Tag Archives: net worth

Your Retirement Lifestyle

I flipped through my KPF magazine and read a great article on, “Your Retirement Lifestyle”. So yesterday, I decided to figure out my Net Worth (see bottom of post) and was thinking about what I am going to need to financially accomplish to meet my retirement lifestyle. Of course, I want the grandest. Don’t we all? ;)

But, I would settle for mediocre, too. Read the section below. What’s your dream retirement?

From Kiplinger’s Personal Finance Magazine, February 2009

Most experts recommend that you replace 75% to 85% of your pre-retirement income in order to meet your needs after you stop working. But the size of your nest egg will dictate how many extras you can afford.

The snapshots below look at a 65-year-old couple who earned $90,000 a year while working and who need about $70,000 annually in retirement to maintain the same lifestyle. Their expenses were calculated in the 2004 Retirement Income Replacement Ratio Study by Aon Consulting and Georgia State University. We assumed the couple withdraws a conservative 4% of their savings initially, adjusted for inflation each year (add 3%), and then we imagined how they might spend it.

$500,000 Nest Egg
Simple Pleasures
Annual Income: $70,000
($30,000 From Social Security);
$20,000 from a Pension;
$20,000 from Personal Savings

Lifestyle: With a cushion of about $20,000 a year, you can put a down payment on a used RV and tour the country. Focus on staying healthy and active because your budget doesn’t include long-term-care-insurance premiums. If you need cash in the future, you could take out a reverse mortgage.

$1-Million Nest Egg
Vintage Moments
Annual Income: $90,000
($30,000 From Social Security;
$20,000 from a Pension;
$40,000 from Personal Savings)

Lifestyle: You’ll savor life in your golf-course community and even splurge on an occasional cruise or a trip to Disney World with the grandkids-as long as you paid cash for your new home. If you still have a mortgage, you might have to trim some of the extras., such as annual theater subscriptions or season tickets for your local team. The rate of return on your investments will determine how long your money will last. You might want to use some savings to buy an annuity.

$2-Million Nest Egg
Sparkling Future
Annual Income: $130,000
($30,000 from Social Security;
$20,000 from a Pension;
$80,000 from Personal Saving)

Lifestyle: You might want to trade in your big house for two condos – one in a warm-weather destination. You shouldn’t have to worry about running out of money, even with a 50% chance that one of you will live to 92 or beyond. Take advantage of the market downturn to gift more stock to family members while reducing the size of your taxable estate. Pay attention to estate-tax changes and adjust your plans.

Look at my Net Worth. In the negative. :(

 

But, I am going to fix this right? :)

But, I am wondering what it is going to take to build $1-Million in Assets to satisfy the medicore lifestyle.

A mortgage, of course. A rental property or two… depending where you live (I’m in the 1/2-million or more state of CA). But, then I need time to build equity in the homes to sell and make the large Personal Savings.

Or should I keep buying more rental properties to pass to my kids. Hopefully, there will be equity in them. Then the ‘rent’ paid by the tenants can be a passive source of income.

Thoughts to ramble in my head.

So tell me, what do you think it will take to reach the Retirement Lifestyle you Want? And don’t forget to place yourself in the fact you still have the everyday lifestyle to still support. I would love to hear some tossed thoughts from your mind.

I really wonder how all these finance experts expect us to financially fulfill every category (kid’s college, weddings, buying a house, saving for retirement, etc…)! But, I did come to the conclusion that maybe its time to whip out the Monopoly game again and polish my skills.