How much money does it take to bankroll a comfortable retirement?

[huge-pigeons]

If you ask Americans, the average answer is an astounding $1.46 million.

That’s per a recent Northwestern Mutual survey of 4,500 U.S. adults, which found retirement cost expectations have spiked since 2020. This year’s average estimate is 53% higher than it was four years ago, when people said they’d need $951,000 to retire.

When it comes to their actual savings, though, Americans are far from achieving their expected retirement needs: Survey respondents reported their average retirement savings is just $88,400 in 2024.

That’s a $10,000 decrease from the average retirement savings recorded by Northwestern Mutual in 2021, when the metric hit its five-year peak of $98,800.

IMO, having $100,000 in your savings when you retire is pretty sad. I know many people the made good money throughout their careers but always seemed to spend more than they made. I think $1.5M is a little low too to retire on especially if you are fully invested. That $1.5M could become $800,000 if another 2008 happens and you might not have to years for your money to come back, all the while taking distributions out of it.

[Nell57]

“Comfortable “ is a relative term. Some are only “comfortable” if they are dining out three nights a week, golfing championship courses twice weekly …..several nice vacations a year.
Others are “comfortable” with burgers on the grill, executive golfing, free entertainment nightly on the squares.
It’s not money that makes you comfortable. It’s the relationships you build in life.

[Randall55]

“Comfortable “ is a relative term. Some are only “comfortable” if they are dining out three nights a week, golfing championship courses twice weekly …..several nice vacations a year.
Others are “comfortable” with burgers on the grill, executive golfing, free entertainment nightly on the squares.
It’s not money that makes you comfortable. It’s the relationships you build in life.People sell their homes before moving to the Villages. Pay cash for their new home and live on their social security and pensions. They have a little nest egg that earns interest. Some start a profitable work-at-home business. Unless you are a big spender, most can retire to the Villages.

[ThirdOfFive]

“Comfortable “ is a relative term. Some are only “comfortable” if they are dining out three nights a week, golfing championship courses twice weekly …..several nice vacations a year.
Others are “comfortable” with burgers on the grill, executive golfing, free entertainment nightly on the squares.
It’s not money that makes you comfortable. It’s the relationships you build in life.
Precisely. You can be "comfortable" in an off-the-grid cabin in Northern Minnesota or Aroostook County Maine if that is your thing. It is all subjective. But that $1.46 million to retire, IMO, is total bee ess. There is a huge difference between "comfortable" and conspicuous consumption.

[Shipping up to Boston]

If you ask Americans, the average answer is an astounding $1.46 million.

That’s per a recent Northwestern Mutual survey of 4,500 U.S. adults, which found retirement cost expectations have spiked since 2020. This year’s average estimate is 53% higher than it was four years ago, when people said they’d need $951,000 to retire.

When it comes to their actual savings, though, Americans are far from achieving their expected retirement needs: Survey respondents reported their average retirement savings is just $88,400 in 2024.

That’s a $10,000 decrease from the average retirement savings recorded by Northwestern Mutual in 2021, when the metric hit its five-year peak of $98,800.

IMO, having $100,000 in your savings when you retire is pretty sad. I know many people the made good money throughout their careers but always seemed to spend more than they made. I think $1.5M is a little low too to retire on especially if you are fully invested. That $1.5M could become $800,000 if another 2008 happens and you might not have to years for your money to come back, all the while taking distributions out of it.

Shhhh....your kids may be reading this!

[Stu from NYC]

Comfortable is a bunch of factors.

Owe money on house or cars?
Have a pension?
How much are you getting in SS?

NW only part of the equation

[Craig Vernon]

I believe comfort in relation to TV has become more expensive over the last few years, housing, insurance both auto and home, taxes, amenity fees and bonds. A pension, social security and tax deferred savings around a million with zero debt stress free? I think so.

[CoachKandSportsguy]

The published number is meaningless to any individual, as its a survey of average peoples' feelings with no published background on annual spending rate. Hard financial data is not present or known to be present.

Example
our house costs $30K annually and add in food and vacations. .
Say $60-70K max annually at the moment.

current social security for both of us is $72K at FRA, so at the moment no savings is needed.

I saw one CFP touting planning services say $3M is not enough in savings. (Scare tactic)
He was using $200K in annual costs and saying money runs out in less than 7 years. (That's like living in NYC!)

The determining factor is "sufficing expenses" and how you structure your spending.
Renting money with a mortgage sucks money away. .
best to pay it off to free up cash flow and reduce cost of living and dependence on any investment offset.
(maintaining a mortgage and keeping investments earning as much or more will work until it doesn't, ie you have to use the money for a huge unplanned black swan event, or the returns stop returning.)

So there's a lot of numbers in the world, a lot are not relevant or useful to any individual's circumstance. This is one of them

[Rainger99]

According to the Villages, the basic costs including taxes and bond is between $858 and $1390 a month.

The Villages - Florida's Friendliest Active Adult 55+ Retirement Community (https://www.thevillages.com/cost-of-living-in-the-villages)

This does not include a mortgage.

That doesn’t include a lot of expenses such as food and medical care but even if you quadruple the numbers, you should be able to live comfortably (but not extravagantly) for around $60,000 a year.

This will change if a person has medical problems or has to go into a nursing home.

[Randall55]

The published number is meaningless to any individual, as its a survey of average peoples' feelings with no published background on annual spending rate. Hard financial data is not present or known to be present.

Example
our house costs $30K annually and add in food and vacations. .
Say $60-70K max annually at the moment.

current social security for both of us is $72K at FRA, so at the moment no savings is needed.

I saw one CFP touting planning services say $3M is not enough in savings. (Scare tactic)
He was using $200K in annual costs and saying money runs out in less than 7 years. (That's like living in NYC!)

The determining factor is "sufficing expenses" and how you structure your spending.
Renting money with a mortgage sucks money away. .
best to pay it off to free up cash flow and reduce cost of living and dependence on any investment offset.
(maintaining a mortgage and keeping investments earning as much or more will work until it doesn't, ie you have to use the money for a huge unplanned black swan event, or the returns stop returning.)

