r/MoneyDiariesACTIVE • u/ThatBitchA • 4d ago
Retirement / Pension Related Retirement figures
The time has come and we're calculating our retirement figures.
Here's my basic equation.....
**Housing (property taxes, maintenance) + transportation + healthcare + food + everyday living × # of expected retired years.**
How's our equation look? Are we missing anything major? I know we'll need to account for inflation.
We're anticipating 20-25 years of life post retirement. This is a very high estimate. I think 15-20 years is likely more accurate.
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u/PlentyParsnip1740 4d ago
since people usually plan for retirement to last 10+ years, that’s a long enough term to keep the money invested, so it’s not as simple as “save up expenses * years in cash” like you might for other savings goals. most people who plan for retirement invest until they have 25x their annual expenses, and then withdraw 4% each year. this has something like a 99% chance of success (ie, not running out of money) over a 30 year period
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u/ThatBitchA 4d ago
So.... similar equation to mine, except times 25. Great to hear. Thanks!
Idk if keeping money in the market is the goal for us. 🫣 There's got to be other options, right? Right?
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u/PlentyParsnip1740 3d ago
the only other option that i know of is to rely on a pension or social security, which isn’t enough for most people. why wouldn’t you want to keep money in the market? that’s how millions of americans retire every year
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u/ThatBitchA 3d ago
Don't trust the market or see the value. 🫣
Preparing myself for the flurry of downvotes.
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u/Pitiful-Comedian4248 2d ago
Is your family involved in businesses or real estate? I know people who don’t really invest but own lots of properties and different income sources from rent and stuff
It’s a lot more hands on though than the market and exposed to a local of local risk
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u/exitcode137 3d ago
If you want it to at least keep pace with inflation, you can put as much as you can into I-bonds. That’s like $10k/year per person. Or some kind of bond ladder
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u/not_rachel 3d ago
I think a big piece you're missing is elder care -- assisted living or memory care, or in-home care plus renovation costs to make your home safe and accessible for you if you plan to age in place. You likely won't need it at all for the early years of your retirement, but depending what you're envisioning, it could easily end up being more expensive than all of the other pieces of your equation.
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u/ThatBitchA 3d ago
That's included in Healthcare. We've got a few ideas in mind depending on need.
Our home is already fairly safe and accessible. Minimal additions/upgrades if we need them.
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u/Pitiful-Comedian4248 4d ago
What does transportation assume? Are you going to retire to a place with transit ?
At a certain point driving becomes risky so you need access to transit (regular bus/train), handivan (is it available in your area?
Are services limited ) or income to pay for drivers to take you to appointments/shopping. Is the weather where you plan to live ok to walk around or is it often too hot/icy.
Not having transit can make life super isolating and depressing for old people.
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u/ThatBitchA 3d ago
Yes, our place has transit. Also includes things like rideshare or other paid for transportation services.
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u/eat_sleep_microbe 4d ago
How about for just general life enjoyment like the costs for hobbies, vacations, discretionary spending or even donations (if able)? I’d overestimate healthcare costs for elder care/assistance living and other costs like services for cleaning, yard work, etc. once you guys are less mobile.