I know everyone's situation is different, but I'm wondering if people will share what their goals are for retirement savings. I have a friend who is about 55 and says she thinks that she should have a minimum of 2 million! It would be nice, but I don't think I'll be in that ball park.

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

Our goal is to have $1M by retirement age, as well as 4 houses paid for - 3 as rentals. We have 3 properties right now - 1 is a rental which will be paid for in 9 years, 1 is the home we live in now which will be paid for in 15 years and made into a rental in 6-8 years, and our lakehouse which is where we will move to in 6-8 years. We are planning to purchase a home for use as a rental in the next 2 years. I am 39 right now, so I expect to work another 25 years or so. I would love to retire early, but we will have to see where we are. We contribute the max to our 401ks and pay significantly more on our mortgage payments than we are required to - trying to save that interest and get them paid off early. We also have some stocks, but not a significant amount - maybe $20K or so - all in molecular diagnostics which I expect to continue to grow.

We are also paying for a portion of DS' college education. He will have 2 years paid for by the time he graduates. I have 3 more years to pay on that and when it is complete, will have another $380 per month to invest.

We have very limited debt, although we just bought a new-to-us car for $28,000. We put $10K down when we bought it in August and financed it on a 3-year note. We expect to pay that off early, as well. When we do, that money will also go into additional investments.

DH and I live in a modest home of about 1800 square feet. We splurge on vacations, but we are smart with our money. I absolutely refuse to reach retirement age without enough to live well on.

So, that's our plan. I am interested to hear what others are doing.



**This is an article I just received from my mom....

Achieving millionaire status is a noteworthy financial goal. But saving $1 million doesn't necessarily mean you are ready to retire or that you will be able to afford a lavish retirement lifestyle. Here's what it takes to save that amount over a working career and how much income you can expect a $1 million nest egg to provide in retirement.

More from USNews.com:

• Why the Retirement Age Is Increasing

• 10 Tips For Retirement Overseas

• Find Your Best Place to Retire

Making your first million. Many people should be able to save $1 million for retirement if they start saving early enough. A worker who saves $5,500 per year beginning at age 30, gets a $1,500 401(k) match each year, and earns 7 percent annual returns will have $1,014,640 by age 65. However, someone who waits until age 40 to start saving will have to tuck away closer to $14,000 a year to reach $1 million by age 65, assuming the same 401(k) match and investment returns.

Those who do not get an employer 401(k) match or don't consistently save in a 401(k) plan will need to save even more on their own. "You may have to adjust for time frames when you were not contributing to your 401(k), such as when you are saving for a house or you change jobs," says Mark Fuller, president of Fuller Wealth Management in Broomfield, Colo. "Life happens, and you have got to be able to make some mid-course corrections along the Kinsey, a certified financial planner for Artifex Financial Group in Oakwood, Ohio. "People need to really keep their transaction costs to a way." Excessive fees and investment costs, 401(k) waiting periods and vesting schedules, and taking early 401(k) withdrawals or loans can also make it more difficult to become a millionaire. "It sounds easy and it sounds good on paper, but in actuality it is tough for people to do," says Doug minimum. If you shave off a couple of points a year in expenses, that goes a long way toward saving a million for retirement."

What $1 million will generate. We associate the word "millionaire" with luxury. Spread out over a 30-year retirement, $1 million will likely make you comfortable in many parts of the country, but not especially wealthy. "I have clients who have got a million dollars in retirement and they don't feel wealthy," says Jay Hutchins, a certified financial planner for The Wealth Conservatory in Lebanon, N.H. "It's not enough that you can put it in the bank and draw half a percent of income and live off it. You have to invest it and you have to take on risk." If you draw down 4 percent of your $1 million nest egg each year, you will receive about $40,000 annually for 30 years, before adjusting for inflation. To that amount you can add any Social Security or pension income you expect to receive. But you will likely need to subtract taxes, especially if most of your savings is in tax-deferred accounts including 401(k)s and IRAs, and account for inflation.

