How Much Is Enough For Retirement?

[deanac24]

This is something that is on everyone's mind...retirement. So how much is enough for you to retire on? The rule of thumb is that you'll need 70-80 percent of your pre-retirement income on an annual basis. That means if you're making $50,000 when you retire, you'll need an income of at least $35,000-$40,000 every year after you retire.

[Calypso]

God, I don't even want to THINK about retirement. It's all I can do to get by every month. I had to close my savings account last year because I flat ran out of money, and I even had to dip into my ROTH IRA, which came back to bite me in the b*tt during tax season. I'm either going to have to work my entire life or retire to a cardboard box in a stairwell.

[mamab]

Calypso, I'm right there with you in the box next door.

My husband had a 401K at his last job, but we ended up taking it out when he quit to start his own business. We DID pay off all our debt with it, but but had to borrow the money for the business. Now we're in debt FOR the business, that hasn't DONE anything. He's working a full time job again, but it's not enough.

[katharina]

Quote:

Originally Posted by deanac24

This is something that is on everyone's mind...retirement. So how much is enough for you to retire on? The rule of thumb is that you'll need 70-80 percent of your pre-retirement income on an annual basis. That means if you're making $50,000 when you retire, you'll need an income of at least $35,000-$40,000 every year after you retire.

That sounds reasonable, but there are things to take into consideration.
Like if a mortgage is paid off by retirement, you'd need a lot less. I think
this would be different for everyone's case.

[nangel78]

I have a 401K and an IRA. I just do what I can to save.

[PiscesGirl]

I don't believe in rule of thumbs. You have to go with your lifestyle. If you have no mortgage and no debt, it's easy to live below your 70-80% of what that rule of thumb is.

[PiscesGirl]

One thing I did was 10 years ago, I learned technical analysis on switching our retirement mutual funds. I have averaged 25% annual returns over that period. I bought 3 homes within 2 yrs of the boom, sold one and paid off another, next steps will be to sell the one I"m in and that will pay off the 3rd home which is our retirement. One has to work from the back end too. Not just your income.

[katharina]

Quote:

Originally Posted by PiscesGirl

I don't believe in rule of thumbs. You have to go with your lifestyle. If you have no mortgage and no debt, it's easy to live below your 70-80% of what that rule of thumb is.

I would think that whether or not there's a mortgage would be a HUGE factor concerning how much is needed for retirement. If mortage is like $1500 a month, that alone is $18k annually that won't be needed for retirement. We're trying desperately to pay the house off so we can stop worrying about mortgage. Big help!

[PiscesGirl]

Yes, you are right. It is important to have no mortgage when you are going into retirement. Some people are only thinking income but don't realize having no mortgatge is really more important. Keep trying to pay off the mortgage. But remember, you can do it in one lump sum too. Paying down a mortgage doesn't change those payments. You can easily draw interest on the money you would add to the mortgage until the mortgage balance is what you have in the bank.

[PiscesGirl]

Actually I should say it is just as important to have no mortgage than to worry about the income you will receive in retirement. With no mortgage, your income can be less and still have a nice retirement if you know how to budget. It's all relative to what one wants in their lives. Me, I want balance. I prefer simple things. I have done extensive travelling over the years and now I just want to enjoy my home in the Georgia Mountains and nature. I always have been created when it comes to money and I think this is an advantage too. I enjoy cooking so you save when you cook. Life has been so complicated for people that they just don't know when enough is enough.