64 Replies Latest reply on Dec 4, 2014 1:38 PM by BoBraxton

    Retirement Balance at 50, 55, 60 ?

    cyber888
      Hello folks who are retired. I'm close to hitting 50.   Just wanted to know how much I am lagging behind in my retirement.   How much balance was in your 401 or 403K when you 50 yrs old,  55 yrs old and 60 yrs old.  Thanks.
        • Re: Retirement Balance at 50, 55, 60 ?
          JerryD
          A better question IMHO is to ask how much you realistically need to live on in retirement and then how much do you need to generate that. I highly recommend creating a current budget if you don't have one and then devising a budget from this that would cover a comfortable, but not excessive, retirement. Anything beyond that is gravy if you can accomplish it. Spreadsheets are great for this type of what-if planning and they can be modified when things change for the good or the bad.
           
          You have 10-15 years to create that amount. Assume a conservative rate of return that won't require high risks. Can you meet that goal? If not, can you find ways to add more to the pot in the years that you have left? Some people say they will work longer. Be careful. That is not always a decision that you have firm control of.
           
          One thing I personally recommend is to eliminate all, or at least the most expensive, debt before you get to retirement. To me debt is an unnecessary complication at a time when further complications will occur and when you need as much flexibility to address them as possible and few options to do so. 
           
           
          • Re: Retirement Balance at 50, 55, 60 ?
            cyber888
            Thanks Jerry. 
             
            Base on this years data, retirees on average spend about $31,000 per year  (married couple), which is about  $2,600/month.  Working couple spends about $39,000 per year (or $3,250/month).
             
            My wife and I live on about $2,100 per month (all utilities, realty taxes, home/life insurance, food, clothes) , excluding mortgage payments which I hope to eliminate 8-10 years before retirement.  So, this is about $25,200 per year.  This budget does not include travel, vacation and other unforeseen expenses. Including travel and vacation, I would say around $32,000 per year (add $6800).  If my wife and I pay for healthcare before being able to tap into medicare, then add another $8000 for year insurance.   So, if I were to retire in today's dollar without a mortgage, I would need around $40,000/year.   But $42,000/year (or  $3,500/month) would be more comfortable. 
             
            Anyway, just thought I'd like to know how people saved in their 50s and 60s for retirement. 
              • Re: Retirement Balance at 50, 55, 60 ?
                Albert_Dee
                Hi Cyber888
                 
                Good to see you have a plan. Your ahead of the game.  What I did so I could retire at 62 and wait till 65 to collect my SS was to save as much as possible the last 10 years.  I cut down on things and stuck to a strick budget.  If you fail to pay yourself while you can then you cannot go back and make it up.
                 
                Save now and let your money build.  It worked for me.  It is always easier to look back and say I wish I would have.  So do it.  Good Luck. 
                • Re: Retirement Balance at 50, 55, 60 ?
                  jkom51
                  First figure out if you're eligible for any pensions or annuities from current/previous employers. HR staff don't always tell you what you need to know. I was SHOCKED when I received two letters from previous employers, when I turned 55.
                  Both informed me because I had been fully vested, I was eligible for a monthly payment starting at age 65 of several hundred $$. I had absolutely no idea - I had taken my 401k money out of both and thought that was "all there was".
                   
                  Had those employers not been able to track me down - I'm sure there are many workers who move around a lot - that money would gone unclaimed and eventually reverted back to the employer! Luckily I've been living at the same address for 20 yrs, but where I live, that's actually unusual.
                   
                  As others have said, then the question becomes, what do you need to live on in retirement? What's inflation like in your area? How will you pay for big-ticket items? What if you become disabled, or need a period of convalescent care - do you know what that might cost in your locale?
                   
                  These days even the "4% rule" - e.g., taking only 4%/yr from your portfolio - is under debate. Many are lowering that to 3.5%, which is a BIG difference.
                   
                  Think of your expenses over the last two years. You've doubtless had emergencies and unanticipated costs crop up - how much did it cost you and how did you pay for it? Your options will be more limited in retirement, but you will still have that same general pattern. Your fixed income budget must have some flexibility built in to allow for this. Even if you try to reduce overhead expenses, there'll be a limit to how much you want to cut.
                   
                  We live in a high-cost area. To retire comfortably here takes a high five-figure income; a low six-figure is better. The first time I got my house painted I almost fainted at the bids! And that was ten years ago, LOL, so it's a whole lot more nowadays.
                  • Re: Retirement Balance at 50, 55, 60 ?
                    TroutBum
                    I agree there are things more important than the bottom line of your retirement savings. In my opinion, developing and following a well thought out plan is what's most critical.
                     
                    I've been with the same employer for most of my working life. During that time I accumulated very little retirement savings, except for the company's standard 10% contribution, by the age of fifty. Frankly, that isn't enough, but I didn't just throw away the money that wasn't going into the fund. My first goal was to eliminate a mortgage and I achieved that at fifty. With no mortgage I had money to invest heavily into retirement so I maxed my SRAs, bought Roths and pretty much put money anyplace where I thought I could get a decent return.
                     