Making it last. You may have to adjust your withdrawal strategy in retirement as new expenses arise or cut back on discretionary spending such as travel or entertainment in years when your investments perform poorly. There's also inflation, which can erode your spending power in retirement. Most people have one major source of inflation-adjusted income: Social Security. Other strategies for staying ahead of inflation include holding Treasury inflation-protected securities, a government bond that promises a rate of return above inflation, certain inflation-adjusted annuity products, some exposure to stocks or stock-based mutual funds, and owning real estate. "If you're living off $50,000 a year today, once you factor inflation in there, you're going to need more in retirement," says Fuller. Depending on what you estimate your expenses will be in retirement, he says, "you need to make it a goal to have a seven-figure portfolio when you retire."

__________________
Kim

I think the key is self discipline. People have to see the long view, not just the new car, tv, and eating out umpteen times a week. With a little self restraint, so many could have brighter futures/retirements. We opened IRAs at age 24 and 27 and while it was tough, maxed it each year. It was a priority to pay ourselves. Whenever the RIRAs came along, it was then beneficial for us, so switched to those. Again, maxing every single year.

We each contribute the max to our employer sponsored retirements (and get the matching amount - which is FREE money) The tax benefits now are fabulous and again, we are paying ourselves.

Even if an employer doesn't have a plan, people should be maxing an IRA or RIRA. A sahm can have an account as well, I don't think a lot of people realize this.

By being careful in our earlier years, we now own everything we have free and clear. We have bought at least 5 new vehicles and a fishing boat with cash over the past 20ish years. I can't stand to fill out finance forms and you get a better deal with a bank check in full.

Another thing to consider is making an extra mortgage principal payment. You have to be careful to know you can afford it because it goes to prinicipal, you can't try to get back that extra payment to cover a current regular payment - if you do this steady, your home will be paid off years ahead as well. We have other investments as well besides the retirements.

No dollar amount goal here, just to keep maxing whatever is legal and being responsible when we do spend money.

dl

I'm not asking for advice. Our house is paid off and we always pay cash for cars too. I'm just curious what folks think is ballpark amount for retirement. I'm thinking 1.5m.

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

How did you get to the $1.5M number? Just curious...

I got to $1M because we will have income from 3 homes (expenses, too, I know), so I expect we can clear about $1,500 per month to be used as additional income. (I'm assuming after taxes, expenses, etc. - I think that number is very conservative.) That should give us an additional $18,000 per year. Assuming that we will need $50,000 annually for expenses, which I think is high based on the fact that we will have everything paid off by then, we should have $960,000 in savings. Shooting for $1M is reasonable, I think. That's assuming that we won't have any income from social security and will live for 30 years past retirement.

Anyway, how did you get to your number?

Thanks! VERY interesting post.

__________________
Kim

Pretty much the same way you did, except we don't have rental properties. Instead, we will get about $800/month from pensions each of us got for the first few years of one of our early jobs. (We worked for the same company.) I think our expenses will be a little higher too. I have some medical issues that might get costly, depending on where the whole healthcare issue ends up by the time I retire.

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

I wouldn't expect you to follow my advice, nor did uou originally ask for a ballpark amount.

Mine is in the last line. Whatever is legal that I can accrue. I think any formula is pie in the sky with the way the market is for investments, housing sales prices being unreliable, and the problems with our government.

dl

I just noticed this - our house is the same size. I love having a small house. Less to clean and less to maintain!

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

I agree. We would like to have the house be just a little different because we have 4 bedrooms and no formal dining, but not enough to trade up for a bigger house payment. Even if DS has had 3-4 friends over, I can run through the house and get it picked up/company ready in about 3 minutes. I really like that! I used to live in a 3200 sq ft house and it was nice and roomy, but much more difficult to keep under control. Just my opinion...

