Comments on: How Much To Save For Retirement

By: Ryan @ Planting Dollars

Ryan @ Planting Dollars — Mon, 22 Feb 2010 16:16:19 +0000

Sitting on the beach seems really boring... trust me after 2 months of it I'm already bored... so I think being active in something even if it's consulting, writing, or some hobby is the best way through "retirement." Personally not a big fan of the idea since if I'm doing what I love, why would I want to retire? Ryan @ Planting Dollars´s last post ..Hiking Diamond Head and Snorkeling In Waikiki

By: Friday Round Up: Save Money on Tax Preparation Fees Edition | One Money Design

Fri, 19 Feb 2010 13:14:34 +0000

[...] week I discussed how much to save for retirement in my article at Bible Money Matters. I’ve decided not to join the panic about retirement [...]

By: Financial Samurai

Financial Samurai — Thu, 18 Feb 2010 08:31:00 +0000

I like Charlie Farrell's 12X your annual average salary saved up as capital before you retire. Financial Samurai´s last post ..Charles Farrell From “Your Money Ratios” Speaks! Part II

By: JoeTaxpayer

JoeTaxpayer — Wed, 17 Feb 2010 23:22:21 +0000

FB - The 12% assumed return is one of the quotes people use to bash Mr Ramsey. It's a very dangerous assumption as the long term market return has never been that high. When I began working, I assumed 8% and instead of changing my saving rate as the 80's and 90's were above average, I just changed my assumed retirement date. If one projects 12%, and it never happens, how do they compensate? How would the 42 year old in 2000 now change his plans at 52 having seen about zero growth? JoeTaxpayer´s last post ..Filing for a Tax Extension

By: Abigail

Abigail — Wed, 17 Feb 2010 22:48:25 +0000

I would caution against assuming work for retirement. If it’s possible, swell. But don’t count on it!

If you had asked me at age 19 what I’d be doing at age 31, I’d have guessed completely wrong. Why? Because I hadn’t yet had the neurological illness that left me with debilitating fatigue. I am really only able to work a few hours a week, and then only from home.

And all this happened when health is more or less guaranteed! No matter how much you take care of your body, there is every possibility that something will arise medically that will keep you from working. The older you get the more likely that is.

Two years ago my MIL was diagnosed with atrial fibrillation aka congestive heart failure. She can’t work. She wasn’t healthy before, but atrial fibrillation doesn’t discriminate with fitness.

So I think, while you should, of course, not obsess, you should REALLY consider the likelihood that you won’t be able to do what you do while in retirement. Even something as simple as blogging — you could have a stroke and lose a lot of fine motor skill.

I’m not trying to be a downer here, but take it from someone who learned the hard way: Health is never guaranteed. Planning as though it were is the best way to get a very unpleasant surprise at some point in the future.
Abigail´s last post ..A lazy post and a roundup

By: FinancialBondage.org

FinancialBondage.org — Wed, 17 Feb 2010 22:31:55 +0000

I am no expert either, but using one of Dave Ramsey’s retirement planning forms, for a 42 year old to retire in 20 years on $30,000/year, they would need to save around $650 a month for that 20 years at 12% (via a good Mutual fund). Minus 4% inflation of course. That is a lot of money to save for a long period of time. Most people don’t realize it but you need more money than you think, since we are living longer these days and the cost of living is getting higher and higher.

By: JoeTaxpayer

JoeTaxpayer — Wed, 17 Feb 2010 21:58:17 +0000

This is the ongoing question, is it not?
Lee Eisenberg’s ‘The Number’ along with the Financial company whose ad asks “what’s your number?”
For me, it starts with a question. Not what’s your gross income, but what income do you need at retirement? What goes away? If I’m full up on 401(k) and pretax IRAs, I still have federal tax. But no FICA/Med (7.5% or so), no saving for retirement (25% or so), no mortgage, no college saving, etc. So, ironically, those who save the most will need the least in replacement income, if only because they are living on so little.
I was aiming for early retirement. 10 years ago, 8%/yr seemed a reasonable assumption. And I should have been able to retire at 50 on about 60% of preretirement income. At this point, I am looking at 55 or so (I am 47 now) and as I told my wife who is older than I am, when we retire assuming a 4% withdrawal rate, we have two positives, not having counted social security in the plan, it will be a windfall, twice as each of us reaches the age to collect, and my part time income, as I can’t imagine ‘not’ doing something, I’ll likely have a second career that I’ll take on for fun, and some money will follow.
To answer the how much question. 25X your gross retirement need. Adjust for SS and/or other income.
JoeTaxpayer´s last post ..Filing for a Tax Extension

By: Jason @ Redeeming Riches

Jason @ Redeeming Riches — Wed, 17 Feb 2010 21:33:32 +0000

I agree with focusing on your expenses in retirement rather than the number to build up to, although I think that once you figure out your expenses and income it’s fairly easy to calculate retirement savings with some convservative variables.

At any rate, if a couple is debt-free, no major expenses except for taxes and insurance then their retirement “need” is going to be a lot smaller than someone who is paying off two homes, a boat and a convertible.

I like how Joe is retired but pursuing his passion! Great job!!
Jason @ Redeeming Riches´s last post ..3 Easy Ways to Help Others

By: Jason @ One Money Design

Jason @ One Money Design — Wed, 17 Feb 2010 21:21:59 +0000

David, I guess that’s what I’m planning on avoiding right now. I’m not going to extend my retirement contributions pass my company match at this point.

Kevin, yes, sir! Definitely not going panic and make sure my ducks are in a row before entering that stage of my financial journey!

Joe, well said. I like that. Retirement is about “more choices and not lack of activity” and completely agree that it’s essential to enter that stage without debt (including a mortgage)!!! Also, you’re approach seems to be very much in-line with my desired future career in coaching for a living. Maybe we can chat sometime.

Deacon, I suppose that % makes sense when you’ve surpassed establishing an emergency plan and put debt behind you. I look forward to being able to contribute that amount one day towards the continued operations of flying my plan.

Craig, good tips and I agree. I’m going to do what I can in terms of retirement savings and I suppose estimate as best as possible, but I agree that it’s definitely not going to be exact.

RJ, ah that is a good point you bring up. Another consideration – “when” you want to retire.

By: RJ Weiss

RJ Weiss — Wed, 17 Feb 2010 20:04:14 +0000

There are too many variables to calculate an exact number. However, it’s still good to estimate what you should have.

The most important thing is to decide when you want to “retire” and start saving a % of your income each year to get there.