Retirement Secrets

[motion]

This is something I think about often, but just cannot figure out. How do most Americans retire comfortably? I know GD well that most American couples don't retire with 2-5mm in assets aside from their primary home. From what I gather, its more like $50K in assets average. I know a lot of you midwest guys have paid for homes that are worth sub $100K, but in most parts of the country, a decent home is a half million plus. I also see a lot of people 50+ refinancing their homes for 15-30 years. So, how do they pull it off? I have no idea what the average monthly SS payment is... $2500? That doesn't seem like it would go very far. Do people just keep working until they're 80? Where does the money come from? Kids? Inheritance?

[dmcummins]

I think if you have only saved up around 50k your not going to be doing much in retirement. If you have a small, paid for house in a low cost of living area you could probably get by on SS. You will be working till 65-67 or whatever your Full SS age is. Then your going to be staying close to home as you can't afford to do much else.

I've been retired now for 8 years and I spend more now than when I was working. I've got a few years till SS age so that money will just be a bonus. I do keep track of my spending and assets to make sure I'm OK financially.

[pavulon]

The most reliable and simple way to be comfortable would be to lower or drop one's expectations of winning (or losing) at retirement. To me, that would bring freedom which I hope will be the best thing about it.

[recycled sixtie]

A big part of retirement is not to go crazy on the spending. I total up everything I spend each month so I know where the money is going. Another general rule is not to have any debts when you retire.

Live in a modest house that is paid for and then you have more money for say travel and other things. Property taxes are less on a smaller home.

As regards investments stocks should be a priority. Good returns as compared to putting it in the bank. Look at US stock performance over the last several years.

If you can wrench on your own cars so much the better especially if they are luxury brands. Otherwise stick to basic transport like Toyota if you don't wrench.

Keep busy doing either volunteering or a part time job. I find as I approach 70 yo I don't have the energy to do manual work for long so I volunteer as the Treasurer on our condo board. If I want to do manual work I putz in our garden.

Keep your house as long as you are physically able. You have more control over expenses. Our condo which we rent out takes up half the rent in expenses. Folks living in houses seem happier than those that live in condos.

Hobbies? My neighbour makes his own wine. He passes on a bottle or two to us once is a while. Find an inexpensive hobby. eg. vegetable garden.

Cheers, Guy

[KNS]

Originally Posted by motion

From what I gather, its more like $50K in assets average.

If one is approaching retirement with just $50K in assets it's going to be a very thin and meager lifestyle

[motion]

Originally Posted by KNS

If one is approaching retirement with just $50K in assets it's going to be a very thin and meager lifestyle.

Its even worse than I thought: Americans' Average Net Worth by Age -- How Do You Compare? -- The Motley Fool

[Crowbob]

Hookers, blow, Porsches, burgers and fries, booze, cigs. Any problems that come up will be short-lived.

[recycled sixtie]

If you can find an old copy of "The Millionaire next door" this book could save a person thousands of $$$$ and can make retirement much more affordable.

[Jim Richards]

Originally Posted by recycled sixtie

Another general rule is not to have any debts when you retire.

Great advice.

[motion]

Originally Posted by recycled sixtie

If you can find an old copy of "The Millionaire next door" this book could save a person thousands of $$$$ and can make retirement much more affordable.

Boring. Not for me. I prefer to live life.

[Kistle]

Great thread. I think about the same. How do you know how much is "enough". Certainly lifestyle in retirement is the BIGGEST driver of what is "enough". If you want to sit on a lawn chair all day in your front yard in the middle of Iowa (seriously...not that there is anything wrong with that), you could probably get by with $50K in the bank and Social Security income. If you live in a $350K house, want to have a hobby vehicle and a few other relatively inexpensive interests, and maybe take a reasonable trip once or twice a year...how much does that require? If you want to live in a $600K house, have another vacation home on the beach or in the mountains, have a $50-75K fun car, travel 4-5 times per year, including internationally, how much does that take?

Just hard to ever put REAL numbers on this stuff. $5M should cover all of the above, but where are the cutoffs? No easy answer, because there are a LOT of other variables. How much do you spend on entertainment, dining out, booze, etc....

But good topic, and we have the right audience here to get some specifics if people will share some semi-personal stats. Thanks for starting the discussion, Richard.

JA

[recycled sixtie]

Originally Posted by Crowbob

Hookers, blow, Porsches, burgers and fries, booze, cigs. Any problems that come up will be short-lived.

Well Motion if there was a continuum between Crowbob's post and the Millionaire next door I am sure you will find a comfortable position.

Crowbob if your humour is anything to go by then it is time for you to write a book on retirement lifestyle as you suggest. Lots of explicit pics rather than too many words would guarantee it to be a bestseller....