__________________
Kim

Ahhh, interesting.... That is one of the things I haven't really accounted for - additional healthcare expenses. I probably ought to think about boosting up my number. I'll have to talk with my accountant to see what the heck we need to do...

Thanks for posting this. I looked back at my 401K contributions and realized that I was $2000 short of the max, so I've made that adjustment. I might not have realized that if you hadn't posted this question.

__________________
Kim

Cool! Glad it helped.

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

You guys all have wonderful retirement goals, but I really think you are in a very tiny minority of people.

Most people are living paycheck to paycheck just trying to keep a roof over their heads and feed their families. They're not trying to save a million for their retirement 10% of them don't even have jobs!

And many of us don't have matching 401K plans at our employers or any kind of retirement pension to look forward to (which even then, these days it seems they can just take it from you through a series of loopholes).

I commend you guys. If I had listened to my Mom and worked hard in my 20s and 30s I would have a big nest egg socked away. I truly believe that rental property is the way to go. Even if housing prices go down when/if you do eventually sell someone else has been making the mortgage payments so, barring any unforeseen huge expenses, it's almost pure profit.

__________________
The political system is broke and it's a joke.

It's tough. DH's employer doesn't match 401K and mine matches 3%. We are lucky to have jobs, though, and are thankful for it every day. However, we've also made sacrifices to try to make sure we are set for later. Rental property does eventually pay for itself, but there is a LOT that goes in to it. For example, today is the 9th and I still don't have a rent check for December - "it's in the mail"... It's a beating every time someone moves and we had to put out about $5,000 last year in repairs due to the damage (replaced the carpet, too, which will be good for a while now). The tenants moved during the summer, too, so we spent 3 weekends we would typically be out at the lake working on the rent house instead. DH gets frustrated and wants to sell (which would be easier , but I keep reminding him that we will be happy later.

My dad has 2 rentals that he owns and my mom has done property management on the side for over 30 years for 24 rent houses, so I grew up with that. I can't tell you how many times during my childhood that we spent weekends and evenings painting houses and repairing them when people moved. My DH and I do the same for ours now. In my opinion, in our area, it's a very smart investment. My dad had someone move out of one of his properties and he just finished working on the repairs and getting it back up to snuff. He figures he spent about $3K, but the tenants paid $52,000 during their time there. That is HUGE!

__________________
Kim

I don't know how you do it. Whenever my own house needs maintenance it makes me groan!

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

I have to be cheerful about it or DH would sell it! I KNOW it's a great deal for later and DH doesn't really have much to do with our finances, so I have to stick to my guns... It's a challenge, though! I want to groan, too!!!! lol..

__________________
Kim

OMG. We live parallel lives. My husband stinks at finances. I handle almost all of it too. (Lately, I've been twisting his arm to set up a Flexible Spending Account. He thinks it's too much work )

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

I was thinking the same thing, but reluctant to chime in. Most people are scrambling for today and can't even think about what tomorrow will bring. If you are able to save that much, that's great...but it's not even a pipe dream for most people.

Also, I thought that thinking you'd need about $50,000/year was crazy. I know you said you were planning high...but jeepers...a lot of people are living on less than that, paying a house payment, car payment, and trying to keep their kids in food and clothes. I would think that you could live quit modestly in retirement if you have your house and car paid off.

For those of you shooting for 1 to 2 million ~ I'm just curious as to what part of the country you live in, and do you have children? I live in a remote area where the cost of living is moderate. Raising two children and sending them off to college prevented us from saving much during those years.

That's funny. My DH won't do anything like that either because he just will never get around to it. Thankfully, he works for a VERY large company that has all of their benefits info online. I log in with him and set all that stuff up online. He can watch football and I will take care of our future... lol..