                    My initial plan was to retire at sixty but, after the years of bad economy, I decided to rethink that. Although the retirement planners say I'm OK to retire now, it doesn't include a lot of padding. I chose to work a couple more years in order to enjoy a comfortable retirement, rather than go now and risk having give up some of the things I want to do. Fortunately, I like my job and coworkers so working a few extra years isn't a like a prison sentence. I'll be 61 soon and plan to wait until I'm 63, maybe even 64 before I retire. Now that I see the light at the end of the tunnel, that time is passing quickly!
                     
                    • Re: Retirement Balance at 50, 55, 60 ?
                      jocee
                      At 50 we had very little saved for retirement because of frequent job changes and moves.  My husband had never vested in a retirement plan and  our only money was an account at TIAA-CREF his previous employer had funded and 2 small IRAs. 
                       
                      We were lucky that I was able to find employment and my husband finally vested in a plan.  We took advantage of the "catch up" rule and socked away as much money as possible and could retire at 63. 
                       
                      Notice I said "lucky" because although we had a plan that I would work so we could save extra money, things could have also not worked out for us.  I now think about if we were 50 in 2007 instead of 1995, I probably would have not found a job and it would have been a struggle to save money.  It could have turned out so differently.  So my point is to save as much as you can because you may not be "lucky". 
                       
                      So much depends on how you want to live in retirement and your health.  So while you save your money, also take care of your health.
                       
                        • Re: Retirement Balance at 50, 55, 60 ?
                          cyber888
                          That's really great !    Care to share how much you had a 50 and at 63 ?  If not, its fine.
                           
                          jocee said...
                          At 50 we had very little saved for retirement because of frequent job changes and moves.  My husband had never vested in a retirement plan and  our only money was an account at TIAA-CREF his previous employer had funded and 2 small IRAs. 
                           
                          We were lucky that I was able to find employment and my husband finally vested in a plan.  We took advantage of the \"catch up\" rule and socked away as much money as possible and could retire at 63. 
                           
                          Notice I said \"lucky\" because although we had a plan that I would work so we could save extra money, things could have also not worked out for us.  I now think about if we were 50 in 2007 instead of 1995, I probably would have not found a job and it would have been a struggle to save money.  It could have turned out so differently.  So my point is to save as much as you can because you may not be \"lucky\". 
                           
                          So much depends on how you want to live in retirement and your health.  So while you save your money, also take care of your health.
                           
                            • Re: Retirement Balance at 50, 55, 60 ?
                              cbslc
                              To me there is no set, needed threshold. I think this depends on when you want to retire, and your lifestyle needs. I'm 40, wife is 42. We live extremely frugally. Averaging 14k/yr in living expenses (+taxes). We're both employed and have insurance through our employer. We own our house, don't have cable, don't have expensive cell phones or extremely fast internet and we bike almost everywhere. Our 2003 car has 50K miles on it. And we're very happy this way. Our plan is to retire when we hit $2 mill in qualified and non-qualified funds. This should be in the next 2- years. I don't know of anyone else that can live our lifestyle and thus our goal is very different than most. So the balance you have or should have at 50, 55, 60 is dependent on your goals. But plain and simple, the younger you start saving, the less you will need to save. Save hard early, get used to living below your means. Spoil yourself less often (so it actually feels like being pampered, instead of a necessity) and you will get where you need.
                                • Re: Retirement Balance at 50, 55, 60 ?
                                  JerryD
                                  Your goal sounds wonderful and I admire your discipline. From my days where I was "on my own" with no income other than what I had, I do suggest that you look very carefully at the cost of health care before you jump. Without it, you could be cleaned out pretty quick with a small number of health issues and paying top rates (see the 3/4/2013 Time Magazine on the extreme cost of health care).
                                   
                                  We had a good Blue Cross private policy with a $2,500 deductible but it was not cheap. I have no idea what Obamacare will do to this scenario so look close at it too.
                                   
                                  Also, don't forget to enjoy life. Frugality shouldn't jeopardize that. 
                                    • Re: Retirement Balance at 50, 55, 60 ?
                                      smaneck
                                      JerryD said...
                                      We had a good Blue Cross private policy with a $2,500 deductible but it was not cheap. I have no idea what Obamacare will do to this scenario so look close at it too.
                                         
                                      ObamaCare will do a *lot* to help those who retire early. If you keep your income below 400% of the poverty rate which is about 44K you only have to pay around 9.5% of your income for health insurance. That includes two free check-ups a year. 
                                      Pretty sweet.  
                                      • Re: Retirement Balance at 50, 55, 60 ?
                                        WayneP
                                        JerryD said...
                                        Your goal sounds wonderful and I admire your discipline. From my days where I was \"on my own\" with no income other than what I had, I do suggest that you look very carefully at the cost of health care before you jump. Without it, you could be cleaned out pretty quick with a small number of health issues and paying top rates (see the 3/4/2013 Time Magazine on the extreme cost of health care).
                                         