So there's a lot of numbers in the world, a lot are not relevant or useful to any individual's circumstance. This is one of them
Agree with most of what you said. However, when interest rates are high, paying cash for a home is not always the best solution. You are throwing away the possibility of earning good interest. Interest rates go back down? Then you pay cash for your home. Hopefully, the period of time you were able to make a good return on your investment will pay for the bulk of your home purchase. In the interim, you enjoy maintenance free living while renting.

[CoachKandSportsguy]

Agree with most of what you said. However, when interest rates are high, paying cash for a home is not always the best solution. You are throwing away the possibility of earning good interest. Interest rates go back down? The you pay cash for your home. Hopefully, the period of time you were able to make a good return on your investment will pay for the bulk of your home purchase.

will always disagree for two reasons:
Tax on your income, which is variable
mortgage money rental rate,

therefore it works until is doesn't, there is a measure of risk which I don't care to pay for
and see no need to have to monitor and pay for.

good luck

[Stu from NYC]

The published number is meaningless to any individual, as its a survey of average peoples' feelings with no published background on annual spending rate. Hard financial data is not present or known to be present.

Example
our house costs $30K annually and add in food and vacations. .
Say $60-70K max annually at the moment.

current social security for both of us is $72K at FRA, so at the moment no savings is needed.

I saw one CFP touting planning services say $3M is not enough in savings. (Scare tactic)
He was using $200K in annual costs and saying money runs out in less than 7 years. (That's like living in NYC!)

The determining factor is "sufficing expenses" and how you structure your spending.
Renting money with a mortgage sucks money away. .
best to pay it off to free up cash flow and reduce cost of living and dependence on any investment offset.
(maintaining a mortgage and keeping investments earning as much or more will work until it doesn't, ie you have to use the money for a huge unplanned black swan event, or the returns stop returning.)

So there's a lot of numbers in the world, a lot are not relevant or useful to any individual's circumstance. This is one of them

I like that phrase, "the returns stop returning", have to borrow it.:BigApplause:

[dewilson58]

(a)I think $1.5M is a little low too to retire on (b)especially if you are fully invested.

(a)well, opinions are like ..................

(b)if you are retired, you get what you deserve.

:oops::oops:

[Two Bills]

When wife and I retired 27 years ago, we had what we would considered a comfortable retirement ahead of us, and so far it has worked out rather well.
We would not consider retiring on that amount now.
It is fifteen to twenty years down the line you have to look at, not your present comfort zone.
We have had a ball, but would need three or four times our original amount today for same experience.
I do not think that amount recommended is over thought.

[Blueblaze]

Why would 1.5 million be surprising when the average household income today is close to $80k? I thought I was a rich man the day I built my $130K dream home. I was making $30K/year at the time, as a Computer Programmer with three degrees. I thought I was really something, making my age. That's minimum-wage burger-flipper money today! And yet I somehow retired comfortably, despite three stock market crashes, my employer's bankruptcy in the Enron debacle, and a forced move and job hunt 500 miles away in my 50's.

Any fool can retire a millionaire. All it takes it a savings account and a lick of common sense. $80K, with a 3% inflation adjustment per year, and enough sense to save 10% a year at a 5% return, is $2,081,365 by age 65.

Somebody ought to tell the kids to quit begging for government handouts and just get a damned job!

[Shipping up to Boston]

Why would 1.5 million be surprising when the average household income today is close to $80k? I thought I was a rich man the day I built my $130K dream home. I was making $30K/year at the time, as a Computer Programmer with three degrees. I thought I was really something, making my age. That's minimum-wage burger-flipper money today! And yet I somehow retired comfortably, despite three stock market crashes, my employer's bankruptcy in the Enron debacle, and a forced move and job hunt 500 miles away in my 50's.

Any fool can retire a millionaire. All it takes it a savings account and a lick of common sense. $80K, with a 3% inflation adjustment per year, and enough sense to save 10% a year at a 5% return, is $2,081,365 by age 65.

Somebody ought to tell the kids to quit begging for government handouts and just get a damned job!

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore. A million up north is the starting point and its a bidding war, usually for a postage stamp property. So does that mean in 60, 40 years using that standard....those same homes will appreciate to 15, 20 mil? Of course not. There will be a huge bubble burst. Much harder road for young people...doesnt mean we worked any harder, or less....its just a different playing field. imo

[JMintzer]

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore. A million up north is the starting point and its a bidding war, usually for a postage stamp property. So does that mean in 60, 40 years using that standard....those same homes will appreciate to 15, 20 mil? Of course not. There will be a huge bubble burst. Much harder road for young people...doesnt mean we worked any harder, or less....its just a different playing field. imo

Exactly. My middle daughter and her husband both have good jobs (both 6 figures +), save like crazy and have a very nice nest egg set aside to buy a home. No student debt for either of them, both funding their 401Ks for retirement...

Unfortunately, they are looking in Arlington, VA, where a "fixer upper" is $750-$1 million...

Yes, they could afford the low end of that, but their mortgage payments would be $6K/month... And that doesn't include remodeling of the very dated homes...

[Stu from NYC]

Exactly. My middle daughter and her husband both have good jobs (both 6 figures +), save like crazy and have a very nice nest egg set aside to buy a home. No student debt for either of them, both funding their 401Ks for retirement...

Unfortunately, they are looking in Arlington, VA, where a "fixer upper" is $750-$1 million...

Yes, they could afford the low end of that, but their mortgage payments would be $6K/month... And that doesn't include remodeling of the very dated homes...

Our daughter and son in law live in DC where a house that would go for 750 would be considered a slum and the buyer would tear it down and build new.

[manaboutown]

This is a tough question. Many variables need to be considered. One's expected life span, current health, proposed standard of living, inflation's effect over one's remaining life span and the relative cost of living where one expects to retire come to mind for starters. Each case will differ. Some will be able to get by on $1M - $2M; others may need $1M or more a year.

[manaboutown]

Our daughter and son in law live in DC where a house that would go for 750 would be considered a slum and the buyer would tear it down and build new.

