# How much is enough?



## Bentley (Jul 10, 2008)

In order For a couple to retire early, say between 56 and 60, how big should your Ira/401k pot be? This is assuming that your home is paid for, and you have medical insurance until 65.

Is $500k enough? $1million? 1.5 million? More?

Just wondering what others think?

B


----------



## Big Dave (Feb 5, 2006)

Howdy Bentley. That is a nice car. How do you want to live? Will your money be worth anything in future years? Just go for it. Take what you have and have joy. Soloman wrote stop chasing the wind as it is futile. Just my .02


----------



## Ramblin Wreck (Jun 10, 2005)

A lot depends on how simply/frugally (or not) you live. I find that staying home and piddling around the yard, garden, and pasture costs very little. In fact, it can save/make you a few extra bucks. Aside from taxes and insurance, you might get by with as little as $500-$600 per month. If you eat out or travel or like big boy toys, your budgetary needs escalate. 

I'd recommend that you and your spouse sit down and build a post retirement budget together based on how you want to live. Factor in ssno (however you choose to take it) and project a life expectancy of about 90. Given current returns, you better project modest (1% or 2%) investment income.

Retirement is fun, even without spending a lot of money. Getting up in the morning when you want and enjoying a cup of joe by the fire is pretty nice. Of course, then you have the problem of figuring out what you'll want to do after lunch. So, it's not a completely trouble free life.


----------



## TxGypsy (Nov 23, 2006)

It's too subjective to give a solid answer for. I'd start out by looking at all of your current bills....including taxes and try to honestly figure out how much those will cost you in 10 years. Budget for the future rather than today. That will at least give you a foundation for figuring out how much you will need. I find that my expenses tend to grow to use the amount of money I have available!  

Then talk to a financial adviser. Yes my broker makes money off of me, but I make enough extra with his advice that it more than covers his fee. If that is not the case....change advisers. At a time where lots of folks are making 1% or less I'm making about 4% overall.


----------



## ldc (Oct 11, 2006)

I'm concerned about the inflation factor/value of our money...I saved part of a Sear's catalogue from 1970, and when I had to buy another fridge in 2000, I saw in the catalogue that appliances had quadrupled in price in 30 yrs. Also, in my grandparents generation, 3 of 4 got close to 100, with almost no health problems. My parents died 20 younger, with horrible health problems. Oftn wonder how I'd pay for that, and who will help me if needed, as have no helpful child, such as I was to them.


----------



## Micheal (Jan 28, 2009)

Did some looking and found this chart - hope it helps even though the income may be more than you plan on.
To generate $50,000 a year in income you need ($ amt @ %):

$2,500,000 @ 2%
$1,666,667 @ 3%
$1,250,000 @ 4%
$1,000,000 @ 5%
$ 833,333 @ 6%
$ 714,286 @ 7%

This does not take into account any "outside" sources of additional money coming in such as SS, pension, lottery/gaming winnings, inheritance, well you get the idea. :icecream: 
Also note this does not deal with inflation, but is just a "snap-shot in time.
Could you half the money for $25K a year? I guess :shrug: don't know.....

Got chart from an article at MSN (retirement section).


----------



## Ramblin Wreck (Jun 10, 2005)

Micheal said:


> Did some looking and found this chart - hope it helps even though the income may be more than you plan on.
> To generate $50,000 a year in income you need ($ amt @ %):
> 
> $2,500,000 @ 2%
> ...


Neat chart. It does assume you never touch principal, which is conservative.


----------



## TxGypsy (Nov 23, 2006)

Ramblin Wreck said:


> Neat chart. It does assume you never touch principal, which is conservative.


:nono: Don't touch principal...never, ever, ever! :nono:

Principal is our Precious!


----------



## Ramblin Wreck (Jun 10, 2005)

TxMex said:


> :nono: Don't touch principal...never, ever, ever! :nono:
> 
> Principal is our Precious!


I agree, but not many are making the 4% you are!!! Good luck and best wishes with your investment plan...but it looks like you don't need any luck.


----------



## Bentley (Jul 10, 2008)

Interesting responses. That my question did not provide nearly enough data is a given, and several of you properly nailed me in that regard.

The real answer is that the highest amount is not nearly enough, and also the lower amount might be more than enough......depending. Nice cola'd pension along with SS, and the $500k will be just fine.
On the other hand, no pension, and no SS, then the $2 mill might be marginal.

Most folks sit somewhere in between. For ex, I took my pension as a lump sum, and rolled it over to my IRA, but I do still get SS in less than 3 years, my home is paid for, 2 late model vehicles are paid for, and medical ins is covered, although it is very expensive

Having said all that, lifestyle makes a huge difference, as several of you opined. New cars every other year? Better save a lot of dough. Must have the latest IPad, with all the bells and whistles? Better keep working.

DW and I drive our vehicles a minimum of ten years, and the current car and truck will probably go 15 years and/or 200k miles before replacement. Find sales and bargains for almost everything, or we do without. It's interesting how often some gadget catches our eye, and yet, if we just walk away.......it's not very important a few hours later.

Thanks for the enlightening opinions.

B


----------



## Sawmill Jim (Dec 5, 2008)

Have known some folks that skimp and save for retirement then die before they spend much of it. :shrug: The day we got enough to pay our bills i quit .:icecream: I like working for me my way and time what more you going to get out of life .I had rather pick up aluminium cans on the side of the road as punch a clock and sell my life to someone else :bow:

House is paid for and enough food for a long while so i'm setting back and letting the good times roll :icecream:


----------



## Helena (May 10, 2002)

do people really have hundreds of thousands of dollars tucked away for old age. My Dad actually did in his attic and before he died he sent it ..all..to overseas lottery crooks..unknown to any of us. His whole life gone...how sad. But it amazes me how some people were fortunate enough to amass a small fortune. Good for them..I say. For others like myself. Just content to have a blanket and to juggle the bills each month.


----------