                                        We had a good Blue Cross private policy with a $2,500 deductible but it was not cheap. I have no idea what Obamacare will do to this scenario so look close at it too.
                                         
                                        Also, don\'t forget to enjoy life. Frugality shouldn\'t jeopardize that. 
                                        "Obamacare" limits the difference in premium rates between young and old beneficiaries to no more than 5x.  Actuaries say the real cost difference is much higher.  This is of course good for us older folks and bad for our kids.  Now if the law had actually done things to make healthcare more efficient....like malpractice reform........but that is a topic for another forum....
                                         
                                         
                                         
                                         
                                      • Re: Retirement Balance at 50, 55, 60 ?
                                        jkom51
                                        Jerry is correct, as always. Not only should you take a close look at healthcare premiums, which have been increasing far faster than the rate of inflation for the last 20 years, but you need to investigate a way to handle long-term care costs. $2M may sound wonderful but that's only $1M apiece. A catastrophic illness and convalescent nursing can wipe that out pretty quick.
                                         
                                        Proper financial planning is more than budgeting and saving. It's asking the really hard questions of what your projected morbidity/mortality risks are, and how to pay when things are going wrong, not right.
                                        • Re: Retirement Balance at 50, 55, 60 ?
                                          Mitski
                                          If you live so frugally, why do you need to save 2 million?
                                            • Re: Retirement Balance at 50, 55, 60 ?
                                              cbslc
                                              That is an excellent question! Mainly because I cannot tell how much we will need. If interest rates ever rise and we could rely on getting 5-6% annual returns, then certainly we would need less. Things like healthcare costs rising well past inflation rates and the ups and downs of the market scare me. Could we survive on less, probably. But I'd rather not have a heart attack caused by my constant worry.
                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                  BoBraxton

                                                  I can understand aiming for two. That is certainly more than we had in 2009 when I was encouraged to retire (due to economic downturn) or in 2011 when my spouse also retired and we began Medicare and Social Security (both age 67). It is even more than what we have now - early into our fourth year of retiring. As far as behaviors, we always bought maximum value each year Roth IRA, put in maximum into each person's 403(b), did the over 50 Catch-Up and in addition for five years paid another catch-up because my spouse was at least 15 years in the same job and location (eventually 27 years - senior Pastor). I also had all federal income taxes taken out of my pay, so the amount of my monthly direct deposit was almost negligible - for many years. One sweet side effect of such is that once we retired, we had more money just because we were accustomed to living on a lot less while working. By the way, we also tithed to the church all those years.

                                            • Re: Retirement Balance at 50, 55, 60 ?
                                              BATC
                                              you can never have too much.   The rule of thumb is to have 80% of your present salary at the time of retirement to live on.   Even thouigh you may not be traveling back and forward to work and need work clothes, you will still be living the same live you live outside of work and will need even more for the leisure things that you do.   Good Luck.   Remember you never have enough.
                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                  BoBraxton

                                                  The amount invested depends also upon expectations of rate of return. With most of ours in Equities (Mutual Fund, low or no Load), I was not expecting even as much as 2% annual return (based on recent history). Any return above that rate I consider as re-investment. Even though we are not allowed to contribute new money into retirement savings once retired, we are certainly allowed to re-invest what we do not take in the current year. For this and the previous years this has been quite substantial (in our case).

                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                  gchaas
                                                  The old 3/4 or 80% of current income isn't such a hard and fast rule anymore either. One issue is the healthcare costs mentioned by Jerry. Another is the changing face of our retirement lifestyle.
                                                   
                                                  Many oft say, " I don't have my $1,000,000 nest egg yet."  Again, one size NEVER fits all here.
                                                   
                                                  Warrern Buffet's first decision rule was to never compare resutls or ask opinion of his investments. I do beleive the same applies here, my balances, other's balances, have no relevance to your situation.
                                                   
                                                  I recommend you avail yourself of one of the many financial planning aids available to us as investors, i.e., do a formal retirement cash flow projection. Alternatively ask a planner for hire to work it through with you. Your TIAA-Cref advisors can help with this.
                                                   
                                                  Either way, you'll soon see that comparing balances with others is counter-indicated. You'll find that the plan will give you the right perscription to maximize your chances of success.
                                                   
                                                  • Re: Retirement Balance at 50, 55, 60 ?
                                                    smaneck
                                                    cyber888 said...
                                                      If my wife and I pay for healthcare before being able to tap into medicare, then add another $8000 for year insurance.   So, if I were to retire in today\'s dollar without a mortgage, I would need around $40,000/year.   But $42,000/year (or  $3,500/month) would be more comfortable. 
                                                     
