Your Retirement Nest Egg

[gdr_11]

This article says Americans think they neec $1.8M to retire comfortably. Like all MSM articles, they are in a dream world since only the top 15% or so can assemble a package like that. Even then, if you are in your 50?s you will need to plan for more than that since that number will double by the time you reach 65, especially with no Social Security

https://www.usatoday.com/story/money...t/70507274007/

 

[Brains]

Depends on what 'comfortably' means to you. Using a dollar amount way over simplifies things, and of course the hardest thing to plan for is the future value of the dollar. Rather than stress too much about it, I'm just doing my best to hit retirement age with all the assets I need paid off, and enough money invested to hopefully never be in a bind.

 

[CavCop]

Most Americans think they deserve to make six figures a year too.

My plan is to retire at 59, and make things work with what I have, living a modest lifestyle. I grew up poor, don’t want to be rich, but damn sure want to enjoy whatever life I have left after 59.

I will be lucky if I have $450K in investments by 59 and will have to play tax games then.

 

[Havok1]

This isn’t unrealistic at all if you consider different age groups. $1.8m is only $72k/yr retirement income on the high end of safe withdrawal rates.

 

[Double Naught Spy]

If I retire at that much, I will be improving my standard of living. Cool.

My wife and I. combined, are living on less than that, now. I thought we were living pretty lavishly.

My retirement is largely in real estate, which I can no longer afford to invest in after covid. However, I have two places paying me rent income and if all goes well, that will be our retirement income as well and then hopefully, the properties will go to our kids and they will have extra income.

 

[baboon]

Kind of like the size/ amount of house a relator told me we should be in back when we first were home buyers.

Personally I feel I'm doing fine on my SSD. Hell just lookout the kind of toys I have bought recently. I remember one time I was home to see my dad, and how he said he couldn't believe how well he was doing. He had a tea pot with about a $1,000.00 in cash just laying around for incidental money. He was amazed at his income he had coming in& not going out daily to earn.

 

[TipBledsoe]

... with all the assets I need paid off...

^ This is key. The answer to the OP question depends greatly upon what amount of debt carried into retirement.

 

[baboon]

^ This is key. The answer to the OP question depends greatly upon what amount of debt carried into retirement.

The wife was amazed at us being in better financial shape then her parents.

 

[msharley]

This article says Americans think they neec $1.8M to retire comfortably. Like all MSM articles, they are in a dream world since only the top 15% or so can assemble a package like that. Even then, if you are in your 50?s you will need to plan for more than that since that number will double by the time you reach 65, especially with no Social Security

https://www.usatoday.com/story/money...t/70507274007/

Depends on where you live...

Some places?

Property/school taxes? CRUSHING!

 

[Havok1]

One thing to keep in mind with debt is that it can work in your favor also. A lot of people have very low interest mortgages right now, and can easily earn 2-4x what they pay in interest on investments. the difference between rushing to pay off low interest debt and letting it ride can make a huge difference in net worth over the long run. Of course people need to run the math for their specific situation though.

 

[pronstar]

The reality of my nest egg…I’m really counting on the power of compounding interest

 

[oldag]

This isn’t unrealistic at all if you consider different age groups. $1.8m is only $72k/yr retirement income on the high end of safe withdrawal rates.

4% on 1.8M is $72k annually without the need to touch the capital. SS (for however long it lasts) is on top of that.

A portfolio of dividend aristocrat stocks can provide a 4% return.

Doable if you do not have debt.

 

[PinnedandRecessed]

Don't know about ya'll but I'm planning on winning the lottery.

 

[candcallen]

Our retirement went poof when the crash happened and the wife's pension dissapeared for the second time. Over 20 years with Kmart and it dissapeared instantly. Then I was disabled and were just now getting where we can start saving again then cancer. It ain't cheap. Still we actually have a net worth now so there's that.

Always a hill to climb
I hope to invite any creditors to my funeral and they can all have some ashes.

Seriously our home is our retirement. How we work that with all debt paid off at the time should allow simple easy jobs but actually retiring? I don't think that will be possible both in practice and the fact my wife would go nuts not running some little empire.

Being in Texas we would still have taxes even though they are frozen it's still about 700 a month.

 

[Havok1]

4% on 1.8M is $72k annually without the need to touch the capital. SS (for however long it lasts) is on top of that.

A portfolio of dividend aristocrat stocks can provide a 4% return.

Doable if you do not have debt.

Dividends are a deduction from the share price, so they aren’t really a factor in return.

whether or not $72k is doable has a lot to do with a persons age. A current retiree may live comfortable on $72k annually depending on their lifestyle, but that doesn’t mean that when a 20 year old throws out a number much higher than a lot of current retirees net worth that they are being unrealistic. Even just 2% inflation adds up over time.

 

[oldag]

Dividends are a deduction from the share price, so they aren’t really a factor in return.

whether or not $72k is doable has a lot to do with a persons age. A current retiree may live comfortable on $72k annually depending on their lifestyle, but that doesn’t mean that when a 20 year old throws out a number much higher than a lot of current retirees net worth that they are being unrealistic. Even just 2% inflation adds up over time.

Not sure where you studied finance, but I would ask for my money back if I were you. Dividends are part of the return along with share price appreciation. To say otherwise is rather... Well, I will just leave that there.

$72k + SS can do just fine if one does not splurge. Obviously, not referring to someone retiring at 50.

 

[Vaquero]

The 1st thing you need is a good financial advisor.
We made our money by sacrificing our time.
We became experts at our jobs.

Find a FA that's got happy clients.
And been at it a few decades.

 

[V-Tach]

^ This is key. The answer to the OP question depends greatly upon what amount of debt carried into retirement.

achieving ZERO debt is hard ......staying that way is even harder......

 

[Txhillbilly]

I'll probably work till the day I die. Been every place I've ever wanted to go, and seen all I want to see. Everything I have is paid off, and has been since 2017.
If you need 70k+ a year to live for retirement, you must want to do a lot. I can easily get by and live quite well on less than a 1/4 of that amount, but I guess that's the luxury of being single and thinking ahead.

 

[Havok1]

Not sure where you studied finance, but I would ask for my money back if I were you. Dividends are part of the return along with share price appreciation. To say otherwise is rather... Well, I will just leave that there.

$72k + SS can do just fine if one does not splurge. Obviously, not referring to someone retiring at 50.

Dividends are deducted from the share price. So if you have a stock that is $100/share and pays a $1 dividend, then when it pays the dividend, you will be left with a $99 share, and $1 cash. This makes the dividend irrelevant to the return. If you hold the stock in a taxable account, then you pay taxes on the dividend which makes your holding less valuable than before the dividend was paid out. While in retirement this isn’t an issue, but during accumulation the tax drag will have a negative effect on your portfolio.

If you want a better explanation of why this is the case, look up “the irrelevance of dividends” by Ben Felix on YouTube.

Since the article in the OP referenced “he average American”, according to google the average American is 38. If a 38 year old plans to retire at 65 with $72k/yr retirement income, based on 2.5% inflation that would be the equivalent of $36k annually now. That’s just not a lot.