Retirement Planning

Honey, obama's in the White House-you're screwed-I have to live to be 125 years old just to break even! You're worried about retirement-there are 23 million people out of a job! Like my friend Jerry says, "Suck it up, Twinkie"!

I'm probably older than you and I don't know the exact equations we used for planning about 25 yrs ago. Hubby is a numbers man, MBA from top school and our priority has always been retirement and daughters college fund.

If you are not familiar with all equations, types of investing, ways to invest, etc... I urge you to speak with a financial planner who can guide you.

Many moms on this site follow Dave Ramsey. Although we don't, I do know he has some good basic values for you to use as starters.

Gain knowledge for yourself so you can better make decisions which will best benefit you later.

Good luck!

I am 54 and have asked numerous retirement questions--look into my past posts. Many mamas seem to resent retirement questions and all say to not worry about it, etc.

I am very frugal and plan to retire in 8 years. Currently, I save on my own and have money taken out out my monthly wages (that I cannot touch without penalty).

For those mams saving for kids colleges, I say pay for 3 years and then make them foot the other years. This will make them serious about the graduation!

I think, at the end of the day, you have to save what you CAN.
We still need to live our lives before retirement.
Take advantage if any emoter 401k & matching funds plans, of course.
Roth IRAs for each of you, maxed each year would be good.
I'm O. of the Dave Ramsay fans that TF refers to, I guess.
His main concept being if you get out of debt first, it makes it easier to save for retirement. Debt ( which you may or may not have) needs to GO first.
I recommend O. of Dave's books. Good ideas on there!
Good luck!

C. the biggest unknown with retirement planning is medical expenses. It's hard to get a realistic picture without being able to project what you'll be spending on medical care as a retiree. At age 55 or 60, you won't qualify for social security (assuming it's still solvent years from now) or medicare. Some employers (mostly unions) offer some kind of medical insurance over and above medicare for their retired employees and some provide a bridge between early retirement and medicare eligibility if they offer early retirement packages - this was very common when my dad worked for a utility.

So, figure out how much of your health insurance is being covered by your employer and whether or not you would ever have the option of using COBRA or something to purchase insurance directly under their plan vs. buying on the open market. Of course with health insurance rules changing rapidly, who knows where this will be when we retire, right?

So with that said...I think that 80% is a realistic estimate. You can always meet with an advisor at a place like Fidelity for free and see what he or she says too. You don't have to actually invest with them to get some basic info. But keep in mind that medical expenses for an older person can easily be more than what you're paying for your mortage now. The expenses don't go away, they just shift...from mortgage to medical care, from kids to travel, from job-related expenses to hobbies, etc.

To give you a realistic picture, where I live, a couple retiring today needs about $800K - $1M in cash with no mortgage and minimal health insurance premiums to retire comfortably at age 65.

I haven't used a retirment calculator, so I don't know what it takes into consideration. I'm assuming it adjusts for inflation. However, you need to remember that your expenses will also decrease. In your case no more mortgage payment, no comuting expenses, etc. Maybe you can live off of 70%.

I met with a financial planner a few years ago, just to get some general advise and make sure I was headed in the right direction.

IMO it's not worth it to make extremely sacrifices now for the "unknown" future. By that I mean, save for retirement, but at the same time enjoy life now. Find a balance that works for you. Maybe that means, save a little less now, and wait to retire at age 58.

Read "The Wealthy Barber". His plan is quite simple... Save 10% for your retirement and another 10% for the "I can buy whatever I want someday..." The main premise is to live below your means now. Great book!!

We need to have about 2 million in cash for college for all the kids. That's a lot. That's the focus right now.
So far there is $10,000 per kid (5 of them) but they are babies and toddlers mostly.

The retirement is a separate account and we are saving. I don't know what amount we'd need, but it's good you are planning ahead!

I am with JB...medical expenses are a great unknown. My husband has a coworker that planned and saved for an early retirement. The year he was supposed to retire his wife got ill and needed a heart and lung transplant. He had to keep working for the insurance. Now she is healthy and the medical bills are under control. He planned this to be his year to retire. Then he found out last week HE has lung cancer. Even though it's terminal he is still working. He needs the insurance to be able to have medical treatments to prolong his life. It's a vicious circle. It's one thing everyone in the office is learning from...be prepared for worst case scenario.

I have us set to retire at 71-72. We save a lot- we max out one 401k ---17k a year, but we still aren't saving enough. Ideally, we need to save another 10k a year, and my goal is to get there in the next 2-3 years. If we do this, we are good till 99. I also do the calculation without SS money, and I assume for the worse case scenario. The calculator I use also includes the cost of things like long-term care, medical gap insurance, etc. (I use our fidelity account calculator). If the market performs on average, we will actually have double the amount we need, so maybe we can retire at 65, but if I assume the worse, we will need to work till 72. Also, our kids will not be out of college until we are 61.

I say YES, plan for at least 80%. You have no idea how things will be in the future. Also, if you want to travel, and you currently don't travel, you will need more money for that, even if you are frugal. Airline tickets can be ridiculously overpriced.

Its free to meet with a Financial Planner. Ask friends if they have one they like/trust, word of mouth is a great way to find one or if you have an Accountant then they should have someone to refer you to.

I think 80% is a good goal. The reason it is not 100% is in general, much of the money you have saved has already been taxed. While you may not have a mortgage - you may at some point decide you need to sell your home and move into an assisted living facility or even a nursing home. Is your home a single floor and fully accessible - if not you may have substantial investments in the home to continue living there. Medical costs are a big question - at this point you will need to continue your health insurance for quite a period of time before you are eligible for medicare. You also have no realistic idea how long you will live. If you retire at 60, you could reasonably need to have enough saved for 25 years. We are planning for 80% of our income but plan to work until DH is 65-67 (I am 5 years younger). We may both retire at the same time, we may not, but we are financially planning so we can. Saving 10% a year is unlikely to get you where you want to be. And yes, it is worth scrimping now so as to be ok later.

Some moms are not close to being ready to think of the money needed to retire, so they balk when others are ready.