did anyone (else) retire with less than 1MM

[hurricanegirl]

and if so would you care to share your experiences so far and your expectations/fears, etc?

I was forced  into retirement at age 58, when the company I had worked with for 20 years closed and I was unable to find suitable employment

I was lucky as this was the height of the recession (?) and I became a 99'er with unemployment, collecting the maximum amount for almost 2 years

The HCTC (health care tax credit) program was also put into effect, so again for 2 years, my health insurance premiums OOP were quite reasonable

I managed to pay off my mortgage and pretty much just hung on for the ride until I signed up for my SS benefits at age 62

I recently became medicare eligible so my health insurance costs are a fraction of what I paid for private coverage after HCTC expired

fast forward to my retirement so far

I had/have only 60% of that magic million amount in retirement accounts and taxable accounts

NW is very close to the 1MM figure, but not quite there

I have -0- debt

I have tweaked my lifestyle only slightly to live on a (fairly) generous budget which is inflation adjusted

and yes I will be deadbroke in 22 years (age 87) unless my spending slows down as I get (much) older, and I expect it will

I currently go to "Happy hour" for cocktails and socialization daily and eat out at least twice weekly - DH and I are "foodies"

I have no children or (living) siblings and DH is 10 years older than I,  so I sort of want to die broke

going forward (if I live past age 87) I can always sell or RM the primary residence, and I can sell (or rent) the vacation house

As a result I am only slightly concerned about my financial future and I really don't believe that 1MM is needed - I believe I am so far living proof that you can live fairly generously if you stay sensible and responsible, with much less than that if you enter retirement debt free

My biggest worry is "who will claim my body" once I go, and I hope I have some time to figure that one out

My second biggest worry is my and DH's health going forward, although we do presently enter the Prescription donuthole somewhere in April, so Our prescription costs cant get much worse than they presently are.  and yes Catastrophic illness is something we all fear, or we should

I am very interested  in any other retirees comments/concerns as well as those nearing or planning for retirement

if retired -  how are you doing?  what are your concerns?

if retired or not - do you believe 1MM is  needed?  and are you there?  or will you get there?  is the 1MM net worth or cash?  do you plan for catastrophic illness which may not happen?  and anything else

[moon/Laura]

Wait. Are you serious? Is the retirement expectation $1M? Why? I'm so not a YMer and figure I will have to work until I die, but I just really didn't realize that you somehow had to have a million saved. So to me, I'd figure *many* people retired with less than that.

[txbo]

How is your money invested? If in CD's you are not even keeping up with inflation. I'm in the market with a self directed IRA and Roth IRA. I fall into the RMD guidelines and must take a distribution of about 4% annually. My account is growing and I have never had to sell a stock, just use the dividends.

People find a way to live on what they have be it millions or only SS.

You can donate your body to a medical school, after they are finished with it they return the ashes to whoever.

[Blonde Granny]

My DH retired in 1995 at the age of 51.   We were well over the $1M mark at that point.  We had quite a ride before he died Dec. 1st, but managed to maintain our balances at just under $1M.  Not bad for 20 years of retirement.

He was always more of a spender than me, so I've adjusted some investments lately and plan on it growing again.

I have 1 son and 3 grandkids, son will inherit almost everything and 3 grandkids will also get a nice surprise .   I've said this before, I live on DHs SS and my VA disability compensation that comes from his.  I have no car payment, no mortgage, no CC debt...just some monthly household bills i.e. cable, phone, cell etc.

I'm a believer in YNAB and monitor my spending closely, and still don't spend anywhere near what my monthly income is.

[Gardening Grandma]

DH retired in 2008. I had previously retired, but worked part time til 2009.
We had about $500K in retirement accounts, but we both had pensions (no penalty for early retirement) and I began drawing SS (reduced because I was below FRA). DH began drawing SS in 2012.  Our retirement benefits included health ins. Now we are on Medicare (with a Medigap supplemental). Our previous employer puts about $5k into a HSA account for medical expenses.

If we are careful, we are able to keep our taxable income just under the limit at the 15% bracket.

