how much do you need to earn for rest of your life?

by Propagandhi711 Thu Aug 28, 2014 10:57 am

simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

by Marathadi-Saamiyaar Thu Aug 28, 2014 11:31 am

Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

All these calculations are way too subjective. The looters and accountants are too stupid to recognize too many life changes and reduced needs (not to mention ethnic and cultural needs) that people expect.

Life is not a simple formula... Why is it that all these business and accounting formulas are simple arithmetic ? does it take into account living in Albuquerque, Miami, NYC, or SFO ????

by michelle2 Thu Aug 28, 2014 11:38 am

Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

"subtract," not "substract."

by Vakavaka Pakapaka Thu Aug 28, 2014 11:45 am

Hmm....

So, if you are 69, all you need is 1.5*the gross salary! Looks like they want the guy to die in 1.5 years.

For Uppili, the figure will be negative. So, he should throw the money away (or donate to LTTE nadu and Telangana), get a loan for daily expenses and do what the pieceful do - leave the world right away for 72.

by southindian Thu Aug 28, 2014 11:46 am

Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

I calculated a lot from above equation and that's too much money.

I'll probably die in the next 5 years.

by nevada Thu Aug 28, 2014 11:51 am

michelle2 wrote:
Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

"subtract," not "substract."

You didn't correct the headline! "How much do you need to earn for the rest of your life?"

by Hellsangel Thu Aug 28, 2014 11:52 am

nevada wrote:
michelle2 wrote:
Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

"subtract," not "substract."
You didn't correct the headline! "How much do you need to earn for the rest of your life?"

No dollar or dime for Ammachi!

by michelle2 Thu Aug 28, 2014 11:57 am

nevada wrote:
michelle2 wrote:
Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

"subtract," not "substract."
You didn't correct the headline! "How much do you need to earn for the rest of your life?"

you're right.

by Marathadi-Saamiyaar Thu Aug 28, 2014 12:20 pm

michelle2 wrote:
nevada wrote:
michelle2 wrote:
Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

"subtract," not "substract."
You didn't correct the headline! "How much do you need to earn for the rest of your life?"

~~you're right.~~

You are correct....is the right way.

by smArtha Thu Aug 28, 2014 1:41 pm

Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

Do you have any idea about Retirement Planning Tools/Calculators? Which one is the best out there etc.?
I checked on Fidelity's On Track to Retirement tool (second one on the page) and it shows about 30% lesser target than what your arithmetic does for the same age to retire i.e. 70 years.

Also why would I need my current total comp equivalent at 70? No expenses for Kids and College savings or retirement savings and most probably no mortgage to pay off. Just the annual operational expenses for myself and spouse plus a cost of a comprehensive health policy could be the last parameter in your approximate formula above.

by TruthSeeker Thu Aug 28, 2014 3:21 pm

Good Q. Of course, one shoe size does not fit all.

So, let me try to think and answer the Q myself, given that your house is paid off, kids have finished college (i.e. no expenses for them anymore). Average Expenses per month:

1. Cell Phone/Internet/TV - $300
2. Home Utils - $500
3. Travel - $1000
4. Food/Groceries - $500
5. Medicines/Hospital - $1000
6. Home Maintenance - $200
7. Insurance - $500

That totals to $4000, lets round it to $5000 pm or ~$60K.

For planning purpose, tax bracket of 30%, so an income needed of at least $80K pa or about $6667 pm or $7K.

Assuming that one has rentals/investments that can produce 4% ROI, savings needed for $80K/0.04= $2M.

Average Social Security, if I choose to retire at 62 - which I will, is ~$1500, to reduce monthly need to $7K-$1.5K = $5.5K or $63K pa or $63K/0.04=$1.57M of savings.

Conclusion - Savings of at least $1.5-$2M, excluding your home values.

During 40s, one must:

1. Write/Share their Will
2. Prepare a spreadsheet of all Finance, and share w/Spouse
3. Save for retirement vigorously

Persistent thoughts,
TS.

by MaxEntropy_Man Thu Aug 28, 2014 3:27 pm

what assumptions are being made about retirement age in these calcs and what assumptions are made about life expectancy? people are living a lot longer and so if one's intellect is in good working order and assuming that one is not in a manual labor job, why not keep working, especially if one likes what one is doing? the key thing about that though is remaining in good health.

by TruthSeeker Thu Aug 28, 2014 3:53 pm

During 30s:

1. One must obtain a life insurance - I chose Term, because I wanted to see how old my kid would be, when it ends.

2. I will not even get into 401Ks, and Employer match kind of advise, because I believe that is well known. Nutshell - Maximize 401K.

