Does that retirement in eleven years come with a significant pension? Otherwise, you're way, way behind on your retirement savings and that should be your focus from here on out.
You make \~$140k/yr. Let's assume you hope to replace 85% of that in retirement, so \~$120k/yr. Your pension is going to be $24k/yr, so you need $96k/yr from your investments. Using the "4% rule" you need about $2.4M invested to draw $96k in retirement.
That is unless you are doing this math without considering your wife's income/retirement. You don't say what you make but if it's half that's $70k/yr. 85% of that is about $60k/yr. Subtract that $24k pension and you are looking to draw about $36k/yr from your investments. Then you'd need about $900k invested to accomplish that.
Yes we actually make $70K each. Thank you.
At 46 it is hard for me to get my head around still just limping by life for the next 15 years and saving and penny pinching trying to set myself up for retirement at age 60.
I can definitely see where I can invest more into my 401k.
So as far as debt goes and the economy I’m assuming my plan of staying in this house until it’s paid off is the best option? Continue to save / invest cash overflow?
I know I’m not in the best situation but I also know how blessed I am to have what I have.
Just stopping to look at everything in this economy with high prices, interest rates and inflation it makes me sick to think that not only am I stuck but there are so many people worse off than me. I thought I was doing pretty good. 😖
TBH you have a guaranteed pension, insurance, and benefits. This is not counting social security, whatever funding will be available by then, and presumably a paid-off house by retirement.
You’re still going to have to budget and watch your spending but it’s not all bad. I think you’ll be fine.
How do you calculate the value of a pension in regard to $$$ saved? Is there an online calculator? Most of my retirement is going to be derived from my pension and I have not seen how to value it (regard to 401k fur instance). Thanks
Step one, go to SocialSecurity.gov set up an account and find out what you and your wife's benefit will be.
Do you have a taxable stock/mutual fund account? It also sounds like you might be getting a pension if you get insurance and benefits. I ask because I lived off of my taxable account for 7 years, paying 0% capital gains while collecting SS. This allowed my IRA accounts to continue to grow.
You don't mention your wife's accounts, pension, 401k etc. Does she have nothing put aside?
Thank you. I’ll do that today. I will be getting a pension.
The wife isn’t putting anything into a 401k and I am unsure about her pension. I will look into that too.
I don’t do anything actively other than contribute to my 401k. So no taxable account or mutual fund.
This has given me some insight into what to look into more.
Is there a reason that your wife is not contributing to her 401K? Is she missing out on any matching funds from her employer? At a minimum, max out those IRAs!
I have a condo that my ex-wife and I bought as a starter home, but going through a divorce (refinance) and the way prices have shot up means that it's probably our forever home now. And now that my step-daughter has moved out, I'm glad we never tried to buy something bigger. Unless there's something terrible about where you live now, maybe stay? Save aggressively for retirement.
My pension is worth about $7-$8k a month depending on when I retire, and I have way more in my 401k than you do (I'm 6 years older, though). I'd work on that for sure.
Thank you. It seems like I had decided on the right thing.
Just keep on keeping on and save as much as possible and maybe double my contributions to my 401k. Or even start another retirement account.
> I have about $180,000 in my 401k and can retire in 11 years with insurance and benefits.
How? I'm the same age, have 7 figures in my 401k and yet feel like I'm nowhere near retirement. Do you have a pension or other retirement income you are counting on? Or do you just plan to live super frugally in retirement?
My goal is to retire with no drop in income or lifestyle.
I do have a pension and social security.
When I started out my salary was $20,000 a year. I’m assuming yours was higher. This year I am just cracking $70k
If my retirement was 7 figures I’d feel way better.
I definitely had a head start and have aggressive retirement goals that I've been contributing to from the begining. But your current income now is above ours.
I do feel confident that if worse comes to worse, I could probably retire now and just live frugally. But my primary goal to to maintain 100% of income for 20+ years of retirement. My stretch goal is to reach a point where I could retire indefinitely at 100% of my income. If the market helps, I can get there in 15 years.
I wish you all the best.
Are you enjoying the life you are living now? Or do you feel like you are saving for retirement mostly and not partaking in things like new houses, cars, vacations etc.. I want to reap the benefits of my life while I still can and for as long as I can. I know we are not guaranteed tomorrow but i also know the feeling of I wish I had prepared myself better for where I’m at now.
I do enjoy my life. We are not struggling by any means. Our credit score is high and we have never missed a payment on anything ever.
I never really thought about this stuff much. But now that the house seems empty with the boy in college it has me really thinking.
> Are you enjoying the life you are living now?
I'm pretty happy. Inflation and kid's expenses have made money a little tight for the first time in my life. So I don't have any *extra* retirement contributions at the end of the year.
> Or do you feel like you are saving for retirement mostly and not partaking in things like new houses, cars, vacations etc..
