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URL:  http://boards.fool.com/quotsolid-observation-in-addition-to-hopefully-25188547.aspx

Subject:  Re: Are Americans saving too much for retirement Date:  2/18/2007  10:50 AM
Author:  telegraph Number:  2275 of 59135

"Solid observation. In addition to hopefully not having a mortgage, you won't need to build retirement/investment accounts after you retire, because presumably you've already done that. I've never understood retirement calculators that are based on salary rather than spending. There's what I earn, and then there's what I need to maintain my lifestyle. In retirement, all I need is what it takes to maintain my lifestyle, which is much less than my annual earnings during my pre-retirement years. Anyway, I thought this was a very useful observation."

Most calculators take into account contributions to 401K/IRA/fed pension plan .....but very few take into account additional savings or paying down debt (extra mortgage payments, paying off loans, etc).

For many who retired early, they were saving 25-50% of income. Living on 1/3rd of salary (LBYM).

Worse, many are off on the SS amount (assuming you will work to 65/66/67).....and don't take into account reduced benefits if you retire early with less than 35 years contributions to SS.

Doing an accurate projection of current and future expenses per year helps. You usually have to add in increased expenses for health insurance and other things (dentist visits, eye care) no longer covered by most insurance plans. You're lucky if you get all those as benefits...but most now have to pay for retiree health care, although the rates are bargains compared to private plans.

t.



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