In 1967 I bought a house in Alexandria, VA in a nice neighborhood I believe called Rose Hill off Franconia Road on a street named Chevell Court for $27,000. Just checked. Homes on that street now are in the $750K+ range.

A year later I bought a four unit apartment building at 321 C St SE in the Capitol Hill area of DC for $28,000. I wonder what it would go for today? Zillow shows it at about $1.5M.

I have fortunately been able to assist my adult children with housing but my grandchildren aged 15 - 20 are facing very high housing costs in their future.

[JMintzer]

Our daughter and son in law live in DC where a house that would go for 750 would be considered a slum and the buyer would tear it down and build new.

Yup, plenty of those around... I've worked in DC for close to 40 years and the changes in housing prices are staggering. It's also the same in MD, where live. Yet, they sell within a few weeks. Go figure...

[Blueblaze]

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore. A million up north is the starting point and its a bidding war, usually for a postage stamp property. So does that mean in 60, 40 years using that standard....those same homes will appreciate to 15, 20 mil? Of course not. There will be a huge bubble burst. Much harder road for young people...doesnt mean we worked any harder, or less....its just a different playing field. imo

Yes, and my $130K house in the 80's was just as incomprehensible to my grandfather.

I agree that a thing that can't go on forever, won't. But inflation has no bearing on my point. If you want a comfortable retirement, all you have to do is save for it. Whether or not there will be a functional America for our kids to retire in, is a different subject.

But if I was a 30-something faced with a million-dollar mortgage to live in a dungheap like NY, Boston or DC, I hope I'd have sense enough to move to someplace where they don't confiscate half your income before you get a chance to pay your $5,000 mortgage payment, and then try to save $500 for your retirement after you feed your kids. Choosing where to live has just as much to do with common sense as saving 10% of your income.

[jimbomaybe]

Yes, and my $130K house in the 80's was just as incomprehensible to my grandfather.

I agree that a thing that can't go on forever, won't. But inflation has no bearing on my point. If you want a comfortable retirement, all you have to do is save for it. Whether or not there will be a functional America for our kids to retire in, is a different subject.

But if I was a 30-something faced with a million-dollar mortgage to live in a dungheap like NY, Boston or DC, I hope I'd have sense enough to move to someplace where they don't confiscate half your income before you get a chance to pay your $5,000 mortgage payment, and then try to save $500 for your retirement after you feed your kids. Choosing where to live has just as much to do with common sense as saving 10% of your income.

With all due respect, inflation has a great impact on your retirement, sponsored defined benefit retirement plans have become scarce except for ones funded by a government entity and most of them don't look to healthy, SS alone makes for a not very opulent retirement, cost of living adjustments ether from SS or pension plans always seem to fall short of real inflation. Inflation destroys the value of most retirement assets . The stats I have seen look rather dim for a large section of would be retirees, for most it's a failure to plan rather than a failure of plan, but if you plan with a good cushion perhaps at least you hiers will have something to hold on to, and avoid a diet of rice, beans and dog food

[OrangeBlossomBaby]

If you ask Americans, the average answer is an astounding $1.46 million.

That’s per a recent Northwestern Mutual survey of 4,500 U.S. adults, which found retirement cost expectations have spiked since 2020. This year’s average estimate is 53% higher than it was four years ago, when people said they’d need $951,000 to retire.

When it comes to their actual savings, though, Americans are far from achieving their expected retirement needs: Survey respondents reported their average retirement savings is just $88,400 in 2024.

That’s a $10,000 decrease from the average retirement savings recorded by Northwestern Mutual in 2021, when the metric hit its five-year peak of $98,800.

IMO, having $100,000 in your savings when you retire is pretty sad. I know many people the made good money throughout their careers but always seemed to spend more than they made. I think $1.5M is a little low too to retire on especially if you are fully invested. That $1.5M could become $800,000 if another 2008 happens and you might not have to years for your money to come back, all the while taking distributions out of it.

You're comparing apples to lifeboats.

Savings isn't income. Most people have social security income in addition to savings. Also, if you don't owe on a mortgage but own your house, you have equity, in addition to savings, and income.

We absolutely don't have $100k saved up. We took what we got for the sale of our house up north and sunk it into a house in The Villages. We owed for around 6 months to a relative and repaid it in full. And then - we had very little in savings to show for it.

I continued to work part time, he got his pension, then he started work part time after the first year, then I quit, and he started collecting social security, and I'm getting social security too now.

So we have two social security checks, a pension check, and not much in the way of savings. This is how millions of people live. We're living much better than many, because we have no outstanding debts, and we're not "one paycheck from homelessness." We enjoy dining out, we enjoy a house that isn't falling apart, a truck, a car, two golf carts, the taxes and insurance obligations covered, health insurance paid for, dancing, watching TV, having cell phones and other assorted technological gadgets and doodads, a decent wardrobe, and an outstanding neighborhood of great people.

You don't need $100,000 savings to get all that. But you DO need a regular income stream to pay the bills, and some padding in case you need a new roof.

If I wanted to live MORE comfortable than I do now, I'd say - having our current income stream, and maybe $250,000 extra kicking around somewhere would be excellent. But I wouldn't turn down the winning powerball ticket.

[Blueblaze]

With all due respect, inflation has a great impact on your retirement, sponsored defined benefit retirement plans have become scarce except for ones funded by a government entity and most of them don't look to healthy, SS alone makes for a not very opulent retirement, cost of living adjustments ether from SS or pension plans always seem to fall short of real inflation. Inflation destroys the value of most retirement assets . The stats I have seen look rather dim for a large section of would be retirees, for most it's a failure to plan rather than a failure of plan, but if you plan with a good cushion perhaps at least you hiers will have something to hold on to, and avoid a diet of rice, beans and dog food


Inflation has an enormous impact to those of us living off our savings and SS checks. But it does not have any impact on whether a working person, whose income is inflating along with the rest of the economy, can save that scary $1.5m number for retirement -- which, by the way, does NOT include their real estate and SS. I just showed you the math -- which included 3% for inflation -- proving that someone with an average $80K income can easily save over $2M in 45 years. The question is not, is it possible. The question is whether the average wage earner has enough common sense to do it. Given the fact that the average American has less than $1,000 in the bank, obviously, most don't.