                                                    Hi Cyber, 
                                                     
                                                    I note that your calculations don't seem to take ObamaCare into consideration.  If your income is only about 42K a year your health insurance will only be about $400 a month, not $800. It certainly makes early retirement more feasible. 
                                                      
                                                    • Re: Retirement Balance at 50, 55, 60 ?
                                                      smaneck
                                                      cyber888 said...
                                                      Hello folks who are retired. I\'m close to hitting 50.   Just wanted to know how much I am lagging behind in my retirement.   How much balance was in your 401 or 403K when you 50 yrs old,  55 yrs old and 60 yrs old.  Thanks.
                                                      When I was fifty I had nearly 200K in retirement but then the recession hit and to my horror it dipped down to less than a 100K the following year. Fortunately, I didn't panic and take my money out but by the time I was 55 I had not reached my previous level. Now at 57 I have around 300K and I am seriously re-balancing my portfolio to more conservative funds because at my age I can't afford to take another hit like the last one. 
                                                      • Re: Retirement Balance at 50, 55, 60 ?
                                                        Cr8tn
                                                        One's best laid plans sometimes go haywire!
                                                        Divorced at 48 after a 28 year marriage ... I worked p/t jobs or in full time jobs with no real 'benefits' as I was the 'mom' for 4 children; so there goes 'our' retirement;
                                                        Luckily I landed a full-time position with great healthcare benefits and an employer who matches at 6% if I put in 6%. But I will never come close to saving what I will need in retirement. I just hope and pray Social Security will still be there at 67 plus 5 months!
                                                         
                                                        Breast cancer a few years ago has created a new set of worries. I'm putting almost as much into a Health Savings account as my 403b in the hopes it will help with medical costs after age 62. But can anyone tell me 'definitively' if HSA's can be used to pay Medicare and supplemental premiums?
                                                         
                                                        I will still have a mortgage for about 6 years but it's not much more than rent; I know I can always cash out and use the equity for living but that nest egg is all I will have for an estate for my kids.
                                                         
                                                        My 58th b'day is approaching and I feel blessed to have a job with all of the reorganization happening. But when doing retirement planning, I sure wish I would've had a crystal ball! In talking to other women who share similar stories, I feel even more blessed having my four greatest assets doing well themselves.
                                                         
                                                        Thanks for listening and if anyone can answer my question about HSA/Medicare premiums I would appreciate it. The IRS bulletins aren't very helpful .
                                                         
                                                         
                                                          • Re: Retirement Balance at 50, 55, 60 ?
                                                            D1953
                                                            I'm not sure about the question on HSA and health premium payments, but I do have one other piece of advice. Do NOT put your own health or retirement in an uncomfortable position by being concerned about leaving and "Estate" for your children.  You indicated that you've been the mom to four, experienced breast cancer, and have maximized your employer's match. Use your assets to enjoy your retirement years as much as you can.  I am sure if you asked your children, they would agree.  They've been fortunate to have such a good parent!
                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                              BoBraxton

                                                              My own gender and marital status are at variance. In 1975 when I first became eligible in the employer's 401(k) the match was 3% so I put in that 3% plus another 10% of pay / salary over the next decade until I went to another organization. My spouse has "always" worked and so we have had two paychecks until 2011 retirement(s).

                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                              A0110915
                                                              I'll answer your original question. I've kept track since I was 36.
                                                              Totals exclude value of my pension.

                                                              Age    Retirement Account Balance (*)

                                                              40      $24,000

                                                              45      $65,000

                                                              50    $158,000
                                                               
                                                              55    $698,352 (very good period for stock market)
                                                               
                                                              60    $459,000 (lost a lot due to a divorce settlement)
                                                               
                                                              65    $692,000
                                                               
                                                              (*) These are all in IRAs, 403Bs or other deferred tax accounts, so the true value after tax is about 25% less, assuming
                                                              regular withdrawals.
                                                              • Re: Retirement Balance at 50, 55, 60 ?
                                                                A0110915
                                                                The smartest thing I ever did was to "pay myself first". I would put 15% of my pay into retirement accounts and pretend I never had the money.  I never borrowed from it or took it out until retirement, despite several times when I was sorely tempted to do so.
                                                                 
                                                                Had I been smarter, I would have invested 100 percent in stocks and gradually rebalanced every 5 years or so down to perhaps 60% stocks by retirement age. Instead, I invested 50% in stocks and 50% in stable value funds. By the time I retired, the stocks were worth more than the stable value funds even though this was in 2010, shortly after the 2008 stock market debacle, when stocks had lost nearly 50% of their value. I left the money in the stock market and now in 2013 it has recovered and is back to more than what it was prior to the 2008 crash.
                                                                  • Re: Retirement Balance at 50, 55, 60 ?
                                                                    cyber888
                                                                    Thanks for the answers folks.  Wow A011915! That's a big jump from $158K to $698K.    
                                                                     
                                                                    Right now, at 49 yrs old, I have $222,000 in my retirement and around $74,000 cash.  Only debt is mortgage which I plan to pay in 3 years.  My 2 cars are fully paid and will last 10 years. 
                                                                     
