End goal / How much do you need?

Discussion in 'Business, Investing & Finance' started by bradgator2, Mar 8, 2019.

  1. bradgator2

    bradgator2 Internet Bully
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    So, obviously the real question is: how much do I need to save?

    Usually whenever I see an article with this title, I will stop and read it. They are always entertaining.

    I will say that I am counting on $0 from social security. I also dont have a pension. I also dont own a business or real estate besides my home. So my only income will be from my investments.

    Obviously when I retire, I will not need to save from retirement. And the plan would be to have zero debt of any kind. Obviously once you retire, and the few years leading up to it, most of the investment would be a pretty conservative portfolio. So many unknowns in life, but you have to start the equation somewhere.

    Anyway, my goal has been to have 12x times my current salary in today's dollars. Which I am happy to say that I am track to hit when I am 63, with a 6% assumed return, current savings amount remains fixed over the next 20 years. Which I know will not be the case as I increase it every opportunity I can.

    It's always interesting to watch these calculators in the last few years. Delaying retirement even just 2 or 3 years would have dramatic change in the final value.

    Anyway, too much? Too little? Scrap this plan/approach and start on a new one?

    Love him or hate him, Dave Ramsey has a nice, simple calculator:
    Investment and Retirement Calculator
     
    • g8r.tom

      g8r.tom Well-Known Member
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      Have enough in the market that you can live off the 5% income it provides.
       
    • bradgator2

      bradgator2 Internet Bully
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      Yeah, that is how I came up with my number. I'm well on pace for that. In theory, the balance would never be dipped in to.

      So, right now... I am basically invested as aggressive as one can get. Is it possible to get a 5% return when you retire? I assuming you would want a pretty conservative portfolio at that point.
       
    • g8r.tom

      g8r.tom Well-Known Member
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      I believe 5% is attainable without being very risky. My FIL does it. That is our goal, and we got that from him. He has been retired for 9 year now, and rarely ever touches his principal. Even when he has to buy a truck or something, it eventually gets back to where it was.

      While we do not count on SS, I for one do not believe it is going away. You can't give people something and then take it back. It doesn't work politically. I would love to see a pol run on cutting your SSI benefit. I suspect they will raise the limits on the amount you are taxed for SSI. I think it stops at $85 or $95,000 now. They could raise that to $250,000 and not raise the benefit caps. This would fund it a lot longer. Running on taxing the rich to save SSI will be a popular thing.

      Dave Ramsey has some good things to say about finances.
       
    • Pablos Tunnel

      Pablos Tunnel Well-Known Member
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      Why not spend principal too?
       
    • g8r.tom

      g8r.tom Well-Known Member
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      To not drain the thrown income. Why touch it if you don't need to.
       
    • TLB

      TLB Just chillin'
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      I believe Pablo's point was - don't kill yourself living on interest alone. If you need to use the principal you can, you earned-saved it. Especially if you are late in years, some spending of principal makes sense, UNLESS you are intending to leave it as inheritance. But that sounds like a whole 'nother thread I'm not going to start.
       
    • 78

      78 Dazed and Confused
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      Are we talking a 5% income stream or withdrawal rate? There's a difference.
       
      • CGgater

        CGgater Gainesville Native

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        Dad’s a retired CPA. He told me years ago that if you can average 6% annual over a 20 year period, you’re doing pretty well. I would expect that average to drop as you shift towards more conservative investments in retirement.

        While I’m not getting rich in the military, the pension is definitely gonna help me prep for retirement. I invest, but I don’t have to plan to live exclusively off investments. So I couldn’t tell you what would be “enough.” And I agree we can’t depend on social security being around.
         
        • Concrete Helmet

          Concrete Helmet Hook, Line, and Sinker
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          I've a got a great plan.....Lottery....I pay in $20 a week and one day it will make me millions.
           
          • divits

            divits A Muffin of the Studly Variety
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            I use 4% return as my benchmark when using the savings withdrawal calculator mainly because when figuring for retirement I want to be conservative to allow for unforeseen hiccups. Right now you can get a 5 year CD for 3.5% so I'm pretty confident in at least 4%.

            savings-withdrawal-calculator-tool.aspx

            It's fun to play around with this calculator because you can see what you can spend and how much you can spend if you want to leave something for your kids or not. I am planning on trying to leave them as much as I can but still have all the money I need to do all the traveling and things my wife and I want to do in retirement.
             
          • Pablos Tunnel

            Pablos Tunnel Well-Known Member
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            Can’t take it with you.
             
          • Pablos Tunnel

            Pablos Tunnel Well-Known Member
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            Exactly. Use and enjoy it all. The real estate and life insurance can go to the kids.
             
            • Gator By Marriage

              Gator By Marriage A convert to Gatorism
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              I find it interesting how many folks are planning their retirements with the idea they’ll get nothing from social security. (Count me in this camp by the way.) Is it because you think it will be broke or because Congress will decide to means test it or something else? Personally, I’m guessing means testing. I’m already preparing to be super pissed when this day comes (for all the good it will do me).
               
              • bradgator2

                bradgator2 Internet Bully
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                Simply because I dont trust them and certainly dont want to be reliant on them.
                 
                • divits

                  divits A Muffin of the Studly Variety
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                  Absolutely means testing. Just look at the way one of the parties is headed right now. If certain people had their way not only will you not get your SS but your stock trades will be taxed, your interest and all capital gains will be taxed at much higher rates, and your inheritance tax will be massive.

                  Notice I didn't say which party will want to do that. Trying to keep this forum apolitical. ;)
                   
                  • FireFoley

                    FireFoley Senior Member
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                    I think it would be silly to think SS will be enough or even be there. I am counting on ZERO from SS b/c it will be (or is) broke and whatever they can find will go to the bottom up. The reason I doubt it ever goes away is b/c of the push in our society of once you are given something, it is almost impossible to take it away. Don;t get me wrong we have all paid in, so we are not actually being given anything. But those who have contributed less or who are already on the take (not talking about disability and other things we should take care of) or gaming the system, will continously want more and more.
                     
                    • Detroitgator

                      Detroitgator General Factotum
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                      Yup, and the "401K/IRAs will be confiscated (at some level) and wrapped into the 'New Improved SS for the People, Child Safety, and Greater Good Tax Reform Act' talk doesn't sound so crazy anymore. Congress salivates at the trillions just sitting there waiting for the stroke of a pen.
                       
                      • CGgater

                        CGgater Gainesville Native

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                        I think there’s too many possible scenarios that could end up happening, but at the rate deficit spending continues, I just don’t see how we can sustain our current budget SOP. I can’t even be sure my military pension will be around for the duration of my retirement (which begins 2-4 years from now). I definitely gotta get a job, because enlisted retirement won’t pay for everything (though it will be a nice supplement).
                         
                        • FireFoley

                          FireFoley Senior Member
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                          You are correct and that is already in the works. It is why BlackRock, Vanguard and other whores are pressing for the government to take over everyone's retirement accounts so they can introduce a government annuity for all, where you have no say, you get what you get and those whores get gazillions in commissions and fees.
                           

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