My biggest fear is that the generation who refuses to show up at the office to work, and thinks the Gooberment ought to pay for their student loans, is going to look at my nestegg one day and say "gimme".

[Pugchief]

My biggest fear is that the generation who refuses to show up at the office to work, and thinks the Gooberment ought to pay for their student loans, is going to look at my nestegg one day and say "gimme".

That seems like a pretty rational fear. Wealth redistribution never turns out well, but they keep trying it anyway.

[tophcfa]

According to the Villages, the basic costs including taxes and bond is between $858 and $1390 a month.

That should cover the grocery bill.

[OrangeBlossomBaby]

That should cover the grocery bill.

It doesn't cover the cost of the house, food, dining out, clothing, golf cart, replacement of appliances, furniture, etc. etc.

It's just amenity fee, trash collection, average sewer, water, gas/electric, insurance, taxes, and development district assessment which would be the bond + maintenance + fire.

The numbers they provide are believable.

[themartianchick]

Like everything else in life, there are innumerable variables. My husband and I took a different path. We were focused on developing multiple income streams, so we worked 9-5 jobs and purchased a few rental properties. Our personal home was a lot less than what we could afford and we never traded up. Over the years we contributed to 401Ks, invested in the stock market and my husband used the IRS 55+ exception to quit his job and begin retirement. We paid off any remaining mortgages with some of the money from his 401K without penalty. We are debt-free and paid cash for a condo in Florida so that we could snowbird. I'm not old enough to withdraw from my retirement accounts yet, but I don't need to. Our properties help our rental income to keep pace with inflation, so we have never needed to have anywhere near a million dollars in investments or cash. I earn a nice bit of cash consulting for a couple of clients and hubby is now old enough to collect social security. We don't live extravagantly, but we do have the luxury of traveling and buying the things that we want without a financial struggle. Ours was just one of the many paths that can lead to retirement.

[bowlingal]

it all depends on your lifestyle. I don't have a million dollars....or anywhere near it. BUT I am living a very active lifestyle, retired, own my home and car and have a nice nest egg. Managing your money is key.

[Jerry F2]

No debt....retire with no debt that is the key. No house payment No car payment
Whatever you charge on credit card ...pay it off every two weeks. Get Airline Credit cards use the points earned for your flights....example round trip to Cincinnati for two. $22 with our points. Savings great...stocks great...other investments great...however no debt is the key.

If you ask Americans, the average answer is an astounding $1.46 million.

That’s per a recent Northwestern Mutual survey of 4,500 U.S. adults, which found retirement cost expectations have spiked since 2020. This year’s average estimate is 53% higher than it was four years ago, when people said they’d need $951,000 to retire.

When it comes to their actual savings, though, Americans are far from achieving their expected retirement needs: Survey respondents reported their average retirement savings is just $88,400 in 2024.

That’s a $10,000 decrease from the average retirement savings recorded by Northwestern Mutual in 2021, when the metric hit its five-year peak of $98,800.

IMO, having $100,000 in your savings when you retire is pretty sad. I know many people the made good money throughout their careers but always seemed to spend more than they made. I think $1.5M is a little low too to retire on especially if you are fully invested. That $1.5M could become $800,000 if another 2008 happens and you might not have to years for your money to come back, all the while taking distributions out of it.

[billethkid]

it all depends on your lifestyle. I don't have a million dollars....or anywhere near it. BUT I am living a very active lifestyle, retired, own my home and car and have a nice nest egg. Managing your money is key.

Thank you. Not much more need to be said!

[vintageogauge]

Agree with most of what you said. However, when interest rates are high, paying cash for a home is not always the best solution. You are throwing away the possibility of earning good interest. Interest rates go back down? Then you pay cash for your home. Hopefully, the period of time you were able to make a good return on your investment will pay for the bulk of your home purchase. In the interim, you enjoy maintenance free living while renting.

And you lose the possibility of appreciation which has been quite significant down here.

[jimbomaybe]

Inflation has an enormous impact to those of us living off our savings and SS checks. But it does not have any impact on whether a working person, whose income is inflating along with the rest of the economy, can save that scary $1.5m number for retirement -- which, by the way, does NOT include their real estate and SS. I just showed you the math -- which included 3% for inflation -- proving that someone with an average $80K income can easily save over $2M in 45 years. The question is not, is it possible. The question is whether the average wage earner has enough common sense to do it. Given the fact that the average American has less than $1,000 in the bank, obviously, most don't.

My biggest fear is that the generation who refuses to show up at the office to work, and thinks the Gooberment ought to pay for their student loans, is going to look at my nestegg one day and say "gimme".

Living off savings is one thing living off income from savings another, SS is more like a government run ponzi scheme kept afloat with taxes at worst, a transfer of wealth at best, for the most part its that people do not plan ahead with any reasonable expectations, will all to often accept the best possible outcome as what they can expect, make excuses for their poor judgments , blame a failure of plan when in fact it was a failure to plan ,, Taxes ? of course the middle class will bear the brunt , that's where the money is, the most consumers , consumers always pay the taxes in the end , taxes are built in every item we use, economic demagoguery sounds good , your a victim so we will take from the people who took it from you, you deserve it , its your right,, in so doing kill the goose that has given you the golden egg

[rsmurano]

Agree with most of what you said. However, when interest rates are high, paying cash for a home is not always the best solution. You are throwing away the possibility of earning good interest. Interest rates go back down? Then you pay cash for your home. Hopefully, the period of time you were able to make a good return on your investment will pay for the bulk of your home purchase. In the interim, you enjoy maintenance free living while renting.