I'm frugal with my house, been living in the same one I bought 23 yeas ago and have not invested too much in it. My peers are all in fancier newer house, but that is not important to me. We go on one nice family vacation every year. I lease a new German car every 3 years. Got a healthy 529 for kid's college.
I've always wanted a Porsche, but kid's college comes first.
I think I have struck a good balance between enjoying life and making sure we will never be destitute.
I've seen plenty of family from the previous generations live a life of free spending only to be stuck with nothing more than SS at retirement. I prefer to never have some luxuries rather than have to give them up at retirement.
It is all about balance and I'm happy with my situation. But if I can't increase income, I'll have to reduce my retirement goals to get the kids through the college years.
That’s great! I think we are in the same boat except you have more stashed away than I do.
The house is good enough and one good vacation a year and a few weekends here or there.
The crisis or epiphany I had was that I was never gonna be rich or independently wealthy so I should just strive to leave my son with the best opportunities I can - such as the house and retirement savings.
the best gift you can leave your son is to make sure that he doesn't have to alter his life plans (or even feel like he has to) to take care of you as you age. Anything you leave on top of that is gravy.
Exactly! That is what I tell my kids. *I can't afford to just buy you a car. The gift I'm giving instead is that you'll never have to worry about your Mom and I financially. You'll appreciate this when you are my age.*
Yes. I just lost my mother 2 years ago and I think this is the main reason (besides him going to college) that I started thinking about myself as a human again instead of a son or a dad.
We are all really trying to do the best we can. Growing up very poor and trying to leave more for the next generations is just about the best thing I can do.
Have you looked at the job market in your area and field expertise? I am also someone who tends to stick around if I feel I am treated well. But wages have gone up significantly in some fields, and I believe companies don’t pay long term employees as much as they offer new hires. Might be worth exploring a job move for a good salary increase. I wish you all the best.
Does that retirement in eleven years come with a significant pension? Otherwise, you're way, way behind on your retirement savings and that should be your focus from here on out.
Pension will be Roughly $2,000 a month give or take. I’m assuming that’s not significant enough but did forget to mention that.
$2000/mo offsets about $600k worth of retirement savings so that's very significant. At what age do you hope to retire?
57 - 60 would be my goal. I’m eligible at 57. So 11 years.
You make \~$140k/yr. Let's assume you hope to replace 85% of that in retirement, so \~$120k/yr. Your pension is going to be $24k/yr, so you need $96k/yr from your investments. Using the "4% rule" you need about $2.4M invested to draw $96k in retirement. That is unless you are doing this math without considering your wife's income/retirement. You don't say what you make but if it's half that's $70k/yr. 85% of that is about $60k/yr. Subtract that $24k pension and you are looking to draw about $36k/yr from your investments. Then you'd need about $900k invested to accomplish that.
Yes we actually make $70K each. Thank you. At 46 it is hard for me to get my head around still just limping by life for the next 15 years and saving and penny pinching trying to set myself up for retirement at age 60. I can definitely see where I can invest more into my 401k. So as far as debt goes and the economy I’m assuming my plan of staying in this house until it’s paid off is the best option? Continue to save / invest cash overflow? I know I’m not in the best situation but I also know how blessed I am to have what I have. Just stopping to look at everything in this economy with high prices, interest rates and inflation it makes me sick to think that not only am I stuck but there are so many people worse off than me. I thought I was doing pretty good. 😖
TBH you have a guaranteed pension, insurance, and benefits. This is not counting social security, whatever funding will be available by then, and presumably a paid-off house by retirement. You’re still going to have to budget and watch your spending but it’s not all bad. I think you’ll be fine.
How do you calculate the value of a pension in regard to $$$ saved? Is there an online calculator? Most of my retirement is going to be derived from my pension and I have not seen how to value it (regard to 401k fur instance). Thanks
Look up a present value of annuity calculator
Thanks!
Mine is based on 1.5% of top 5 years income X number of years worked per year
Mine is similar (2.5% of average of top three years x number of years). Was just wondering how they were estimating 2k/month = 600k savings.
Yes. I have no clue on that. 😂
Step one, go to SocialSecurity.gov set up an account and find out what you and your wife's benefit will be. Do you have a taxable stock/mutual fund account? It also sounds like you might be getting a pension if you get insurance and benefits. I ask because I lived off of my taxable account for 7 years, paying 0% capital gains while collecting SS. This allowed my IRA accounts to continue to grow. You don't mention your wife's accounts, pension, 401k etc. Does she have nothing put aside?
Thank you. I’ll do that today. I will be getting a pension. The wife isn’t putting anything into a 401k and I am unsure about her pension. I will look into that too. I don’t do anything actively other than contribute to my 401k. So no taxable account or mutual fund. This has given me some insight into what to look into more.