[Seahawk]

CALPERS retirement, baby.

I am printing money

[VINMAN]

I retired from my "real job" after 31yrs, back in December. Went from just over six figures, down to half that. Starting to feel it now, but I still don't regret doing it. I'm only 50, so still have years of work ahead of me, but I'm doing stuff here and there that I actually enjoy doing. And best of al,l it's on my own terms and schedule.
I took a lump sum payout, instead of a monthly pension. Rather be able to reinvest my $$ instead if getting it in dribs and drabs and just blow it.

.

[masraum]

Originally Posted by motion

How do most Americans retire comfortably? --->
From what I gather, its more like $50K in assets average

^ those folks don't retire comfortably. Those folks scrape by as best as they can and are probably pretty miserable.

Other folks learn to tighten up and get by on SS.

[devodave]

After about 15 years of paying supposedly experts to manage part of my retirement funds, I am now returning to self-management of all of the bits. Did very well in my previous employer's retirement plan (1993-1999), but lost over 75% due to faulty info provided by my advisor when I moved to a managed investment company. Fast forward 15 years, a new investment firm, and my third advisor, and still have only recovered about 35% of my 1999 balance. My current employer, the Federal Government, has the Thrift Savings Plan (TSP) which has been a great investment vehicle for me over the years. Five individual funds and five life cycle funds provide a mix that is easy to manage and make educated choices. I am moving my IRA back to the TSP, which is where it originated back in 1987. My Roth, started in 2003, has only earned about 7% since inception, compared to my wife's Roth that has earned about 40% over the same time period, so that is moving to the TSP as well. The TSP has provided me well since I restarted back in 2000. I certainly can't do much worse. The point of all of this is that one can and should take control of their retirement accounts to ensure they can afford the retirement that makes sense for them. Obviously, having investment firms work for me has not been the success I was looking for, but others have been very successful with help. Have a plan, enact it, and assess it at least annually to ensure you are on the path you want.

[sc_rufctr]

I'm 50 so I'm 15 years from retirement... And that's all I think about.

I save every cent I can. That's it. No real plan just save save save. No "new" cars or stupid expenditure.
I've got a work pension plan that's doing OK but I'll probably still need some part pension (SS) to get by.

Mariage? Doubt it unless she's loaded. (I'm serious)

[Seahawk]

If I ever see a nickle of SS it will all go to funding my favorite charity, me. As the head of the charity, I will ensure every penny is spent stupidly and irrationally, without any socially redeeming virtue in mind.

I do plan on working at something as long as I am physically and mentally able. I have quenched nearly all of my wanderlust and really don't have an overarching desire to travel a bunch. I understand those that do and applaud the spirit. The list of places I haven't been is small and those places I have been that I would want to return to even smaller.

I read everyday and have a list of places I want to walk, follow history, get a sense the time and place. I have done this for years, especially with history books. I have walked parts of the plains in search of Indian campaigns and calvary expeditions, found obscure castles and remnants of empires, been to small towns mentioned in novels.

The top of my list is Mongolia. I want to traverse many of the paths of G. Khan.

Since my son's accident we have been plotting and scheming on expanding our little farm here. I have gotten really smart of agra-tourism and specialty crops. We'll see. Nothing would make me happier than to see my son take this place. Or Daughter.

I really have everything I need in the fun department, there are no luxuries I yearn for. I like to build things and either run or sit on the board of four vibrant companies. With my new hip I am pain-free and loving it.

Retire? Nope. I worked hard to get here, the place where I have the freedom to choose what I pursue. This is fun to me.

[recycled sixtie]

One more piece of advice and I will try and shut up. Really. If you are with your significant other or spouse try and stay married. If not then end up losing half. If the latter road is taken then it could be Crowbob's approach. Hmmmm....

[Baz]

Great question and thread. Timely for many of us.

I think overall retirement can mean different things to different people. It's important to be financially comfortable but the amount to make that happen will vary wildly, just as everyone's current lifestyles here vary from each other.

My "plan":

I already live in a destination place - a small coastal community with beautiful natural resources. My house is 2 blocks from the ocean and 1 block from the Intercoastal Waterway so I don't even have to drive to get to the honey hole........just a couple minute walk and I'm there and a 3 minute drive to put my boat in.

For hobbies....I like to surf, ride my bike, and garden. From those components I find much satisfaction. I also enjoy researching information about the plant world and with the Internet there's always more to discover and share with friends.

I currently own my own landscaping business and as a strategy heading towards the future I will ease into less physical activity and more consultation, design, and management. I don't see myself ever fully quitting what I do - because I love it so much.

How could one ever stop doing what they love?

Retirement obviously is going to mean different things to different people and they have to figure out what makes them happy in life. That's the key.