Just the opposite. Right now, interest rates are in the 7% range or higher. If you want a longer term safe investment like money market funds, you are getting 5% which is good, but you are losing 2%, and that is today, it could go higher but it could go lower to < 1% like it was for a decade. If you invest in stocks/funds, a good average of earnings over a 30 year span is 8-10% if you do it right, don’t have high expenses, no finance fees, and you don’t time the market. For example, all of my investments have gone up from 12% to 30% and some stocks have doubled this past 8 months, and I sold everything last week. When you look at the market late last week and tomorrow morning, you will know why.
During the past 20-30 years, I had home loans at 2-3% and got a loan for the max amount possible (80%), and was making triple times on an annual basis during this same time.
As for cash to buy a home, cash is king. I’ve had 2 custom homes built during the past 11 years and I was the bank, I didn’t get a builders loan nor an end loan which saved me over 4% just in loan fees.
In normal years and in most places, when a recession hits, house values go down and interest rates go up. Prime time for somebody with cash to go in and get a great deal, 2008 and the last 2 years are an example of this.

I also think $1.5M is low to have financial independence, this doesn’t take in account if you have a nice pension or 2. My reasoning is the golden rule of taking 4% of your money out of your portfolio to live on so you don’t live past your mooney. $1.5M x 4% is $60k a year which isn’t that much. Somebody mentioned that their expenses are $70k a year and they make $72k. What happens if you want to go on a $10k vacation a couple times a year? Say you need a new car? A new golf cart? Do some renovation? Have a medical issue or you want to help you kids with a big expense? $2k extra isn’t going to cut it. Then what happens when the market goes down for 18-24 months while you are still taking 4% out each year? Next year you might be taking 4%out of $1.2M. Having $2M-$3M gives you breathing room to pay for expenses or luxury items that you want. No reason to cut back on doing things in retirement.

[Cuervo]

A lot of figures have been tossed out and also different lifestyles.
If you have a pension, social security, investments and debt free all these factors must be included into this calculation.
The question should be after you tally your position what type of income will permit you to have the lifestyle you want.
After you considered all normal annual expenses, taxes, food, HOA fees, cable, insurance, what is a decent income to cover that and still let you have a comfortable life here in The Villages?
Is it $100K, $200K, more or somewhere in between, that is the real question.

[Robojo]

“Comfortable “ is a relative term. Some are only “comfortable” if they are dining out three nights a week, golfing championship courses twice weekly …..several nice vacations a year.
Others are “comfortable” with burgers on the grill, executive golfing, free entertainment nightly on the squares.
It’s not money that makes you comfortable. It’s the relationships you build in life.

I'm comfy with a nice cabin and some beefaroni LOL

[Dusty_Star]

A lot of figures have been tossed out and also different lifestyles.
If you have a pension, social security, investments and debt free all these factors must be included into this calculation.
The question should be after you tally your position what type of income will permit you to have the lifestyle you want.
After you considered all normal annual expenses, taxes, food, HOA fees, cable, insurance, what is a decent income to cover that and still let you have a comfortable life here in The Villages?
Is it $100K, $200K, more or somewhere in between, that is the real question.

I think INCOME of 100k, 200k or more, is way more than enough for the Villages. What do others think would be approximate normal annual expenses? This question excludes the extras that change people's lifestyles dramatically. So just as Cuervo said: taxes, food, amenity fees, TV/Internet, insurance (health, property, & vehicles), electricity, landscaping, house maintenance. Isn't it around 50, 55?

[conman5652@aol.com]

Are our monthly social security and pension payments included in your retirement figures

[opinionist]

I retired early up north and had just enough pension income to get by. When I moved to FL and got additional income from Social Security, my income exceeded my expenses by a lot. I am comfortable with much less than other people who like to travel the world. I will soon be forced to draw from my retirement account which I have not needed. Recently I have been going to a Naturopath doctor to get as healthy as possible. Staying healthy with a modest lifestyle is the easy way to not need a huge nest egg.

[rickaslin]

“Comfortable “ is a relative term. Some are only “comfortable” if they are dining out three nights a week, golfing championship courses twice weekly …..several nice vacations a year.
Others are “comfortable” with burgers on the grill, executive golfing, free entertainment nightly on the squares.
It’s not money that makes you comfortable. It’s the relationships you build in life.

I was going to answer but yours covered it nicely !!

[CoachKandSportsguy]

In a perfect world what you say makes sense. Just one part i would offer a different view....in the 50's my grandparents bought their house for 17k, my sibling bought theirs in the early 80's for 56K. Boston mind you. Both sold recently for 1.1 mil and 1.3 mil respectively. You just dont see that kind of appreciation (at least in that region) anymore.

These are not unreasonable rates of appreciation

Your grandparents house appreciated at a bit over 6% a year, assuming 1955 purchase.

Your siblings house appreciated at a bit under 5% a year, assuming 1982 purchase.

over 40-50 years, houses in developed areas appreciate at about 5-6 percent a year. There in eastern MA, there is no more land to develop, the rate of appreciation actually increases as new land dwindles.

The issue is that the workforce configuration has changed. There is much less middle class due to automation, and then the experience and education of the past is being lost as the boomer generation retires. We had parents who lived in the depression, and taught us the manual skills which many now don't have.

So the upward mobility is harder / slower and education and work ethic will always win out. But not as many have that today.

best of luck in our retirements.

[margaretmattson]

And you lose the possibility of appreciation which has been quite significant down here.For some, their bank account, which includes the proceeds from the sale of their large home, is appreciating faster because of high interest rates. Home prices are moving the opposite. Downward!

Which would you prefer? $800,000 proceeds from sale of prior home collecting an easy 5% or more? Or, paying cash for a home with no guaranteed return on investment? There is no sign of home prices moving upward anytime soon. Most likely it will continue to move downward.

In the meantime, I think it is clever that some are choosing to rent and relying on social security and pensions to foot the bill. They are not losing a dime of their savings. Instead, it is earning income.

[Justputt]

IMO, if you sold your primary home to buy and move to TV, i.e. mortgage free., it's pretty affordable here. The estimated monthly expenses the TV puts out are comfortably lower than SSI. Beyond that, unless you eat out and party out a lot, there's not much in expenses unless the great unknown (healthcare) hits hard and exceeds the lifetime cap, so long-term care needs to be factored in. From my very first job I was advised to always max out my 401k, 403b, Keogh, SEP IRA, etc. and that advice served us well, and I passed that advice to our kids. The advice is the same I'd give any young person, "live within your means, buy what you need, and think carefully about things you just want."

