cost a lot less also. It is nuts how much you spend here on medical costs.

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  6. tomj528
    tomj528 says:

    YIKES! I don't know about anyone else but sitting on a beach gets old real quick for me after 30 minutes or so. That $258k doesn't scare me either as over a 20 year retirement it becomes an affordable $14,250/year and even that is most likely overstated. Besides, I'd rather go early leaving a good looking corpse with clean underwear rather than hit my 90's in a nursing home. The ability to live comfortably on social security alone means that any investment distributions are all fun money and it's easy to imagine the lavish lifestyle you can enjoy with that $30k – $40k/year much less the one a frugal guy like me can come up with ;). My version of the beach would consist of an off lease 3 year old high roof van self-converted to a camper van, a gourmet picnic, surf casting, a couple of kites (fun!) and a couple of camp chairs/table all toted in our folding wagon. Bonus points for going in the off season to have the entire beach to ourselves to enjoy walking the shore and finding shells. Better yet, drive down to the Gulf for a couple of months in a just off beach rental and maybe bring our fishing boat. Perhaps a golfing vacation in Myrtle Beach at a rock bottom price and dining out is incredibly inexpensive too. I've had some really nice trips down there in February when I was younger. There are so many things to do and see right here in America and traveling can be relatively inexpensive and enjoyable without a schedule and reservations.

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  7. snakechrmr
    snakechrmr says:

    Somebody should stop this foolishness. I retired in Mar '13 at 62 with a 7 year old Harley (bought new with cash), new inexpensive high mpg car (bought 2 months earlier for cash), a small ($400/mo) pension, nearly free healthcare and about $30K in cash. Only I moved to Europe to work my last years and retire.
    Started SS at 64 and here I sit 7 years later after moving 2 years ago to eastern Europe with SS, a small pension, 13 year old Harley (128,000 miles), a 7 year old inexpensive car, inexpensive comprehensive health insurance, and about $20K in cash.

    I don't budget, travel extensively (rode the scooter 4200 miles on a solo trip through 7 countries last Oct) and eat mostly in restaurants. My expenses last month (rent, water, elec, internet, trash, cell phone, medical insurance) were under $400 US.

    I do invest in 2 things every month. One bottle of Jack Daniels and Harley parts.

    You guys worry about saving more, more, more and I'll keep enjoying retirement riding around European secondary roads searching out forgotten castles, ruins, art, museums, history and cultures.

    $2 mil and above? Hahahahahahahahah………..

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  8. Tyrone Powell
    Tyrone Powell says:

    Thanks Josh, those advisors just want you to keep your hard earned cash with them and THEY are the ones with $4-$5 million sipping champagne on white Sandy beaches! Meantime we're panicking how to afford healthcare and necessities of life.

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  9. don mountford
    don mountford says:

    3 million? Just going on the 4% principle that would be $120k! Average household income is less than half that. So the article is saying you need to spend 2x more in retirement than working years, raising children etc? Crazy!

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  10. Dick Longmire
    Dick Longmire says:

    All this depends on the life style you want in retirement. My issue was like many guys out there, I tend to have expensive hobbies but have figured ways to work around or "hack" them and still retire at 54. For example, I'm a car guy and watch collector and own few Porsche's and 1 BMW however instead of buying the latest 911 and loosing my a$$ on annual depreciation, I instead bought a 1999 996 for $11,000 and replaced the IMS myself and enjoy it equally as much as any new 911. I paid $2,200 for my 928 in 2000. My daily is a $5,000 BMW 3 series. I'm 54 and could care less about showing wealth but instead buy these types of cars for their rear wheel drive and handling. I also do all my own major and minor repairs so that greatly curtails the expenses associated with owning European cars. My watch hobby ( mostly vintage Rolex and Omega) turned out to be way more expensive and became an actual addiction of always wanting that one more watch as many collectors will attest to and I realized I had to stop if I wanted to retire early so I did. Today, with just my wife who works, 3 dogs and the kids out of the home living in the way more affordable mid west, I can easily live of $3,000 per month, actually less since my toy buying stage is over. What would worry me is if I had one or two kids under 18 still living at home and refused to move out of say California to a cheaper places to live. I would not have retired early at 54 with my investment total of around $1.25M which I feel may be a bit artificial given the market run up we've had in the past year.