                                                                    At 55, my target is to have around $500,000 in my retirement account +  $180,000 in cash.   Why the big cash ... read on ... 
                                                                     
                                                                    If I hit $750K-$800K (cash + 403K), I plan to retire at around 56.5 or 57.  I will need $200K in cash savings to tide me up to 59.5 - 60 years old, so I can withdraw from my 403K without the 10% penalty.    
                                                                     
                                                                    I won't be paying income tax if I live on my cash savings from age 56.5 to 60.  I think interest rates would be less than 9,000/yr.   If I can stretch my cash to 62 yrs old I would.  Then, I'd start drawing my SS benefits, which will be around $2,400/mo (future dollars) according to the SSA calculator.  
                                                                     
                                                                    A0110915 said...
                                                                    I\'ll answer your original question. I\'ve kept track since I was 36.
                                                                    Totals exclude value of my pension.

                                                                    Age    Retirement Account Balance (*)

                                                                    40      $24,000

                                                                    45      $65,000

                                                                    50    $158,000
                                                                     
                                                                    55    $698,352 (very good period for stock market)
                                                                     
                                                                    60    $459,000 (lost a lot due to a divorce settlement)
                                                                     
                                                                    65    $692,000
                                                                     
                                                                    (*) These are all in IRAs, 403Bs or other deferred tax accounts, so the true value after tax is about 25% less, assuming
                                                                    regular withdrawals.
                                                                    • Re: Retirement Balance at 50, 55, 60 ?
                                                                      jocee
                                                                      You say "if you had been smarter, you would have been 100% in stocks".  However, we know people who were 100% during the tech bubble or before the Recession who lost everything they had in retirement.  While the 50/50 split may not be splashy (this was what TIAA used to recommend in the old days), our portfolio recovered and grew after the Recession while many others were/are still not back to the pre-2008 amounts. 
                                                                       
                                                                      I think the volatility of the markets the last 15 years have redefined "smarter investing".  We have done steady saving combined with realistic spending and enjoy a good retirement on 45% of our final incomes.  Don't forget, if you are maxing out into retirement vehicles, as we were doing, you are not living on your full annual income while working.  Everyone is different and has different circumstances.  Save and stay healthy are your best ways to enjoy retirement. 
                                                                       
                                                                        • Re: Retirement Balance at 50, 55, 60 ?
                                                                          smaneck
                                                                          After the market crashed I moved nearly 100% into equities. But when the DOW went over 14K I got nervous because bad things have happened the last two times it got that high. So now only about 50% is in equities and the rest in the Real Estate Fund or in High Yield Bonds. Not very conservative, I realize by most people's standards. 
                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                              cyber888
                                                                              Smaneck, you mean $400 for both my wife and myself ?  $200/each ?  Where do you get that info ?  Thanks.
                                                                               
                                                                              smaneck said...
                                                                              cyber888 said...
                                                                                If my wife and I pay for healthcare before being able to tap into medicare, then add another $8000 for year insurance.   So, if I were to retire in today\\'s dollar without a mortgage, I would need around $40,000/year.   But $42,000/year (or  $3,500/month) would be more comfortable. 
                                                                               
                                                                              Hi Cyber, 
                                                                               
                                                                              I note that your calculations don\'t seem to take ObamaCare into consideration.  If your income is only about 42K a year your health insurance will only be about $400 a month, not $800. It certainly makes early retirement more feasible. 
                                                                                
                                                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                                                  PatriotGunny
                                                                                  Well, I'm not sure I'm buying into the $400 a month calculation...
                                                                                  Specific provisions of Obamacare that will hurt seniors:
                                                                                  1) Less Choice. Obamacare will reduce payments to Medicare Advantage, likely decreasing benefits and causing approximately half of current participants to drop out. These seniors will have little choice but to go back to traditional Medicare, and buy a supplemental policy to cover Medicare’s big gaps in coverage.
                                                                                  2) Reduced Access to Care. Robert Moffit, PhD says  “With the retirement of 77 million baby boomers beginning in 2011, the Medicare program will have to absorb an unprecedented demand for medical services. For the next generation of senior citizens, finding a doctor will be more difficult and waiting times for doctor
                                                                                  appointments are likely to be longer. The American Association of Medical Colleges projects a shortage of 124,000 doctors by 2025.” Obamacare does nothing to reverse this worrisome trend, instead making it worse.
                                                                                  3) Medicare Payment Cuts. Moffit explains that “creating a real problem for seniors, the CMS Actuary estimates that roughly 15 percent of Medicare Part A providers—the part of the Medicare program that pays hospital costs—would become unprofitable within 10 years” due to reductions in hospital payment updates under the new law.
                                                                                  4) Higher Taxes. “The higher taxes on drugs (effective in 2011)
                                                                                  and medical devices (effective in 2013) will affect seniors especially, as they are more heavily dependent on those very products.” Moreover, federal premium taxes will apply to Medicare Advantage, as well as federal retirees’ health plans.
                                                                                    • Re: Retirement Balance at 50, 55, 60 ?
                                                                                      MeemosGirl

                                                                                      Medicare Advantage plans were not cost effective.  The govt subsidized the insurance companies to offer them, making Medicare cost even higher.  It was created as a "first step" toward privatization.