[jimbomaybe]

IMO, if you sold your primary home to buy and move to TV, i.e. mortgage free., it's pretty affordable here. The estimated monthly expenses the TV puts out are comfortably lower than SSI. Beyond that, unless you eat out and party out a lot, there's not much in expenses unless the great unknown (healthcare) hits hard and exceeds the lifetime cap, so long-term care needs to be factored in. From my very first job I was advised to always max out my 401k, 403b, Keogh, SEP IRA, etc. and that advice served us well, and I passed that advice to our kids. The advice is the same I'd give any young person, "live within your means, buy what you need, and think carefully about things you just want."

I couldn't agree more,, what seems like common-sense to some, seems like an overly austere lifestyle to others,, not so, at least to me and I suspect you, but it is a matter of one's emotional relationship to money, like credit it can be your master or your servant , instant gratification or looking at a farther horizon ?

[MX rider]

it all depends on your lifestyle. I don't have a million dollars....or anywhere near it. BUT I am living a very active lifestyle, retired, own my home and car and have a nice nest egg. Managing your money is key.

100% spot on.

[CoachKandSportsguy]

There is a constant battle by financial companies for your money from two angles:

The short term spending credit companies
The long term investment management companies

The short term spending ads look to satisfy your immediate needs and desires
The long term saving ads play on the fear of uncertainty of the future and your financial safety and dreams of unlimited retirement options

One of the unrealistic long term planning assumptions is that you will keep your current lifestyle into retirement.
Hence you need an excessive amount of savings to fund this scenario.

Most people will downsize housing and slow down in activities just from aging.
The $200K lifestyle in New York City requires a lot more savings than in TV. and those people probably will have a different retirement than the average person across the country.

IMO, TV represents the average middle class working retirement to an active community. TV offers a lower cost of retirement with its structure than most working lifestyles, and therefore requires a specific financial analysis than one's working income and cost of living scenario. That's where long term advertisements fail when trying to instill fear into your preconceived notions of retirement. They just assume the same location, and the same lifestyle, or dreams of doing everything you didn't do while working, but that is also unrealistic just due to aging and family issues. . . I just watched one on TV on Bloomberg.

So there are several people on here who have retired without touching savings, or have relatively small savings and had made their retirement comfortable with social security. One will probably do better, have more options with a larger savings and income, but comfortable here in the Villages is very doable with social security and a moderate savings from employment of $300K to $1,000K

just keep it in perspective and realize that retirement will not be the same as your working lifestyle if you choose wisely for health and longevity, even golf becomes more difficult as you age. .

good luck in our retirements.

[Shipping up to Boston]

There is a constant battle by financial companies for your money from two angles:

The short term spending credit companies
The long term investment management companies

The short term spending ads look to satisfy your immediate needs and desires
The long term saving ads play on the fear of uncertainty of the future and your financial safety and dreams of unlimited retirement options

One of the unrealistic long term planning assumptions is that you will keep your current lifestyle into retirement.
Hence you need an excessive amount of savings to fund this scenario.

Most people will downsize housing and slow down in activities just from aging.
The $200K lifestyle in New York City requires a lot more savings than in TV. and those people probably will have a different retirement than the average person across the country.

IMO, TV represents the average middle class working retirement to an active community. TV offers a lower cost of retirement with its structure than most working lifestyles, and therefore requires a specific financial analysis than one's working income and cost of living scenario. That's where long term advertisements fail when trying to instill fear into your preconceived notions of retirement. They just assume the same location, and the same lifestyle, or dreams of doing everything you didn't do while working, but that is also unrealistic just due to aging and family issues. . . I just watched one on TV on Bloomberg.

So there are several people on here who have retired without touching savings, or have relatively small savings and had made their retirement comfortable with social security. One will probably do better, have more options with a larger savings and income, but comfortable here in the Villages is very doable with social security and a moderate savings from employment of $300K to $1,000K

just keep it in perspective and realize that retirement will not be the same as your working lifestyle if you choose wisely for health and longevity, even golf becomes more difficult as you age. .

good luck in our retirements.

Good post Sportsguy
With the exception of several posts, not mentioned enough is health. Pretty obvious something life altering or catastrophic will upend the best managed retirement plan. So in addition to luck in retirement is best wishes for good health and daily practices

[Caymus]

There is a constant battle by financial companies for your money from two angles:

The short term spending credit companies
The long term investment management companies

The short term spending ads look to satisfy your immediate needs and desires
The long term saving ads play on the fear of uncertainty of the future and your financial safety and dreams of unlimited retirement options

One of the unrealistic long term planning assumptions is that you will keep your current lifestyle into retirement.
Hence you need an excessive amount of savings to fund this scenario.

Most people will downsize housing and slow down in activities just from aging.
The $200K lifestyle in New York City requires a lot more savings than in TV. and those people probably will have a different retirement than the average person across the country.

IMO, TV represents the average middle class working retirement to an active community. TV offers a lower cost of retirement with its structure than most working lifestyles, and therefore requires a specific financial analysis than one's working income and cost of living scenario. That's where long term advertisements fail when trying to instill fear into your preconceived notions of retirement. They just assume the same location, and the same lifestyle, or dreams of doing everything you didn't do while working, but that is also unrealistic just due to aging and family issues. . . I just watched one on TV on Bloomberg.

So there are several people on here who have retired without touching savings, or have relatively small savings and had made their retirement comfortable with social security. One will probably do better, have more options with a larger savings and income, but comfortable here in the Villages is very doable with social security and a moderate savings from employment of $300K to $1,000K

just keep it in perspective and realize that retirement will not be the same as your working lifestyle if you choose wisely for health and longevity, even golf becomes more difficult as you age. .

good luck in our retirements.

Some people can't seem to be able to downsize in retirement. I noticed an article in my newsfeed today about a 76-year-old widower who is complaining that he can't afford the real estate taxes ($20,000) from his $5,600 monthly retirement income. I am thinking that many people would be happy with that level on income. He wants to know if he needs an advisor.