3. HSA - Health Savings Account - Family limit is $6550 in 2014, if U qualify. Contribute to it for tax benefits. Money never expires.

4. FSA - Flexible Spending Account - Ideal to save on your children daycare/child care before or after school, Pre tax.

5. 529 - This one is tricky. I did not start on this till last year, but have decided to contribute to it vigorously, my eldest is 12. The reason - I went through the recession, but now I see the value.

@Maxi - With 4% ROI - There is no life expectancy. Age to Retire - Whenever you have the money: $1.5M-$2M - you become eligible. Please read my post carefully, answers are there. My post starts with - "One shoe does NOT fit all".

With best wishes to all Sulekhites,
TS.

by Guest Thu Aug 28, 2014 5:40 pm

Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

by Kris Thu Aug 28, 2014 6:08 pm

Kinnera wrote:Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.

by Guest Thu Aug 28, 2014 6:13 pm

Kris wrote:
Kinnera wrote:Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.

Sigh! Hubby and i want to retire before 55. Maybe that will remain just a dream...or maybe not.

by Kris Thu Aug 28, 2014 6:28 pm

Kinnera wrote:
Kris wrote:
Kinnera wrote:Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.
Sigh! Hubby and i want to retire before 55. Maybe that will remain just a dream...or maybe not.

>>>Or a nightmare. You may get bored out of your wits.

by bw Thu Aug 28, 2014 6:31 pm

Kris wrote:
Kinnera wrote:
Kris wrote:
Kinnera wrote:Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.
Sigh! Hubby and i want to retire before 55. Maybe that will remain just a dream...or maybe not.
>>>Or a nightmare. You may get bored out of your wits.

why should having the freedom to do whatever one desires to do be a nightmare?

by Kris Thu Aug 28, 2014 6:52 pm

bw wrote:
Kris wrote:
Kinnera wrote:
Kris wrote:
Kinnera wrote:Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.
Sigh! Hubby and i want to retire before 55. Maybe that will remain just a dream...or maybe not.
>>>Or a nightmare. You may get bored out of your wits.

why should having the freedom to do whatever one desires to do be a nightmare?

>>>I am surprised after all these years of participation in SUCH you are holding on to this dream of humanity engaging in worthwhile endeavors, if left to its own device.

by truthbetold Thu Aug 28, 2014 6:57 pm

nevada wrote:
michelle2 wrote:
Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

if you're 40 and making 250k per year, you need to earn 11,250,000 USD. assuming you can keep earning at the same rate till 60, your income will cover you for 7,500,000 USD. which means you need to have savings of 3.75 million before you retire. gives perspective on how your future might look like (drastically scaled back lifestyle vs living comfortably)

"subtract," not "substract."
You didn't correct the headline! "How much do you need to earn for the rest of your life?"

nevada
Why do you need to tag along Flimflam all the time? If you feel like offering your editorial services, do so by yourself at your own convenience.

by bw Thu Aug 28, 2014 7:03 pm

Kris wrote:
bw wrote:
Kris wrote:
Kinnera wrote:
Kris wrote:

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.
Sigh! Hubby and i want to retire before 55. Maybe that will remain just a dream...or maybe not.
>>>Or a nightmare. You may get bored out of your wits.

why should having the freedom to do whatever one desires to do be a nightmare?

>>>I am surprised after all these years of participation in SUCH you are holding on to this dream of humanity engaging in worthwhile endeavors, if left to its own device.

haha, to start off, one can post on SUCH without stealing time from the employers. isn't that a dream in itself? who said it has be something worthwhile? Razz

honestly, unless the "job" coincides with one's passion, why should one bother reporting to anyone or meet any obligations? even in academics with a lot of freedom and all that, there are a lot of nagging tasks that one has to do. won't it be fun if one can simply do what one wants to do without worrying about the paycheck? of course, it also depends on what lifestyle one chooses to lead and how much is "enough".

by Marathadi-Saamiyaar Thu Aug 28, 2014 11:50 pm

Kris wrote:
Kinnera wrote:Good posts, TS. I heard somewhere that $ 1 M/person should be enough to retire (assuming the house is paid off, kids' edu is done and one has no loans). So it's 2M/couple, same as what you said.

