I had always lived a pretty simple life and never used credit cards to buy what I couldn't pay off that month. The exception was appliances that I could usually find a 90 days as good as cash deal on. I had bought most of the toys and realized that wanting them usually surpassed owning them.
I contributed heavily to my 401k plan for the last 5 years of my working career and also put 5-6k into a Roth. I realized I was living on about what I would get in retirement between SS and a small pension. The mortgage was payed off and i had no bills.
For two years I forced myself to live on that amount and I retired at the end of May (at 61 years and 11 months). My total income is SS and a $357 pension (that's after they take out $153 for health insurance). I don't anticipate having to touch my retirement savings for at least four years and then i will not have to withdraw more than 2-3% a year - probably less.
Nobody knows how long they are going to last. If you wait till you are sure you have enough to meet any contingency, you might not make it. Pare back and try living a simpler life, the reduction in stress alone is well worth it.
bobc47
of MA
@
Nov 10, 2009 14:17:27 PM
Who Said You Need Millions?
Many retirement calculators are sponsored by mutual fund companies, insurance companies or others in the retirement funding business, so they have an incentive to skew the results to indicate that you need to save more than you may need. For these businesses, the more you save means the more fees and profits they make. While I am not suggesting that those planning for retirement should save less, I think prospective retirees should not rely on these retirement industry sponsored retirement calculators.
There are, however, alternatives. Personally like two calculators both of which are available for free. One is called "Firecalc" (http://fireseeker.com/) and the other is called "ESPlannerBasic" (https://basic.esplanner.com/). Note that ESPlannerBasic is free but the group that created it also offers more detailed calculators that you can purchase. I haven't tried those. Both of these calculators allow you to adjust many of the variables so you can look at your retirement plan from a multiple of perspectives and "what ifs." I find that it's actually fun running the various scenarios. Good luck.
Jonathan Edelfelt, author of Who Said You Need Millions? Retirement Strategies for the Rest of Us.
http://www.whosaidyouneedmillions.com
http://whosaidyouneedmillions.blogspot.com/
Jonathan Edelfelt
of TX
@
Nov 04, 2009 21:30:55 PM
Another Factor
Another factor to consider is that most expenses (other than healthcare) naturally decrease in retirement. A recent study by the University of Michigan Retirement Research Center indicates that for many people, high retirement income replacement ratios (70% +) may not be necessary.
bobc47 of MA @ Nov 10, 2009 14:17:27 PM
Jonathan Edelfelt of TX @ Nov 04, 2009 21:30:55 PM
Paul of MI @ Nov 04, 2009 15:49:37 PM
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