                                                                                      All the boomers would need physicians with or without Obamacare, which also includes funding education for Nurse Practitioners, who are excellent primary care providers, as they are nurses first, so spend more effort on holistic health and patient teaching.

                                                                                        • Re: Retirement Balance at 50, 55, 60 ?
                                                                                          cyber888
                                                                                          Thanks.

                                                                                          Let's get back to the topic - on what's your retirement savings or target for age 50, 55, and 60.  Thanks.
                                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                                              jkom51
                                                                                              For us, we didn't set checkpoints at specific ages. I don't see how one could do that, actually.
                                                                                               
                                                                                              What we did was figure we needed at least 90-100% of current income for retirement. We live in a high labor costs area; RE is expensive so whether you own or rent, you have to figure you will pay close to market even if your home is paid off.
                                                                                               
                                                                                              For example, our home IS paid off. But property taxes, utilities, homeowners and earthquake insurance, total close to $900/mo. Now, that's only half what it would cost to rent a place, but maintenance isn't cheap either: we need a new furnace and WH in the next 5 yrs (sooner if we're not lucky). I won't paint the house or replace the stove until we're ready to sell; the painting inside and out will probably hit the $18K mark.
                                                                                               
                                                                                              We did a budget with guesstimates about 8 yrs before retirement. Then we did another, about 3 yrs before retirement. The year before retiring, we did two of them! We used figures on the high end, because we knew we needed 'wiggle room'.
                                                                                               
                                                                                              On the 3 yr prior and Year prior budgets, we were able to make better guesses on how much income we would have coming in, so we could analyze the "what if" scenarios better. There are never any guarantees, but we really worked at brainstorming to identify all the negative scenarios possible.
                                                                                               
                                                                                              We lessened risk wherever it was cost effective, and were at peace with living with the rest (of the risk).
                                                                                               
                                                                                              Our planning has worked even better than we hoped. We aren't wealthy, but we live well and enjoy ourselves without having to count every penny. We can afford our hobbies and have sufficient resources against potential ill-health and/or disability - two things that too many people forget when they are doing their own financial planning without help.
                                                                                              • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                TerrB
                                                                                                I'm about 8 years from retirement and still about 70% in stocks. I do not have as much saved for retirement as I would like and am trying to decide if I should stay this heavy in stocks or start moving to a more conservative portfolio, and if so what?
                                                                                                  • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                    wcaretired
                                                                                                    Consider using some of the calculators at reputable fund companies (I named Van. & TRowe but was not allowed to submit my comments.  They are "forbidden") or TIAA to see what losses have occurred historically with various percentages in diversified stocks and bonds (and how long it took to recover the losses).  Decide on the largest loss you could accept and set your ratios.  You may be more comfortable with a 60/40 or a 50/50 split.  
                                                                                                      • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                        JerryD
                                                                                                        TerrB, in my opinion, it is no time to be in risky stuff this close to retirement. The stock market is getting long in its current run so I would be getting nervous over it and watching it closely.
                                                                                                         
                                                                                                        The surest actions this close to retirement are to conserve principal and increase savings as much as you can.  If you are eligible salary-wise and maxed out on employer matching think seriously about putting some into a Roth which will not be taxed on withdrawal and can be allowed to stay invested as a safety net without required mandatory distributions for later years if needed.
                                                                                                        • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                          Man_on_the_stree
                                                                                                          I am 2-3 years from retirement and until last year was 80% stocks.  I have started going conservative by moving some funds to bonds and some to balanced funds.  At present, I am 70% equities and will be moving to 60/40 next year and 50/50 the following year. I have used portfolio analyzers to assess my risk tolerance and also what they recommend.  Some of them recommend very complex portfolios with 20 or more products - I do not like that.  I think 5-7 different products (e.g., large caps, global equities, real estate, etc.) is all I can handle.   
                                                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                              JerryD
                                                                                                              With 2-3 years before retirement, the stock market going on 5 year climb and still 70% in equities, I would be very nervous about a very significant loss going into retirement with no earned income to mitigate it. I presume that you understand that just to get back to even recovering from a 33% loss requires an over 50% gain, a 40% loss requires a 2/3 gain, a 50% loss requires a 100% gain, etc. You get the idea.
                                                                                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                  Man_on_the_stree
                                                                                                                  I appreciate the advice.  I am nervous about a correction which I believe will happen sooner or later.  My optimism though makes me believe it wont be more than 10%.  Also, we have other sources which enable us to weather out a correction.  Nonetheless, I will be moving to a 65/35 or 60/40 over the next 12 months.
                                                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                              smaneck
                                                                                                              What I do is invest aggressively when the market goes down in the summer and much more conservatively in the winter and spring. 
                                                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                              Serge
                                                                                                              cyber888 said...
                                                                                                              Thanks Jerry. 
                                                                                                               