__________________
Kim

$50,000 may BE crazy... I have no idea... I'm trying to plan for the what-ifs and shoot high. I don't know if we will need/want $20K per year or $50K. I am trying to avoid a situation where we need $50K, but have $20K. It is a realistic goal in our situation today, but I have no idea if it will remain realistic. Who knows what will happen tomorrow? DH and I are both in relatively good health and have good jobs. I don't know what will happen tomorrow, next year, or 20 years from now. I'm just shooting for a number that I think will support us without having to worry. My mom and stepdad just retired with a little under $1M in savings/investments and are traveling and having a good time. I hope we are able to do the same.

We live in Fort Worth, TX. The cost of living is VERY reasonable here. Our house is 1800 sq feet and DH paid just at $100,000 for it 12 years ago. The home we have as rental property was one I purchased about 10 years ago and paid $110,000. It is about 1,600 square feet. DH has 1 son who is 21 and is taking a few classes in junior college, which his grandmother pays for. It is unlikely that he will pursue a 4-year-degree. We offer very little as far as monetary support to his son at this time. We paid his car insurance and health insurance until he was 20. We also have my DS, who is 12. I joined the Texas Tomorrow/Texas Promise fund a couple of years ago to start pre-paying for his college. It allows you to purchase "credits" and basically freeze the prices from the year you joined. We will have 2 years of college paid for by May of 2013. That's all we are planning to do right now. Hopefully, he will get a scholarship to help out with the other 2 years.

__________________
Kim

I always find financial / retirement thoughts interesting. We lived paycheck to paycheck in our early years, but still saved a little while doing without or with what we actually needed. People do have money for what they want to have money for. I think that's the key, their own perception. I understand your point about economics now, but the fact is, many people don't get it just like the Bruce family on the show "Downsizing".

I also see people crying poor when they are not. It seems to me that's the cool, in thing to cry now because "everyone else is" instead of the past 20+ years of keeping up with the Jones family and having everything to boast about.

We need a middle ground. We need people to become reasonable, responsible, and realistic. Those would be my 3 r's............

dl

If you think about it, though, only Roth-generated retirement income will be tax-free. If someone has $1M in savings and is generally planning on a 5% return from that to live on each year, well...

Taxes will take it down to... what? $40K? And then if you have a supplemental health policy to cover what Medicare doesn't, you're looking at a few hundred a month. I think my in-laws pay about $450 - $500 /month for theirs, so now we're down to $34K / year in income. Then there are regular utilities and such... and if you tithe, that's another $5K (10% of the 50K).

It sounds like a nice nest egg, and it IS... but if someone envisions enjoying their retirement and going places and doing things they didn't get to before... that may not be enough.

We live in the Boston area, which is pretty expensive. Our 1800 sq ft home was 170,000 20 years ago. We have one grown kid that we sent to college. It might be nice to live in a less expensive area, but the problem is, I'm pretty dependent on the fancy-pants Boston hospitals. I know other areas of the country have topnotch hospitals, but they tend to be in pricey areas too. Plus, I couldn't stand to live in a really hot area. (We almost moved to Dallas when I was 14 - I thought I'd melt when we visited.)

I've worked for companies that provide excellent benefits since I was 26, so that has made it easier to save -- but the job can be stressful and difficult, so it's a trade-off, I guess.

__________________
If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

It's interesting, isn't it? You think $1M is such a lot of money and it certainly is, but it's not what it used to be. My parents are traveling, but they also are traveling smart. :0) They drive to visit places or, if they fly, they are typically going to visit a resort where they are getting a great deal to view the offering (they sit through the 2 hour presentation). They also bought in to a time-share in Hawaii about 5 years ago, so they have that as an option, as well. Our situation might be a little different in that DH can "retire" from a major airline in 6 years with full benefits - meaning we would have stand-by flight benefits for the rest of our lives. Now, who knows if that will actually happen??? The airlines are consolidating and going out of business, so that's not a guarantee. That's what we are hoping for, though.

Wow, care to share a ball-park figure that you are shooting for or a number you think is a good goal? Just wondering....