We had a small mortgage (since paid off) and no debt. We find we are living comfortably on the pension/SS income. We use withdawals from the retirement accounts for travel (as long as the accounts are doing well). In spite of the withdrawals, the accounts are up about $150K since retirement, so I think we are doing ok. I use YNAB to plan and track spending and a spreadsheet to record annual expenses and forecasting.

At the time we retired, the retirement accounts were invested at Smith Barney in a dozen accounts. In 2011 I moved the accouns to Vanguard (saving us over 1% in management fees) and now have the funds in 3 low expense VG funds.

[Deleted]

My dad retired in debt but has an 80% fed CSRS pension. He had to go back to work part time after a bad investment left him with a mortgage.

[Tiny]

I'm pretty sure my oldest brother retired (at 63) without 1MM in taxable/retirement accounts... when we talked about his 'journey' to retirement, his biggest 'surprise' was that he could have retired sooner. Between his pension(s) and SS he didn't need to touch his 'savings' He's getting about 70% of pre-retirement income - he has a modest house, a modest car, and 'beer tastes' so some travel - nothing lavish, not a lot of restaurant eating - but lots of cooking/grilling at home (buying the 'good stuff', and having dogs... I suspect his Net Worth (retirement accounts, savings, house) are under the 1MM mark.

I've got another brother who will also retire without 1MM in taxable/retirement accounts. He, too will replace most of his income with pension(s), SS and 401(K). His (and his wife's) Net Worth is probably a bit over 1MM (houses, retirement accounts, savings, etc)

My other brother retired as well (at 55)... but he's got a big bad ass pension, in addition to his savings/retirement accounts.   Not sure what his actual NW is - but it doesn't matter his pension replaced most of his income.  He does do limited duration side jobs - for "pocket money' - because the side job interests him.  

I'm re-thinking HOW I'm socking away money for retirement. I don't particularly want to work until 65 (or 67 my SS retirement age). I will most likely hit the 1MM in Net Worth sometime around age 55 - but it will be 'locked up' in 401(k), houses, pension (cash out value). I need more after tax savings so I can "quit the rat race" at 59.5yo... so I'm looking at shifting my focus- instead of making the "after 50 contribution" I'm trying to sock away the 5K (or whatever it is) in an after tax account (I'm still maxing a Roth and an HSA).

[gooddecisions]

What is your income? Two social security retirement benefits? How much of that covers your basic annual living expenses? Are you also drawing from your other retirement accounts and investments?

[Plain Old Petunia]

Mar 25, 2016 10:17:31 GMT -5 Tiny said:

I'm pretty sure my oldest brother retired (at 63) without 1MM in taxable/retirement accounts... when we talked about his 'journey' to retirement, his biggest 'surprise' was that he could have retired sooner. Between his pension(s) and SS he didn't need to touch his 'savings' He's getting about 70% of pre-retirement income - he has a modest house, a modest car, and 'beer tastes' so some travel - nothing lavish, not a lot of restaurant eating - but lots of cooking/grilling at home (buying the 'good stuff', and having dogs... I suspect his Net Worth (retirement accounts, savings, house) are under the 1MM mark.

I've got another brother who will also retire without 1MM in taxable/retirement accounts. He, too will replace most of his income with pension(s), SS and 401(K). His (and his wife's) Net Worth is probably a bit over 1MM (houses, retirement accounts, savings, etc)

My other brother retired as well (at 55)... but he's got a big bad ass pension, in addition to his savings/retirement accounts.   Not sure what his actual NW is - but it doesn't matter his pension replaced most of his income.  He does do limited duration side jobs - for "pocket money' - because the side job interests him.  

I'm re-thinking HOW I'm socking away money for retirement. I don't particularly want to work until 65 (or 67 my SS retirement age). I will most likely hit the 1MM in Net Worth sometime around age 55 - but it will be 'locked up' in 401(k), houses, pension (cash out value). I need more after tax savings so I can "quit the rat race" at 59.5yo... so I'm looking at shifting my focus- instead of making the "after 50 contribution" I'm trying to sock away the 5K (or whatever it is) in an after tax account (I'm still maxing a Roth and an HSA).

You know about 72t rules, right?  (Just checking).

