How much would you need..

[miss_thenorth]

Assuming one works until the age of 65, the couple is reasonably healthy, (living in Canada where there is OHIP), plans on living a modest (SS) retirement, with no travel plans or any extravagances, how much would you think would be needed in retirement savings--by the time they are 65.

(yes, its about me and hubby, I just want to keep it neutral--wha would you think the average frugal /modest type would need)

 

[valmom]

More than I'm ever going to have. I sort of gave up planning for retirement when I read that you need a million dollars in the bank to not run out of money over your retirement. I'm going to work until I drop. I picked pharmacy because you can do that.

 

[Dace]

Ok since no one has really ventured a guess.....

It would be obvious to say 'whatever you spend times how ever many years you plan to live' but that is too simplistic.

Check out this link http://www.rjlwm.com/content/buckets.swf

He has a radio show and teaches people how t manage their money. If I had any money I would certainly take his advice, but alas.....


Maybe somewhere on his site you can find some sort of retirement calculator, but I have hear him talk to folks many times about taking what they have and diversifying it (in safe ways) so that they can draw a percentage for the rest of their life without decreasing the principal.

Not sure if that helps or not

 

[miss_thenorth]

My parents worked like dogs all their lives in factories. They never borrowed money, never had debt except their mortgage (which was paid off in 7 years). About 10 years before they retired, they started saving for retirement. My dad retired at 60, my mom at 58.

When they retired, they had $250K invested. They have been retired now for over 10 years, and are seemingly doing fine. they go on vacations, --summer and winter, they just bought a brand new car. But other than that, they don't really spend any money--dinner here and there.

Mind you, they do get some money from the government, but when they decided to retire, all they had was $250K and they thought it was enough, and they seem to be doing fine.

Do you really think you need more than that? (remember we are Cdn, so we don't have halth car costs to think about)

Do we believe what the financial guys tell us? cuz they told my mom and dad they needed more.

Hubby and I are trying to figure out stuff, as far as the kids education and retriement savings are concerned.

 

[Dace]

Being self employed and having just used everything we had to try to save our business and home in a crashing economy....we are left with nada, so I am not the best person to jump in here.

I agree that a lot of experts are dumb, but if you do your research and come to your own conclusions oyu will be better off.

$250K seems really low to me, but I am also coming from one of the most expensive places to live

You need to have enough that you can draw on the interest while having minimal impact on the principal.....that would be quite a bit more. BUT if your parents are making it work you should talk to them.

 

[miss_thenorth]

We have talked to them, and it works for them. I suppose we should talk again about it. Mind you, my dad is in his 70's and mom is 7 years younger. Dad's health is declining.

My thinking is that $250K is rather low too. Not to mention that when we retire, it will be in about 20 or so years. the cost of everything will go up.

but hubby thinks tha becasue my parents did it with thatt amount, that is all we would need too. I beg to differ.

Hubby is acting like a three year old again--throwing a temper tantrum b/c he want s a new toy. I need to bring him back down to earth.

I'm gonna call my mom and see how it is for them now.

 

[abifae]

Invest in family LOL. Someone who'll take you in and help take care of you in exchange for you puttering around, babysitting a bit, and talking about the old days

That's MY retirement plan. I have nieces.

 

[ORChick]

Read "Your Money or Your Life" by Joe Dominguez.

 

[miss_thenorth]

thanks, I'll look for that book at the library.

I talked to my mom. She said they had closer to $400K saved.

they get canada pension and old age security plus some from their RRIFs. The get about $2000/month. they bank what is not needed and with that banked money, they buy their new cars and vacations and such.

This will give me some numbers to work with.

 

[patandchickens]

Based on having spent quite a lot of energy and research trying to figure this out when I married a Canadian almost 8 years ago, can I strongly suggest you LOOK AT CANADIAN SOURCES OF ADVICE, not so much U.S. ones. Reason being, there are some really big differences between the two countries even aside from the healthcare issue.

It has been long enough that I do not honestly remember what sources I looked at and they've probably been superseded by others now anyhow, but do a buncha googling and library reading, you will find lots of *canadian* info.

One thing to remember is that you cannot necessarily assume that you will have no healthcare needs beyond what the gummint pays for. Unless you have other coverage, things like dental and prescription drugs will be largely on your own tab, and when you get older they can potentially be LARGE expenses.

One big consideration is whether you will have a mortgage when you retire, or will fully own your place (and have it be of a value sufficient to cover "trading it in" for an apartment in town, or in a retirement home, if and when that might become necessary). If you will have a mortgage then obviously that needs to be figured into what you'll need.

It is generally said that people can retire "reasonably" on about 70% of their pre-retirement income. This is a huge generalization and will vary a lot depending on whether you are/aren't doing lots of luxury spending now, and whether you will/won't be doing lots of luxury spending after retirement; but IMO it is a reasonable "vague ballpark" to use for planning purposes.

$250k sounds incredibly not-enough to me, even if you have no mortgage. I would guess that's probably about 5 to *maybe* 10 years' worth of living expenses, and that's IF nothing expensive goes wrong with the house or health. Unless one plans on dying young, it doesn't sound like a good idea.

Remind him that $250k doesn't go NEARLY as far as it used to And, look up some of the gazillion "retirement planning tool" webpages, or books, to get not just total numbers but *breakdowns* so that you can show him *why* it is likely to take a lot more than that to retire.

Good luck, have fun,

Pat, noticing that this is one case where it is kind of HANDY that my husband does not deign to involve himself in any practical details of life, because we've never had to have any sort of argument like that cuz I just say 'this is how much we have to save' and he says 'ok'