__________________
Kim

That's a good question, and one that I need to think about - not just to respond to you, but it's one my husband and I need to talk about. It's been on my mind a lot lately.

I'm in my mid-40's. Our house is paid for and our cars are paid for. Without giving away every detail of my life, I guess it would generally be accurate to say that when I quit work to stay home because our first child was on the way, we had no vehicle debt and our house was almost paid off. We lived on my DH's income while I was working and used my income to pay down the house, so we didn't miss it that much when we cut down to one income.

In the meantime, I've inherited land that is pretty valuable when our own income is considered. To Donald Trump it wouldn't be all that valuable - ha - but if we sold it our proceeds would be about 5 years worth of my DH's salary. It generates $8K - $10K of income for us each year, and because I own it jointly with a sibling and a parent, I'm really not in a position to sell it right now. Not that I want to - just that I haven't even entertained the idea since I know there are emotional reasons my mom would not want to see it sold. I assume that as long as she is living we will continue to own it.

My DH and I started saving back in our 20's for retirement, and to be honest, I don't feel all that good about investing in the stock market for several reasons. The biggest one is that I don't understand it. I mean... I do understand it. But you hear this general rule of thumb that says when you are young it's a good idea to have your money in things that seem to carry a bit more risk, and that over time as you get closer to retirement you need to shift to more stable investments....

And our investments got slammed when the internet boom busted, and was just recovering when BOOM - 9/11 hit and ... well, those things that were recommended to us have not fared well. They (the 'experts') say to just sock it away into a mutual fund and don't try to micromanage it because there will be ups and downs and you can't freak out over every down day. However, in retrospect, we should have pulled, IMHO. I think we have less in there than we have put in over the last 20 years, and that's not going to get us where we need to be in 20 years when it's time to retire.

I have some cash sitting in the bank - way too much to just be 'sitting' there - from the sale of a farm I inherited when my grandmother died. It's there because I just haven't known what to do with it. I don't want to invest it in the stock market. I feel like 'diversity' shouldn't JUST be a matter of buying different types of stocks, but rather not JUST putting your eggs in the stock market basket. But I don't want to be a landlord (the other property I referred to is farm and ranch land, not residential).

So... I have been really feeling like my husband and I need to have a financial check-up. We told our initial financial counselor that we wanted an income from our investments of around $80K. My husband said, "We won't need that much to live on by the time we retire." I said, "No, we won't, but there are things we'd enjoy doing and places we'd enjoy going, and at that phase in our lives I don't want the answer to those wishes to always be, '... but we can't afford it and we never will.'" I said I didn't want a lack of money to inhibit us in any way. We don't have huge dreams or expensive tastes, but if on a whim we wanted to fly to Disneyworld, I don't want to regret that we couldn't afford it. I want us to be able to be generous to others and not pass by the opportunity to help somebody because *we* need help ourselves. I feel like we've been blessed with good minds and should be able to accumulate some measure of wealth.

But... our stock investments (aka mutual funds) have not been our friends. We've had three counselors over our savings history, and two of them moved on to different fields and the other one just ignored our investments as the internet boom was busting, and I think given the fact that he was getting a commission should've meant that he actively advised us... and he did not.

I blame him... but I also blame us for not being more aware. Then again, when it's an area you don't fully understand, you get an 'expert' on your side and expect that they will be your advocate and be proactive on your behalf. I expect it of other professionals who make money from us! Ha!

Anyway... DH and I need to have a check-up and see where we are and assess our goals again. It's been awhile and I am not smitten with our current state of affairs. I do freelance work from home, and think I need to kick it up a notch... but without a goal and a roadmap, ever since the house has been paid off I just haven't had a lot of gazelle intensity. Having that GOAL of owning our home outright kept me focused. Now I guess I need to round up my DH for a meeting of the minds to reassess our long range plans... which aren't so long-range anymore!