[Dusty_Star]

Some people can't seem to be able to downsize in retirement. I noticed an article in my newsfeed today about a 76-year-old widower who is complaining that he can't afford the real estate taxes ($20,000) from his $5,600 monthly retirement income. I am thinking that many people would be happy with that level on income. He wants to know if he needs an advisor.

Most of those article I read, like from MarketWatch are selling advisors. So in the 76 year old widower's case, yes he needs an advisor.

[Laker14]

Most of those article I read, like from MarketWatch are selling advisors. So in the 76 year old widower's case, yes he needs an advisor.

I'm not sure he needs an advisor, but he could definitely benefit from following some good advice.

[Laker14]

Exactly. My middle daughter and her husband both have good jobs (both 6 figures +), save like crazy and have a very nice nest egg set aside to buy a home. No student debt for either of them, both funding their 401Ks for retirement...

Unfortunately, they are looking in Arlington, VA, where a "fixer upper" is $750-$1 million...

Yes, they could afford the low end of that, but their mortgage payments would be $6K/month... And that doesn't include remodeling of the very dated homes...

I am not directing my observations specifically at your offspring, but having observed mine, and those of close relatives and friends, I see many of them feeling put out by how hard it is to become wealthy. However, I see a lot of decisions being made that are making it harder than it needs to be.
Included among these are choices to live in high cost-of-living areas. True, the jobs pay more than they might in lower cost-of-living areas, but by the time you factor in costs of commuting, in time and money, and how much of that extra income gets chewed up in taxes and real estate costs, one might often do better living somewhere else.

More obvious to me is the tendency to refuse to "do without". I know young people who aren't saving a nickel for retirement, but must drive late-model Audis, or BMWs, and whose kids must participate in expensive activities, and they absolutely must take vacations to Disney World, and must "upgrade" the home they could barely afford in the first place,,,etc etc you get the point.

I know this makes me sound like my depression era dad, but living within one's means means occasionally saying "nope, can't do that"...and a lot of young people complaining about how hard it is to grow wealth simply haven't learned how to do that.

[Rainger99]

there's not much in expenses unless the great unknown (healthcare) hits hard and exceeds the lifetime cap

Is there a lifetime cap on health care expenses? How much is it??

[CoachKandSportsguy]

I am not directing my observations specifically at your offspring, but having observed mine, and those of close relatives and friends, I see many of them feeling put out by how hard it is to become wealthy. However, I see a lot of decisions being made that are making it harder than it needs to be.
Included among these are choices to live in high cost-of-living areas. True, the jobs pay more than they might in lower cost-of-living areas, but by the time you factor in costs of commuting, in time and money, and how much of that extra income gets chewed up in taxes and real estate costs, one might often do better living somewhere else.

More obvious to me is the tendency to refuse to "do without". I know young people who aren't saving a nickel for retirement, but must drive late-model Audis, or BMWs, and whose kids must participate in expensive activities, and they absolutely must take vacations to Disney World, and must "upgrade" the home they could barely afford in the first place,,,etc etc you get the point.

I know this makes me sound like my depression era dad, but living within one's means means occasionally saying "nope, can't do that"...and a lot of young people complaining about how hard it is to grow wealth simply haven't learned how to do that.

Hard times create strong people
Easy times create soft people.

Be thankful that the boomers had parents from the Great Depression (GD) who taught us how to survive and passed along a strong work ethic.

I was broke at the age of 40+, 10,000 cash, 10,000 IRA, $15 VISA bill, no income.
with two kids, a witch of an XWife and needing to put 2 kids through college. Did so, and recovered all the money lost, and still have not received any inheritance or massive lottery winnings, or any direct monetary support.

worked my ass off with technology skills, took care of my aging parents, whatever they wanted / need while i lived in my high school bedroom, saved everything, paid off college loans early, and continuing through last year when I had enough.

My dad was whining once when recovering in a skilled nursing facility. I went right to :
You don't get what you want; you get what you work for

he started working towards recovery versus just wanting to go home. My wife passed this along to her deadbeat sister, who without anybody to leach off, did find a job but they also did not like her boomer follow rules mentality either. .

good luck, we deserve our hard work rewards

[Stu from NYC]

Hard times create strong people
Easy times create soft people.

Be thankful that the boomers had parents from the Great Depression (GD) who taught us how to survive and passed along a strong work ethic.

I was broke at the age of 40+, 10,000 cash, 10,000 IRA, $15 VISA bill, no income.
with two kids, a witch of an XWife and needing to put 2 kids through college. Did so, and recovered all the money lost, and still have not received any inheritance or massive lottery winnings, or any direct monetary support.

worked my ass off with technology skills, took care of my aging parents, whatever they wanted / need while i lived in my high school bedroom, saved everything, paid off college loans early, and continuing through last year when I had enough.

My dad was whining once when recovering in a skilled nursing facility. I went right to :
You don't get what you want; you get what you work for

he started working towards recovery versus just wanting to go home. My wife passed this along to her deadbeat sister, who without anybody to leach off, did find a job but they also did not like her boomer follow rules mentality either. .

good luck, we deserve our hard work rewards

We certainly deserve the fruits of our hard labor

[Laker14]

Hard times create strong people
Easy times create soft people.

Be thankful that the boomers had parents from the Great Depression (GD) who taught us how to survive and passed along a strong work ethic.

I was broke at the age of 40+, 10,000 cash, 10,000 IRA, $15 VISA bill, no income.
with two kids, a witch of an XWife and needing to put 2 kids through college. Did so, and recovered all the money lost, and still have not received any inheritance or massive lottery winnings, or any direct monetary support.

worked my ass off with technology skills, took care of my aging parents, whatever they wanted / need while i lived in my high school bedroom, saved everything, paid off college loans early, and continuing through last year when I had enough.

My dad was whining once when recovering in a skilled nursing facility. I went right to :
You don't get what you want; you get what you work for

he started working towards recovery versus just wanting to go home. My wife passed this along to her deadbeat sister, who without anybody to leach off, did find a job but they also did not like her boomer follow rules mentality either. .

good luck, we deserve our hard work rewards

I remember my dad putting water in the empty ketchup bottle, and shaking it up so we'd magically have more ketchup. I think I was in high school when I told him that it saved money in two ways: it stretched the ketchup and it reduced usage because nobody would use that watery stuff anyway. He laughed, but he threw the watery ketchup away and never did it again. But then, he had more money by that point in his career.
And then, I heard for the millionth time, what it was like to grow up during the Depression.

