What percentage of your working earnings did you retire on? Is that amount working? I'm in a pensionand the more years I work the more percentage at retirement. Thanks
Question for the retired BBC people
What percentage of your working earnings did you retire on? Is that amount working? I'm in a pensionand the more years I work the more percentage at retirement. Thanks
Last edited by usabassin; 01-25-2023 at 07:47 PM.
You may need to rephrase...I think you left out a word
Always Think Like A Fish.....No Matter How Weird it Is!!
Really has nothing to do with pre-retirement income. It’s all about current expenses vs expenses that will change once retired.
Let’s say my salary is $125,000. If I contribute $25,000 to my 401k, that’s $25k I do not need. Health insurance comes out of your check before take home pay. You will pay it out of pocket in retirement ( part b and d Medicare is deducted from your social security check once you start drawing it. While working you pay 7.65% FICA tax, that goes away. You may have other pre- and lost tax deductions on your check that may go away as well.
best thing to do is to go back and look at your current expenses in great detail. Most people spend a lot more than they think. Now that you have a baseline for all expenses, create a second column and then look at expenses that may go down ( auto insurance, work clothes, fuel driving to work every day), things that may stay the same (real estate tax same working or retired), and things that will go up( hobbies, entertainment, health insurance)
let’s be real, you now have 7 days a week to do the things you want to do whenever you want to.
here is a good check and balance for expenses. Assume my estimate of current expenses come up at $3500. If I bring home after tax and savings $5000 per month and my checking and savings accounts typically average the same balance at the end of every month, guess what ? I spend $5k per month, not $3500. You really need to figure out where every dollar goes. Some expenses like auto insurance that you may only pay 2 or 4 times per year need to get averaged into a monthly budget for planning purposes.
I retired on less than half original pay. Downsized the house and moved to a lower expense state (TN).
Early days, but should work out well at a 4% draw.
A lot depends on how long you plan to live….
If you sit down with a planner first thing they ask is the last thing the above poster asked... how long do you plan to live? Big question.
My grandfather did not put near enough money away for retirement so he began to sell off land little by little. They did not plan well but I recall him telling me and my Mom " I did not think I would live this long", he died at 93. He inherited 99 acres, when he died it was less than 3 with a mobile home not worth moving. If I knew more I would have likely took out a loan to buy it all and let him live there free. That land then was tops $2500 an acre, now about 10k.
Health care Insurance is a huge factor..
Ohio river gets in the blood!
I’m semi retired and still consult for my old employer and have a portion of my savings in their T Rowe Price 401k. I had occasion to visit their website yesterday and while there watch the “your investments in review 2022”.Originally Posted by usabassin
That little computer generated video said the you need 11 times your highest year earnings in savings for retirement. Then it displayed my holdings in their account and it was about 9 1/2 times my last full year salary. The next graphic was my chances for having money in the bank till I dies and it was in the mid 90% range. This is based on just you and your money not household money. I have other money ratholed other places and my wife has other qualified money as well.
When we meet with our money manager she rates our success potential is even higher.
This is such a complicated house of cards it’s not funny. Nobody has a solid answer and none of us get out of here alive. You just need to get as comfortable as you can and do it.
I’ve never thought about it like the OP asked, but I’ll give it a shot. My wife retired 2 years ago. She’s getting close to 75% of her net pay in a lifetime pension. I’m fed up but still working. I’ll work 3-5 more years, but we’ve been practicing our retirement budget for about 8 months. I want to retire without a financial adjustment and I don’t want to guess what we’ll need. So I have my checks direct deposited in 2 bank accounts. 1 with the expected retirement need and expected retirement savings level in our regular account and the balance in a separate account. We’ve been more successful than I thought on first try. Using those numbers, the last 8 months we’ve been living off 48% of our working net income. We’re recent empty nesters and didn’t go spend all that extra disposable income so that gas helped. We live like we’re still putting 2 kids through college. I’ve been a horrendous investor throughout my life so we’ve lived well below our means and have just old fashion saved our way to retirement.
Seems we have more money now than when I was working. But we owe nothing. You just have to make sure there is very little debt when you retire. At least that’s what we did.
My retirement income ended up being around 115% of my working income
Joefish
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I took a buyout at 61, so I wasn’t eligible for Social Security. I got half salary for 2 years, plus drew interest only on one of the sub accounts in my retirement plan. That gave me the same income as when I was working. Once the half salary stopped, I drew Social Security but had a slightly smaller income than when I worked. Now with inflation, I’ve had to start drawing some from another sub account from my retirement.
"The man of system is apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his own ideal plan of government that he cannot suffer the smallest deviation from any part of it…He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard.” Adam Smith, The Theory of Moral Sentiments
I still make about the same as when I left a couple years ago.
Man you lost me here?
That's helpful. I'm in a pension and the more years I work the more percentage at retirement.
How? His expenses are $3500. He brings home $5000, yet his bank account isn't increasing by $1500 each month, but stays the same. Therefore he is spending the full $5000.
No Sh-t . He is making it way too complicated... Same as savings being 11 times your income. Rich BBC folks I guess.
Hell I'm Fat happy with what I have money to do what I want and everything paid for.
What I have always told the younguns before I retired and still do is to stay away from carlots,Slow that wife down, Keep the boat you like and don't trade every few years. Is's like a car or truck waste of money,Keep up the one you have.
More free advise for the asking, doing fine on $40'000 a year.
I get a pension that is a little over half of my high 3 years pay. That is after the wife's survivor benefits and the health insurance comes out of it. My health insurance is very reasonable (I worked for Uncle Sam). You have to know what you will spend yearly and be realistic.
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Isn’t the bottom line you will live on what you have? Hopefully if you’ve planned decently and haven’t had major financial crises, you don’t have to make huge changes in your quality of life.
See a CFP they can punch all the numbers in and tell what you have and what you need to have so you don’t outlive your money!
You don't need to have someone tell you what you have. 99percent of working class people only have enough to get by. I didn't punch a clock 42yrs. to just get by.
Pour all you can into a 401k if you have one and hold on. My first 20yrs. these 401s were not offered at my jobs. They are relatively new.
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