>>>Unfortunately, there is no such thing as being too thin or having too much money. The latter is especially true with the uncertainties in the economy, especially if you are looking at a 30 year + time frame. I am thinking 70 is the new 62 when it comes to retirement.

i will be working my 2 min-wage jobs until the very end....i cannot even afford to retire in India. yes retiring at 62 is stupidity unless one has a huge inheritance.

by truthbetold Fri Aug 29, 2014 4:39 am

Uppili
Retiring in India is an expensive business. In us you have an excellent social net, supported by security, and services. It is very expensive to get even remotely similar services. One should not confuse comforts available during a short vacation with long term stay in India. Add to that the danger of swindlers inside family and looters outside.
Only reason you go back to India in retirement is despite the misery you enjoy interacting with people.

by Propagandhi711 Fri Aug 29, 2014 7:58 am

ppl get yourselves familiarized with this concept called inflation. "i read somewhere" doesnt cut it nor do lowball calculations that dont account for inflation, health issues, travel expenses, hobbies, hookers....

by Propagandhi711 Fri Aug 29, 2014 8:06 am

Vakavaka Pakapaka wrote:Hmm....

So, if you are 69, all you need is 1.5*the gross salary! Looks like they want the guy to die in 1.5 years.

For Uppili, the figure will be negative. So, he should throw the money away (or donate to LTTE nadu and Telangana), get a loan for daily expenses and do what the pieceful do - leave the world right away for 72.

well, if you're 69 hopefully you've saved enough to last you till 95 or thereabouts or have to work at walmart as the surly greeters in the front

by Propagandhi711 Fri Aug 29, 2014 8:15 am

smArtha wrote:
Propagandhi711 wrote:simple calculation I saw somewhere:

substract your age from 70 * 1.5 * your current gross household income.

Do you have any idea about Retirement Planning Tools/Calculators? Which one is the best out there etc.?
I checked on Fidelity's On Track to Retirement tool (second one on the page) and it shows about 30% lesser target than what your arithmetic does for the same age to retire i.e. 70 years.

Also why would I need my current total comp equivalent at 70? No expenses for Kids and College savings or retirement savings and most probably no mortgage to pay off. Just the annual operational expenses for myself and spouse plus a cost of a comprehensive health policy could be the last parameter in your approximate formula above.

the best one I've seen so far is flexible retirement planner...it looks simple but is quite sophisticated, atleast for the free ones...does monte carlo simulations based on average return+/-standard deviation numbers. it ofcourse also does conventional avg return based calculations but the sophistication is there if you want to play with it. it is also unique in that it allows you to vary spending patterns in retirement as a response to market conditions (which is a better approximation of real life imo because typically retirees become conservative like rest of us when the general market is doing badly and splurge a little when it's doing well). if you like messing around with different models, it's a great tool im

by b_A Fri Aug 29, 2014 12:06 pm

truthbetold wrote:Uppili
Retiring in India is an expensive business. In us you have an excellent social net, supported by security, and services. It is very expensive to get even remotely similar services. One should not confuse comforts available during a short vacation with long term stay in India. Add to that the danger of swindlers inside family and looters outside.
Only reason you go back to India in retirement is despite the misery you enjoy interacting with people.

Agree 100%. It is a myth that India is a cheaper retirement place. If you want to maintain the same lifestyle, there is not much of cost difference. Some places in India can be even more expensive than some of the places here in USA. And because of the inflation trends , the comparisons will only become worse.

by MaxEntropy_Man Fri Aug 29, 2014 1:35 pm

b_A wrote:
truthbetold wrote:Uppili
Retiring in India is an expensive business. In us you have an excellent social net, supported by security, and services. It is very expensive to get even remotely similar services. One should not confuse comforts available during a short vacation with long term stay in India. Add to that the danger of swindlers inside family and looters outside.
Only reason you go back to India in retirement is despite the misery you enjoy interacting with people.
Agree 100%. It is a myth that India is a cheaper retirement place. If you want to maintain the same lifestyle, there is not much of cost difference. Some places in India can be even more expensive than some of the places here in USA. And because of the inflation trends , the comparisons will only become worse.

add to it traffic congestion, pollution, the lack of great open clean spaces etc. and the comparison gets even worse. also for most retired people, the home country is where their adult kids live.

by truthbetold Fri Aug 29, 2014 5:12 pm

B-a and max
Agree with you. Great point about children. I observed several relatives go through this kind of discussion and ditch India and move closer to children.

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