I am pretty sure Dad was one of Monty Python's Four Yorkshiremen

[Shipping up to Boston]

Hard times create strong people
Easy times create soft people.

Be thankful that the boomers had parents from the Great Depression (GD) who taught us how to survive and passed along a strong work ethic.

I was broke at the age of 40+, 10,000 cash, 10,000 IRA, $15 VISA bill, no income.
with two kids, a witch of an XWife and needing to put 2 kids through college. Did so, and recovered all the money lost, and still have not received any inheritance or massive lottery winnings, or any direct monetary support.

worked my ass off with technology skills, took care of my aging parents, whatever they wanted / need while i lived in my high school bedroom, saved everything, paid off college loans early, and continuing through last year when I had enough.

My dad was whining once when recovering in a skilled nursing facility. I went right to :
You don't get what you want; you get what you work for

he started working towards recovery versus just wanting to go home. My wife passed this along to her deadbeat sister, who without anybody to leach off, did find a job but they also did not like her boomer follow rules mentality either. .

good luck, we deserve our hard work rewards

You needed to get that one off your chest, huh SG! ;)
Just kidding. I appreciate your story. Unfortunately, everyone can relate to it as the 'ol saying goes...you can pick your friend's but you cant pick your family! Although in the case of a wife/sister in law, guess you can!

[fdpaq0580]

You needed to get that one off your chest, huh SG! ;)
Just kidding. I appreciate your story. Unfortunately, everyone can relate to it as the 'ol saying goes...you can pick your friend's but you cant pick your family! Although in the case of a wife/sister in law, guess you can!

If I knew then what I know now, I would be rich, have had more sex, and been way more fit and healthy! ____ Nah. Too much trouble, and things turned out just fine.

[Rainger99]

According to this video, if you are 65 plus, you are in the
top 50%, if you have a median net worth of $281,000;
top 10%, if you have a median net worth of $1,900,000
top 5%, if you have a median net worth of of $3,200,000
top 1%, if you have a median net worth of $16,700,000.

The numbers are from 2019.


https://www.youtube.com/watch?v=eb4U4k0cwDk

[manaboutown]

. Unfortunately, everyone can relate to it as the 'ol saying goes...you can pick your friend's but you cant pick your family! Although in the case of a wife/sister in law, guess you can!

The way I heard it is "You can pick your friends and you can pick your nose but you can't pick your friend's nose."

[Laker14]

The way I heard it is "You can pick your friends and you can pick your nose but you can't pick your friend's nose."

That was good information to have way back when I was trying to survive 5th grade, and it's still true now as I live my retirement dream. Thanks for the reminder.

[Two Bills]

I remember my dad putting water in the empty ketchup bottle, and shaking it up so we'd magically have more ketchup......

I am pretty sure Dad was one of Monty Python's Four Yorkshiremen


"You had watered ketchup? and he thought he had it hard. When I were a lad............................."

[fdpaq0580]

100% depends on you, your expectations, willingness to adjust our lifestyle, ability to know what you need vs what you want. "Comfort" means a lot of different things to a lot of different people.

[manaboutown]

Guess I'll have to pass on this. Rolls Royce Phantom EWB. https://www.ogaracoach.com/new/Rolls-Royce/2024-Rolls-Royce-Phantom-a975a62f0a0e081d019f8d90df6f903f.htm?store=OGARAHI LLS&gad_source=1&gclid=Cj0KCQjwiYOxBhC5ARIsAIvdH52S8m52x4gKWSRC3Nqy 9eaFrWO2PfC4NVHyNmtO9_AlsK3ds7l5tqEaAidNEALw_wcB

[CoachKandSportsguy]

According to this video, if you are 65 plus, you are in the
top 50%, if you have a median net worth of $281,000;
top 10%, if you have a median net worth of $1,900,000
top 5%, if you have a median net worth of of $3,200,000
top 1%, if you have a median net worth of $16,700,000.

The numbers are from 2019.



Meaningless unless you are competing for some meaningless trophy on your street with the size of your assets and house. .

[Stu from NYC]

Meaningless unless you are competing for some meaningless trophy on your street with the size of your assets and house. .

Can I get a virtual trophy?

[Shipping up to Boston]

Meaningless unless you are competing for some meaningless trophy on your street with the size of your assets and house. .

Are you saying they're 'compensating'...SG?! ;)

[ElDiabloJoe]

I'm having a hard time with this (original post) claim. 1.46M?!? Okay, is that all in cash assets to be drawn down over time? What about net worth and home/2nd home values? How about the future stream of pensions? If I have a pension of 4000 / month, and I'm 55, that would be $1.44M over the next 30 years. How is that figured into how much one needs to retire "comfortably?"

[rsmurano]

IMO, the $1.5M is over and above your house value. You don’t make money from your home while living in it, so the house is only good if you want your net worth to be higher.
I didn’t pay off my homes until I was financially secure in investments mainly because I was making more money on my investments compared to paying off my home loan. Some days, I would make more in the market than the yearly cost of a mortgage.
I buy new cars every 2 years, when I was working and in retirement, why should I change when I’m retired. So if your expenses are a couple thousand less every year, what happens if you buy a new $50-$60,000 car? You know you will have too at some point.

Also, renting is like throwing your cash away. Your rent is covering the owners mortgage and all expenses plus a profit. The difference is, the owner will reap gains when they sell and the renter walks away with nothing. If you think the sky is falling in the real estate market, you are wrong. I know friends in TV that has just sold for $200,000 profit in only 1-2 years. Location location location.
If you pay off a mortgage with little in savings, if you ever need extra cash for an emergency for example, your options are taking a secured loan on the house or do a reverse mortgage, which neither are good choices.
$1.5M is way less than what you need in investments without adding in your home.

[Laker14]

"You had watered ketchup? and he thought he had it hard. When I were a lad............................."


Luxury.....