[tallguy]

Mar 25, 2016 13:29:09 GMT -5 Plain Old Petunia said:

Mar 25, 2016 10:17:31 GMT -5 Tiny said:

I'm pretty sure my oldest brother retired (at 63) without 1MM in taxable/retirement accounts... when we talked about his 'journey' to retirement, his biggest 'surprise' was that he could have retired sooner. Between his pension(s) and SS he didn't need to touch his 'savings' He's getting about 70% of pre-retirement income - he has a modest house, a modest car, and 'beer tastes' so some travel - nothing lavish, not a lot of restaurant eating - but lots of cooking/grilling at home (buying the 'good stuff', and having dogs... I suspect his Net Worth (retirement accounts, savings, house) are under the 1MM mark.

I've got another brother who will also retire without 1MM in taxable/retirement accounts. He, too will replace most of his income with pension(s), SS and 401(K). His (and his wife's) Net Worth is probably a bit over 1MM (houses, retirement accounts, savings, etc)

My other brother retired as well (at 55)... but he's got a big bad ass pension, in addition to his savings/retirement accounts.   Not sure what his actual NW is - but it doesn't matter his pension replaced most of his income.  He does do limited duration side jobs - for "pocket money' - because the side job interests him.  

I'm re-thinking HOW I'm socking away money for retirement. I don't particularly want to work until 65 (or 67 my SS retirement age). I will most likely hit the 1MM in Net Worth sometime around age 55 - but it will be 'locked up' in 401(k), houses, pension (cash out value). I need more after tax savings so I can "quit the rat race" at 59.5yo... so I'm looking at shifting my focus- instead of making the "after 50 contribution" I'm trying to sock away the 5K (or whatever it is) in an after tax account (I'm still maxing a Roth and an HSA).

You know about 72t rules, right?  (Just checking).

Not even necessary.  You can access your 401k without penalty if you separate from your employer after age 55. 

[Plain Old Petunia]

Hurricanegirl, I think your plan sounds great.  Most people don't have 1 million.  Ever.   I don't expect to, but am expecting a comfortable enough retirement nonetheless.  I'm not there yet.  But, I have turned 49.  It's getting closer.

I expect to have about 600k in tax-deferred,  100k or so in a Roth, and a small condo either paid for or close to it.  I will live on 24k per year from tax-deferred plus SS benefits.  The Roth is more of a savings account for big irregular expenses (like replacing a car).

I am unmarried, but in a committed relationship.  I will be splitting groceries and utilities with my SB.

Since my overhead will be low, I expect to manage quite comfortably on that.

[Plain Old Petunia]

Mar 25, 2016 13:36:44 GMT -5 tallguy said:

Mar 25, 2016 13:29:09 GMT -5 Plain Old Petunia said:

You know about 72t rules, right?  (Just checking).

Not even necessary.  You can access your 401k without penalty if you separate from your employer after age 55. 

If you leave it in the 401k.  Not everyone wants to do that.

[tallguy]

Mar 25, 2016 13:39:57 GMT -5 Plain Old Petunia said:

Mar 25, 2016 13:36:44 GMT -5 tallguy said:

Not even necessary.  You can access your 401k without penalty if you separate from your employer after age 55. 

If you leave it in the 401k.  Not everyone wants to do that.

Maybe, but rolling it into an IRA locks you in until 59.5, and taking it all out prompts a large and immediate tax hit.  I think I'll leave mine for a while. 

(I'm fairly certain you should be able to do a partial rollover if you choose, but have never looked into it.  It may depend on plan rules.) 

[Plain Old Petunia]

Mar 25, 2016 13:44:20 GMT -5 tallguy said:

Mar 25, 2016 13:39:57 GMT -5 Plain Old Petunia said:

If you leave it in the 401k.  Not everyone wants to do that.

Maybe, but rolling it into an IRA locks you in until 59.5, and taking it all out prompts a large and immediate tax hit.  I think I'll leave mine for a while. 

(I'm fairly certain you should be able to do a partial rollover if you choose, but have never looked into it.  It may depend on plan rules.) 

Rolling to an IRA does not lock you in, if you follow 72t rules.

You are probably right that a partial roll may be possible.

[tallguy]

Mar 25, 2016 13:52:16 GMT -5 Plain Old Petunia said:

Mar 25, 2016 13:44:20 GMT -5 tallguy said:

Maybe, but rolling it into an IRA locks you in until 59.5, and taking it all out prompts a large and immediate tax hit.  I think I'll leave mine for a while. 

