[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]

Originally Posted by 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.

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]

Originally Posted by 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.

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]

Originally Posted by 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.

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

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]

Originally Posted by 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

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]

Originally Posted by Randall55

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]

Originally Posted by 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

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

[dewilson58]

Originally Posted by huge-pigeons

(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.

[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!