Re: Am I missing something here about planning for retirement???

Viking wrote:
> Say you decide you'll need $1,000,000 in today's dollars to retire.
> Am I missing something? How are people going to be able to retire?

Well, where did you come up with the assumption of $1M needed to
retire?

The amount needed to retire varies immensely with the assumptions of
withdrawal rate and life expectancy. If you saved $465K by the time you
were 65, then you can withdraw $30K per year until you were 85
(assuming 3% real return). That seems livable to me. And that's before
social security. If you were retiring while social security is still
alive, you would probably get at least an extra $10K per year.

Re: Am I missing something here about planning for retirement???

Bucky wrote:

> Viking wrote:
>
>>Say you decide you'll need $1,000,000 in today's dollars to retire.
>>Am I missing something? How are people going to be able to retire?
>
>
> Well, where did you come up with the assumption of $1M needed to
> retire?
>
> The amount needed to retire varies immensely with the assumptions of
> withdrawal rate and life expectancy. If you saved $465K by the time you
> were 65, then you can withdraw $30K per year until you were 85
> (assuming 3% real return). That seems livable to me.


In real inflation-adjusted terms, even assuming only a few percent
inflation, $30,000 per year in 30 years will have the buying power of
$12,000 per year now. That's poverty.

I remember that back in the 1960's, a nice three-bedroom home cost
around $30,000.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Am I missing something here about planning for retirement???

Steven L. wrote:
> In real inflation-adjusted terms, even assuming only a few percent
> inflation, $30,000 per year in 30 years will have the buying power of
> $12,000 per year now. That's poverty.

Yes, I understand the concept of inflation. But this entire thread has
been using numbers in today's (2005) dollars. Since we're already using
an inflation-adjusted return of 3% (instead of 7%), you don't need to
adjust for inflation again. Everything is in today's dollars.