(I'm fairly certain you should be able to do a partial rollover if you choose, but have never looked into it.  It may depend on plan rules.) 

Rolling to an IRA does not lock you in, if you follow 72t rules.

You are probably right that a partial roll may be possible.

True, but who wants to do that if they don't have to?

[txbo]

The first time that I retired was at age 50 from a management position in the IT field, two year later bought an 18-wheeler that I didn’t know how to drive and started as a long haul mover. Retired again at age 61, sold my trucks and never looked back.


We started early, invested in real estate and the markets and it payed off handsomely. Especially the stock market with investments in the seven figure range.


Our monthly retirement income is five figures. Our SS is taxed at 85% and we are in the 25% tax bracket. However, our effective adjusted tax is only 12%. We have no outstanding depth.


Our retirement is much better than anticipated.

[Plain Old Petunia]

Mar 25, 2016 13:58:54 GMT -5 tallguy said:

Mar 25, 2016 13:52:16 GMT -5 Plain Old Petunia said:

Rolling to an IRA does not lock you in, if you follow 72t rules.

You are probably right that a partial roll may be possible.

True, but who wants to do that if they don't have to?

My guess is people who do not like the fees or investment options (or both) in their employer's 401k plan.

[tallguy]

It is still almost universally a bad idea unless you have no other realistic options.  You are locking yourself into at least five years of fixed withdrawals, and you risk retroactive penalties if you screw it up.  If someone is desperate enough that a 72(t) is their only option, fine.  I can't see it though.  

[plugginaway22]

I love reading retirement stories.  DH and I are mid-50s... and we can smell and taste it!  Please keep posting Retirees!!

[Gardening Grandma]

Mar 25, 2016 17:53:25 GMT -5 plugginaway22 said:

I love reading retirement stories.  DH and I are mid-50s... and we can smell and taste it!  Please keep posting Retirees!!

DH was scared and worried.  And 2008 was not a good year to retire!!!  But when anyone ask him, he says his biggest regret is not doing it sooner.

We have a Friday afternoon custom.  "Happy hour".  We mix drinks, toast and say "Thank God it's Friday!!"     It's our personal joke.

Most days we ask "um what day is today?"

[tallguy]

I know when Friday is.  It's everybody else's Thursday.

I know when Monday is too.  It's everybody else's Wednesday. 

[tallguy]

Mar 25, 2016 18:03:36 GMT -5 Ratchets said:

Blonde Granny (or anybody for that matter) - what does YNAB mean?

It stands for You Need A Budget.  It's a financial tracking software program.

I don't bother with it because I don't need a budget, plus you have to pay for it.  Never!! 

[Deleted]

A common denominator in a lot of these anecdotes are pensions.  Tiny 's brothers, @aj 's dad, and Gardening Grandma all mention them.  I am expecting one as well.  Even with my modest income ($60,000 a year), it makes a difference when you will get $30,000 a year and SS before tapping investments.

I think the $1,000,000 is geared more toward those without pensions.  At the (used-to-be) recommended 4% withdrawal rate, that's only $40,000.  So that's the equivalent of my pension + $250,000.  But that will be tough for a lot of high earners to live on.

Right now I have the pension + SS + about $340,000 in IRA/RSA-1/Roth. 

I think I will be comfortable, but I won't be able to spend any more than I spend now. 

[Gardening Grandma]

Mar 25, 2016 18:15:10 GMT -5 @bamafan1954 said:

A common denominator in a lot of these anecdotes are pensions.  Tiny 's brothers, @aj 's dad, and Gardening Grandma all mention them.  I am expecting one as well.  Even with my modest income ($60,000 a year), it makes a difference when you will get $30,000 a year and SS before tapping investments.

I think the $1,000,000 is geared more toward those without pensions.  At the (used-to-be) recommended 4% withdrawal rate, that's only $40,000.  So that's the equivalent of my pension + $250,000.  But that will be tough for a lot of high earners to live on.

Right now I have the pension + SS + about $340,000 in IRA/RSA-1/Roth. 

I think I will be comfortable, but I won't be able to spend any more than I spend now. 