                                                                                                              Base on this years data, retirees on average spend about $31,000 per year  (married couple), which is about  $2,600/month.  Working couple spends about $39,000 per year (or $3,250/month).
                                                                                                               
                                                                                                              My wife and I live on about $2,100 per month (all utilities, realty taxes, home/life insurance, food, clothes) , excluding mortgage payments which I hope to eliminate 8-10 years before retirement.  So, this is about $25,200 per year.  This budget does not include travel, vacation and other unforeseen expenses. Including travel and vacation, I would say around $32,000 per year (add $6800).  If my wife and I pay for healthcare before being able to tap into medicare, then add another $8000 for year insurance.   So, if I were to retire in today\'s dollar without a mortgage, I would need around $40,000/year.   But $42,000/year (or  $3,500/month) would be more comfortable. 
                                                                                                               
                                                                                                              Anyway, just thought I\'d like to know how people saved in their 50s and 60s for retirement. 
                                                                                                              Hi Cyber888
                                                                                                              One note. $42K/year is after tax $. Add 12-15% tax depending on your state.
                                                                                                              • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                Art99
                                                                                                                Thanks for the perspective. I'm in a similar situation and was 100% stocks until mid-2012. I'm now, as of last Friday, at 71% stocks. That's been a tough move considering the euphoria for endless rising markets (aka 2013 run), but, you just never know. I've left some money on the table, but then again, maybe not, in the log run. Time will tell.
                                                                                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                  Glicker
                                                                                                                  I was getting concerned. Our IRA portfolio is well diversified and conservative at 50:50, but the current political climate and my being 2 years from retiring made me toss and turn. I talked with my advisor and have now moved to 40:60 equities:fixed. I read conflicting articles about bonds, but the bond funds are short term, high quality. We've done OK and I don't want to start out with a big loss. If there's a continued run, I'll still get some of it. Happily, we each have a small pension and with SS should cover enough of expenses to be able to tap only about 2% of IRA. I feel confident, but I am appalled at all the things I read about Boomers not having anything saved. What were they thinking? We lived within our means, but well. Both worked - still do - and now are hoping to enjoy the next chapter. I cannot imagine what some of my cohort will do...
                                                                                                                    • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                      cyber888
                                                                                                                      So Glicker, how much did you save at 50, 55, 60 ?
                                                                                                                        • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                          Glicker
                                                                                                                          portfolio value was about 700k, 950k, 1100k at those ages.
                                                                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                              cyber888
                                                                                                                              Wow! Those are excellent numbers Glicker.  I'm projected to only have about 50% of what you have at 50-51, and hopefully get to $600K-$650K at 55.   
                                                                                                                               
                                                                                                                              I dont think you should worry - you have enough. 
                                                                                                                               
                                                                                                                               
                                                                                                                                • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                                  Glicker
                                                                                                                                  We always worry. But that's what causes us to prepare. We do not have long-term care insurance. That is my biggest worry now. So far, our health is fine, and we take pretty good care of ourselves.
                                                                                                                                    • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                                      jkom51
                                                                                                                                      You're right to remain concerned. If that portfolio is for two people, then each one actually only has half of it.
                                                                                                                                       
                                                                                                                                      Sometimes we (being all of us) forget that. One reason we bought LTCi was that we realized a long-term disability of one of us would bankrupt the other spouse.
                                                                                                                                        • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                                          Glicker
                                                                                                                                          I'm a bit of a neophyte about LTC details, though have read the State plan option for our state, but are you saying that only the spouse's half of the total assets is vulnerable and the well spouse's assets remain protected? Do you have expertise in this area? I've talked briefly with an attorney and she said she doesn't work on any sorts of trusts regarding protecting assets for Medicaid-like issues because it's an unclear area of the law and Congress can easily modify it. She thinks the attorneys that offer lunch and a pitch are on the edge of unethical (my words, not hers). That leaves two options: (a) purchase LTC insurance, or (b) gamble that you can self pay without breaking your asset bank. So we're on plan b for the time being, and as we get older (now early 60s) LTC gets really expensive. Thoughts?
                                                                                                                                            • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                                              jkom51
                                                                                                                                              Glicker said...
                                                                                                                                              I\'m a bit of a neophyte about LTC details, though have read the State plan option for our state, but are you saying that only the spouse\'s half of the total assets is vulnerable and the well spouse\'s assets remain protected? Do you have expertise in this area? I\'ve talked briefly with an attorney and she said she doesn\'t work on any sorts of trusts regarding protecting assets for Medicaid-like issues because it\'s an unclear area of the law and Congress can easily modify it. She thinks the attorneys that offer lunch and a pitch are on the edge of unethical (my words, not hers). That leaves two options: (a) purchase LTC insurance, or (b) gamble that you can self pay without breaking your asset bank. So we\'re on plan b for the time being, and as we get older (now early 60s) LTC gets really expensive. Thoughts?
                                                                                                                                              Yours is a very good question - however, it is way OT for this discussion thread. Would you be so good as to copy and post your question in a separate thread? Maybe title it "LTC questions" or something similar.
                                                                                                                                               
                                                                                                                                              I believe this (asset division) may have been discussed previously, but it has been a while so a new thread may be helpful to both you and others.
                                                                                                                    • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                      BoBraxton

                                                                                                                      Similar experience here.