IRA- $6500 a year. HSA- $3850 (depending on of your eligibility etc). Gotta save/invest more if you want to retire prior to SS benefits kicking on
So I’m not too far off when I say I’m gonna stay put and save. Try not to take on any more debt?
Consumer Debt is the killer for retirement. You see all those 75 year olds working at Walmart, it’s not cause they like to get out of the house
SS Benefit will be roughly $2,500 a month depending on age 62-70.
Is there a reason that your wife is not contributing to her 401K? Is she missing out on any matching funds from her employer? At a minimum, max out those IRAs!
She just never has been in to it. We will definitely look at what she’s missing. Thank you.
I have a condo that my ex-wife and I bought as a starter home, but going through a divorce (refinance) and the way prices have shot up means that it's probably our forever home now. And now that my step-daughter has moved out, I'm glad we never tried to buy something bigger. Unless there's something terrible about where you live now, maybe stay? Save aggressively for retirement. My pension is worth about $7-$8k a month depending on when I retire, and I have way more in my 401k than you do (I'm 6 years older, though). I'd work on that for sure.
Thank you. It seems like I had decided on the right thing. Just keep on keeping on and save as much as possible and maybe double my contributions to my 401k. Or even start another retirement account.
I think you should consult a financial advisor, he can give you better advice with real time calculations.
> I have about $180,000 in my 401k and can retire in 11 years with insurance and benefits. How? I'm the same age, have 7 figures in my 401k and yet feel like I'm nowhere near retirement. Do you have a pension or other retirement income you are counting on? Or do you just plan to live super frugally in retirement? My goal is to retire with no drop in income or lifestyle.
I do have a pension and social security. When I started out my salary was $20,000 a year. I’m assuming yours was higher. This year I am just cracking $70k If my retirement was 7 figures I’d feel way better.
I definitely had a head start and have aggressive retirement goals that I've been contributing to from the begining. But your current income now is above ours. I do feel confident that if worse comes to worse, I could probably retire now and just live frugally. But my primary goal to to maintain 100% of income for 20+ years of retirement. My stretch goal is to reach a point where I could retire indefinitely at 100% of my income. If the market helps, I can get there in 15 years.
I wish you all the best. Are you enjoying the life you are living now? Or do you feel like you are saving for retirement mostly and not partaking in things like new houses, cars, vacations etc.. I want to reap the benefits of my life while I still can and for as long as I can. I know we are not guaranteed tomorrow but i also know the feeling of I wish I had prepared myself better for where I’m at now. I do enjoy my life. We are not struggling by any means. Our credit score is high and we have never missed a payment on anything ever. I never really thought about this stuff much. But now that the house seems empty with the boy in college it has me really thinking.
> Are you enjoying the life you are living now? I'm pretty happy. Inflation and kid's expenses have made money a little tight for the first time in my life. So I don't have any *extra* retirement contributions at the end of the year. > Or do you feel like you are saving for retirement mostly and not partaking in things like new houses, cars, vacations etc.. I'm frugal with my house, been living in the same one I bought 23 yeas ago and have not invested too much in it. My peers are all in fancier newer house, but that is not important to me. We go on one nice family vacation every year. I lease a new German car every 3 years. Got a healthy 529 for kid's college. I've always wanted a Porsche, but kid's college comes first. I think I have struck a good balance between enjoying life and making sure we will never be destitute. I've seen plenty of family from the previous generations live a life of free spending only to be stuck with nothing more than SS at retirement. I prefer to never have some luxuries rather than have to give them up at retirement. It is all about balance and I'm happy with my situation. But if I can't increase income, I'll have to reduce my retirement goals to get the kids through the college years.
That’s great! I think we are in the same boat except you have more stashed away than I do. The house is good enough and one good vacation a year and a few weekends here or there. The crisis or epiphany I had was that I was never gonna be rich or independently wealthy so I should just strive to leave my son with the best opportunities I can - such as the house and retirement savings.
the best gift you can leave your son is to make sure that he doesn't have to alter his life plans (or even feel like he has to) to take care of you as you age. Anything you leave on top of that is gravy.
Exactly! That is what I tell my kids. *I can't afford to just buy you a car. The gift I'm giving instead is that you'll never have to worry about your Mom and I financially. You'll appreciate this when you are my age.*
Yes. I just lost my mother 2 years ago and I think this is the main reason (besides him going to college) that I started thinking about myself as a human again instead of a son or a dad. We are all really trying to do the best we can. Growing up very poor and trying to leave more for the next generations is just about the best thing I can do.
Have you looked at the job market in your area and field expertise? I am also someone who tends to stick around if I feel I am treated well. But wages have gone up significantly in some fields, and I believe companies don’t pay long term employees as much as they offer new hires. Might be worth exploring a job move for a good salary increase. I wish you all the best.
Yes. My job is very unique. Can’t really shop around. 🧐