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  11. Sergio Santana
    Sergio Santana says:

    With a married couple combined S.Security income of 50k and another 15k coming in from a reversed mortgaged home this already has a present value of 2 million dollars( if you follow their so called 3.02% rule.) if you want to follow the 4% rule it is a present value value of 1.6 million for most social security will take care of 60/80% of that number

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  12. Re3iRtH
    Re3iRtH says:

    I think $3M you'll be barely middle class assuming you'll retire in 20 years (if you're around 40 now). I would shoot for $5M if you just invest in equities and use the 4% rule.
    I recommend real estate. If your real estate dutifully pays you $15K a month, you could care less if your net worth is -$200K, $2M, or $10M (all are possible in this scenario)

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  13. A.D. B
    A.D. B says:

    This is not realistic for most people. Many people in their entire lives don't make more than 1.2 million dollars. Even Pam Bondi just a couple days ago said the average family of 4 doesn't make more than 45,000 a year

    Reply
  14. James Gerboc
    James Gerboc says:

    If you ask any financial advisor "do I have enough money to retire?" they will ask you "what does retirement look like to you?" Thats easy to calculate if you know youre going to get up every morning and read the paper, go to McD and have coffee with your friends, go home take a nap, play 9 holes of golf with another buddy, go home and take a nap, wash the car, cut the grass, eat dinner, play with the grandkids, go to bed, and repeat. But for some of us who worked 24×7, was away from home constantly, had no time for hobbies or friends, its quite different. When you worked, you had little time to spend money. Sure you may have paid someone to keep the grass cut, but why buy a nice car when you drive a free one courtesy of your employer. You spend little money "for fun." When youre not working, everything you want to do costs money. Say your only child is on the opposite coast. Plane fair is steep. Or, you need to move across the country. Housing costs maybe far higher in the new location. You now have time to start a business, enjoy a second home, have a mistress, whatever. Many of us retire with expenses somewhere between that of a person with health issues that cant climb a ladder, and spending time on white sand beaches clinking champaign glasses. My barebones expenses in rural PA are close $5000/mo after downsizing and cutting everywhere. No mortgage, no memberships, no services, no fancy cars, airfare and hotels with points, coupon books, etc. Thats $60k a year or $1.5M (after taxes) without Social Security, just to maintain the life of two healthy people 60 years old. What am I missing Josh. Be honest. I can take it.

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  15. Wes M
    Wes M says:

    I am at $2,500,000 live a normal life but would feel a lot better with 3 to 3.5 million. Just not sure how and what I plan to do after working? I feel certain I could get by on what I have, but figuring out the real savings number is tricky. My plan has always been work as long as I can, save as much as I can the when that process is over manage my spending and assets. No matter who you are, we all could stand to spend a bit more than we have.

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  16. Rick Masters
    Rick Masters says:

    Thank you for reviewing this article. I actually had to read it several times to make sure I understood their point. It's ridiculous that they barely mention socially security and the significant impact it would have on their grossly inflated numbers.

    Reply
  17. Bob Krausen
    Bob Krausen says:

    We're all DOOMED!!!!! Amazing. Since conspiracy theories abound in today's climate let me add another: These articles are a government plot to get the kiddies to work until they die therefore negating the need for any future social security. Sounds legit, right? 🙂

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  18. Airborne Misfit
    Airborne Misfit says:

    We lived on $ 2500 a month when working and enjoyed life. Things I learned; live in a small house paid for and travel a lot, day trips and concerts or live in a big house and do a lot of yard work and go to a work party. Since being retired in our ninth year we live on 8k a month and do lots of travel and things we like. Taxes really go down when you retire and you have more disposable income. We are getting close to ten years not working and if you still have a channel in ten more years I will let you know how it is going for us. Retired at age 52.

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  19. Scott Engh
    Scott Engh says:

    When? In 40 years? 25 year old, saves for 40 years. Rule of 72, inflation of 4% doubles every 18 years. So doubles twice. $750,000 doubled is $1.5 M, doubled again $3 M. And look at health care costs…

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  20. Global Sync
    Global Sync says:

    My 75 year old mother lives off Social Security checks about $2100 month. Lives in a paid off condo with property taxes and maintenance fees about $450 month. Figure $20 day food about $600 month. The rest is electric, natural gas, Internet, cell phone, homeowners insurance, auto insurance, gasoline, tithes money to her church….. this all less than $2100 month. She takes the required minimum distribution from her IRA each year for added income but she doesn’t really spend it all. She has decent health and is not on meds or major medical issues.
    I ask her if she is having issues meeting monthly expenses and she says no.
    I met with her financial planner in 2019 and she has hardly put a dent in her $250,000 in retirement investments even with 10 years of required minimum distributions from IRA.
    Obviously, she doesn’t live a Rock-n-Roll lifestyle…. but I have never heard her worry about money.
    The key is no debt. No credit cards, mortgage payments, car loans…etc… no debts. So yeah, living on less than $30K is highly doable.

    Reply

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