                                                                                                              • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                wvbonnie
                                                                                                                One thing I found out recently that is pretty important to note: contributions from a 403B supplemental plan can be withdrawn starting at age 55 with no penalty.  I don't know all the details, so you should defintely check on that with your financial advisor, but that was quite an eye opener for us! Our TIAA/CREF advisor told us that when we did a retirement review last year.  So if you want to retire before 59.5 and have enough in your SRA to live off of until you hit that age you have no worries about needing extra cash.
                                                                                                                 
                                                                                                                Assuming you are a TIAA/CREF participant, I strongly recommend you enlist the help of TIAA/CREF in reviewing where you are and where you need to be. They can take your estimates of how much income you need, your current financial picture, and when you want to retire and run it through a ton of scenarios to come up with a probability to achieve your goals, along with recommendations on how to rebalance your accounts.  This is far more than you can do with the online tools.  We found out we could retire much earlier than we thought and still outlive our savings. 
                                                                                                                  • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                    wvbonnie said...
                                                                                                                    One thing I found out recently that is pretty important to note: contributions from a 403B supplemental plan can be withdrawn starting at age 55 with no penalty.  I don\'t know all the details, so you should defintely check on that with your financial advisor, but that was quite an eye opener for us! Our TIAA/CREF advisor told us that when we did a retirement review last year.  So if you want to retire before 59.5 and have enough in your SRA to live off of until you hit that age you have no worries about needing extra cash.
                                                                                                                     
                                                                                                                    this is true for 403b's, 401k's and tsp's as long as you are no longer employed.  It is a strong reason for not transferring retirement balances to a IRA until after you are 59.5 even if that is your final plan.
                                                                                                                  • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                    Man_on_the_stree
                                                                                                                    For those of us who have to balance their portfolios and move equities to fixed income options such as bonds because we are nearing retirement, my worry is if I buy bonds now, the price will drop when the economy turns in the next couple of years and interest rates increase.  So, say you wise people?
                                                                                                                      • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                        BoBraxton

                                                                                                                        I never purchased actual bonds but earlier in life did participate in some Mutual Funds that were bonds, including GNMA. Fortunately I got out well in advance of housing market (and mortgages) collapse. When I look at the pie chart of "recommended" allocation and my (and her) actual allocations, I smile. What we have is almost all equities - and we are age 70 and three years into retirement. From my perspective, investing (and giving) does not end when one retires, at least not for us. Further, we are tending to spend a lot more on things (including capital projects) that we ever allowed ourselves while drawing our salaries.

                                                                                                                      • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                        orodman

                                                                                                                        I have been tracking our portfolio for the last ten years. Although we are only 53 and DW 52 the funds are growing fast.

                                                                                                                        Age 43  $188,00  1994

                                                                                                                        Age 45  $282,00  1996
                                                                                                                        Age 50  $498,00  2011

                                                                                                                        Age 53  $773,00  2014

                                                                                                                         

                                                                                                                        the last few years we are putting in the maximum of 23,000 each. We hope to retire at age 55.

                                                                                                                          • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                            JerryD

                                                                                                                            Please don't forget the cost of funding your own health care. Retiring at 55 and you are looking at 10+ years of individual coverage until Medicare.

                                                                                                                             

                                                                                                                            We paid some big out-of-pocket costs during periods of unemployment and avoided some expensive episodes by the skin of our teeth by biting the bullet and paying for a "real" policy instead of one of those short-term things.

                                                                                                                              • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                                orodman

                                                                                                                                Yes, that is our biggest concern.

                                                                                                                                The plan reads -You are eligible to enroll in the same health insurance plans that you were eligible for as an active employee .Your eligible dependents may also participate.

                                                                                                                                I meet all requirements at 55 with age and years of service.

                                                                                                                                Costs this year are $ 170.00 per month for two people.

                                                                                                                                Of course rates can rise every year.

                                                                                                                                This insurance is a premium Aetna plan.

                                                                                                                                I am worried that my employer could take this away. But

                                                                                                                                we have a reasonably strong union on our side.

                                                                                                                              • Re: Retirement Balance at 50, 55, 60 ?
                                                                                                                                BoBraxton

                                                                                                                                like you all, "we" always added the annual maximum (every kind)