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Subject:  Re: Calculating Retirement Funds Date:  8/7/2016  4:54 PM
Author:  aj485 Number:  1732 of 1929

Merrill Lynch at Bank of America is saying a million dollars is about the minimum anyone needs.
If you also go to that MINT site they also don't account for any income you might get other than your IRA account. They just want to know what you have right now and what you earn right now and then come up with these eye popping numbers.

The advisors basically want me cram as much money as I can into my account and say that you have to prepare for the worst, and hope for the best.

Especially at your age, if you are using calculators that don't account for pension or SS income, that blindly assume you will need at least 80% of your current income, and don't account for any accounts other than IRA/401(k) accounts, then you are using the wrong calculators.

The calculator I have found most useful is Fidelity's: It's more complex than the simple calculators that I've seen at many of the other sites, which just ask for your age, current income, current savings, amount saved per year, and when you want to retire.

But the complexity allows for you to adjust the plans for things like:
- How much do you need per year, starting out?
- What do you anticipate various inflation rates to be?
- Are you going to have single year large income (like from selling a house) or expense (like needing a new car or roof) events, and when do you anticipate those?

The Fidelity calculator also runs simulations (rather than just using averages) and allows you to assume either an underperforming market or an average market, and then gives you likelihood of success.

I was actually planning on saving with that retirement income so I could have cash for that new roof you mentioned and etc. Saying I don't need to save as I currently do is something I have not thought of. I just assumed I would need to save using just the assured income in case there is a market melt down and I don't want to pull money out of the rollover. Then my cash on hand is the fall back.

Good plan?? Bad plan?? I am floundering.

That sounds like an overly conservative plan to me. From your next post, you also said:

I am assuming when I reach 70.5 and Uncle Sugar forces me to take money out of the roll over that I would pay the taxes on the withdrawal and then re-invest the balance in something fairly conservative. With any luck I won't need that money.
Except the one place that way back in the dark ages offered a pension and I was vested I left that money and that is what is going to provide 50% of my retirement income the other 50% being Social Security.

Looks to me like you believe that your pension and SS will provide your living expenses, once you have your mortgage paid off. So, do you think your extraordinary expenses (new roof, new car, etc.) will consume more than the rollover IRA money will pay for, keeping in mind that if your rollover IRA is at $650k (i.e. no growth between now and then) your initial RMD will be $23,723?

My guess, based on just what you've shared, is that you have plenty to retire right now, including covering your mortgage, but that you haven't actually looked closely enough at the numbers to convince yourself of that. Go sit down with a realistic calculator, making sure you understand the assumptions that are being made, and see if you can convince yourself of that.

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