This is true. Our pensions have no cola, so over time won't be as valuable as the SS. When I first started drawing SS, my pension was more. Now, my SS is more than the pension thanks to the cola increases.  DH retired 16 years after I did, so his pension, currently, us more than his SS.

The other benefit to having a reliable monthly income outside of investments is that market fluctuations aren't as scary.  If our entire retirement income came solely from investments, I'd have a hard time sleeping during times of market volatility.

[Deleted]

Mar 25, 2016 12:14:13 GMT -5 alwaysbeoptimizing said:

We're young (42-45) but hoping to retire in about 10 years, so $1M is not nearly enough for us (also in a HCOLA).

That said, my mom will retire next year at 65, with probably around 100K and will be lean. She lives in a LCOLA and will get SS though so should be OK to continue the lifesystyle she has now.

I think cost of living area and age make a lot of difference. I hope to live well into my 80's, so i have to plan for 40 years of income with no SS and I can't leave this HCOLA until the kids are out of school in 15-20 years. I'd ideally like to retire before they finish HS, but we'll see.

If your savings will last 40 years won't it also last forever? Take out 3% and it last 40 years or infiinty.  Take out 5% and it doesnt last 40 years.  You cant fine tune the difference so to get 40 years you take the 3%.

Does the question make sense?

[Deleted]

DH retired with jackshit. He was in a union, a really crappy and useless union, and although he collects from disability from his pension, he is pretty much living off SSDI.

[cronewitch]

I retired with less than a million and now am up 4K in 2 years even with spending and giving away money. I have 950K now when I started at 946K.

Everyone has different needs a couple with pensions and SS might not need any savings but when one dies and their pension doesn't continue the remaining person might need it. As a single I need almost as much as a couple since I still have mortgage and utilities and internet and cable only savings is food and little things. People who think two SS checks is a good start aren't always thinking of being widowed and losing half or more of income.

[Ombud]

Mar 25, 2016 15:37:51 GMT -5 tallguy said:

It is still almost universally a bad idea unless you have no other realistic options.  You are locking yourself into at least five years of fixed withdrawals, and you risk retroactive penalties if you screw it up.  If someone is desperate enough that a 72(t) is their only option, fine.  I can't see it though.  

So take the fixed withdrawals and stick what you don't need (should situation change) and put it into brokerage account?

I don't have a million in liquid assets. But I have a pension, will get SSA -- those 2 will equal my highest earned income year

[tallguy]

Mar 25, 2016 21:48:38 GMT -5 Ombud said:

Mar 25, 2016 15:37:51 GMT -5 tallguy said:

It is still almost universally a bad idea unless you have no other realistic options.  You are locking yourself into at least five years of fixed withdrawals, and you risk retroactive penalties if you screw it up.  If someone is desperate enough that a 72(t) is their only option, fine.  I can't see it though.  

So take the fixed withdrawals and stick what you don't need (should situation change) and put it into brokerage account?

I don't have a million in liquid assets. But I have a pension, will get SSA -- those 2 will equal my highest earned income year

Certainly possible, but remember what started this arc.  A poster said:

I don't particularly want to work until 65 (or 67 my SS retirement age). I will most likely hit the 1MM in Net Worth sometime around age 55 - but it will be 'locked up' in 401(k), houses, pension (cash out value). I need more after tax savings so I can "quit the rat race" at 59.5yo...

Another poster suggested 72(t) as a possibility, and I countered that it wasn't necessary.  If the poster actually quit the rat race at 59.5 then neither would be necessary.  To quit between 55 and 59.5 leaves the 401k access as the superior choice.  Quitting before 55 eliminates that option and leaves the 72(t) viable, but locks you into even more years of payouts.  You can certainly do what you suggested and put any excess into a brokerage account, but in the meantime you have been forced to take what you don't need (and presumably would have preferred not to take) and create an undesired and unnecessary tax hit for yourself. 

[Plain Old Petunia]

Mar 25, 2016 20:35:39 GMT -5 @empressspunkles said:

DH retired with jackshit. He was in a union, a really crappy and useless union, and although he collects from disability from his pension, he is pretty much living off SSDI.

So how is it going financially? Is his income adequate? Are you still working?  Do you (the two of you) have an adequate nest egg?