https://boards.hellobee.com/ Pregnancy, Baby and Parenting blog, by Hellobee en Sat, 04 Apr 2026 17:20:12 +0000 https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833470 Wed, 11 Jul 2018 20:50:39 +0000 gotkimchi 2833470@https://boards.hellobee.com/ <p>@Adira: will do! </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833467 Wed, 11 Jul 2018 20:45:17 +0000 Adira 2833467@https://boards.hellobee.com/ <p>@sunny: Maybe I wasn't clear about how I was using the calculator. I figured out my yearly expenses and then compensated for inflation. Then I entered in a random portfolio amount ($1M) into the calculator and checked the results. It wasn't going to be enough, so I tried $2M, which might be enough, but to be safe, I upped it to $2.5M. That's where I got my goal - just guessing and using the calculator with my assumed expenses.</p> <p>Hope that cleared things up! </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833464 Wed, 11 Jul 2018 20:40:54 +0000 Adira 2833464@https://boards.hellobee.com/ <p>@sunny: I mean... We got to the same numbers, just in a different way, right? I was using future dollars for my target amount so I could figure out if I'm going to reach it based on my current savings. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833462 Wed, 11 Jul 2018 20:38:19 +0000 Adira 2833462@https://boards.hellobee.com/ <p>@gotkimchi: Right, if your yearly expenses for you and your SO when you retire will be about $40k in today's dollars, then together, you'd need around $2.5M, assuming you're retiring in ~30 years and living for another 30 years.</p> <p>I'd be happy to email you my spreadsheet, though I won't be able to until around noon eastern tomorrow, so wall me your email address around then. :) </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833461 Wed, 11 Jul 2018 20:35:15 +0000 sunny 2833461@https://boards.hellobee.com/ <p>@Adira: I pointed it out because you were saying that $40k, after inflation would be $103k in expenses. But if you're still relying on $1M as a goal # then your change of failure is almost certain. </p> <p>My point was, whatever dollar you use in the calculator as your yearly expenses, you'll also need to use the same dollar as your retirement goal #, which is why it is just easier to think in terms of a multiple of your expenditures. </p> <p>So if you are thinking in today's dollars $40k then you'd need 25x $40x = $1M. If you're thinking in 2050 dollars $103k, then you'd need 25x $103k = $2.5M. </p> <p>Personally, I find it easier to think in today's dollars rather than future dollars since I can easily imagine what a $X year lifestyle looks like. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833459 Wed, 11 Jul 2018 20:25:57 +0000 gotkimchi 2833459@https://boards.hellobee.com/ <p>@Adira: can you send me your excel sheet? </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833457 Wed, 11 Jul 2018 20:25:09 +0000 gotkimchi 2833457@https://boards.hellobee.com/ <p>I have a general question for everyone - when people are calculating this it is for a family or 2 people right? So like my husband and I need 2.5mil combined correct? </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833440 Wed, 11 Jul 2018 17:40:04 +0000 Adira 2833440@https://boards.hellobee.com/ <p>@sunny: I don't think it matters that the calculator uses today's dollars. I already took inflation into account for my expenses. Or are you saying the calculator doesn't take into account inflation when determining if your money will last 30 years? </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833429 Wed, 11 Jul 2018 16:43:16 +0000 Pollywog 2833429@https://boards.hellobee.com/ <p>We each put in the federal Max ($18500). Our thought is that we can afford it now and it'll give us options down the road to save less. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833423 Wed, 11 Jul 2018 16:25:07 +0000 sunny 2833423@https://boards.hellobee.com/ <p>@Adira: the $40k/year example with $1M in savings was assuming today’s dollars. In 2050, if you require $103k/year after inflation then you’d need 25-30x that. However the $103k after 32 years is based on 3% inflation which I think is aggressive. I think historically we have been closer to 2% which makes the $40k turn into $75k/year. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833418 Wed, 11 Jul 2018 15:42:19 +0000 periwinklebee 2833418@https://boards.hellobee.com/ <p>@Adira: Thank you, this example is super helpful!</p> <p>@codeitall: I agree, there's so much uncertainty. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833403 Wed, 11 Jul 2018 14:09:23 +0000 Mrsbells 2833403@https://boards.hellobee.com/ <p>@codeitall: i agree that your lifestyle and expenses will be drastically different once you are not working and don't have dependents. I take all those projections with a big fat grain of salt </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833398 Wed, 11 Jul 2018 13:32:33 +0000 808love 2833398@https://boards.hellobee.com/ <p>@gestalt: that’s how I do it. I start with a sample budget as a senior. Then multiply how much I need monthly (minus the amount coming in) by estimated months I plan to live. Inflation is tricky so I just double almost everything. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833396 Wed, 11 Jul 2018 13:22:51 +0000 Adira 2833396@https://boards.hellobee.com/ <p>Here's an example of my retirement worksheet. It's got starting salary, assumed increase, 401k contribution, employer match, starting salary, and any additional savings, and then calculates what will be in my 401k each year, so I can see if I'm on target. I update it every year with my new salary and current account amounts so I can see if I'm still on track. </p> [attach=340/18/pbpse3.600x284.retirement.jpg] https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833395 Wed, 11 Jul 2018 13:21:40 +0000 codeitall 2833395@https://boards.hellobee.com/ <p>Honestly, I think those calculators of how much you need in retirement are pretty useless.</p> <p>#1: They are based a lot on your current lifestyle and I currently have young kids living with me...</p> <p>#2: There's no guessing how government programs are going to be when you retire.</p> <p>#3. Your cost of living may drastically change based on where you retire to.</p> <p>#4. They are based on a projection of raises and inflation.</p> <p>#5. It all depends on when you retire and when you start pulling money out.</p> <p>So I'm aiming to save as aggressively as possible. I max out my HSA and contribute as much of my salary as possible within our budget. I used to do post-tax, but now that we're dual-income, I moved to pre-tax. About 80% of my raises get moved into retirement contributions so even though I save more, we're not really spending more. I've seen the graphs about the power of compound interest, so I started contributing as early as I could and I'm pretty happy with how my saving has gone so far. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833393 Wed, 11 Jul 2018 13:14:23 +0000 Adira 2833393@https://boards.hellobee.com/ <p>I'm probably being pretty conservative (at least, I hope I am), so I took my monthly/yearly expenses and assumed it would stay roughly the same (mortgage and daycare costs will decrease, but healthcare costs and travel will increase). Then calculate what that expense will be when I retire, assuming 3% inflation increase. So if you're currently spending $40k a year and are planning to retire in 2050, that's $103k a year.</p> <p>Enter that number into the calculator @sunny: linked and then put a number for the portfolio and see how it fairs. $1M at retirement only has a 0.9% chance of being enough money. $2M gives you a 70% chance of having enough money. $2.5M is a 93% chance of having enough. That seems like a good amount.</p> <p>So you set your goal for $2.5M, with maybe the hopes of having more. Assume a rate of return on investments somewhere between 5 and 8%, you can figure out how much you need to save each year to get to $2.5M. If you have $0 in savings now, and start putting away $18500 a year, assuming a 6% rate of return would get you to $1.8M by 2050.</p> <p>Based on our example, that won't be enough, but maybe you have money in savings already. It's also safe to assume the max you can put in your 401k will increase over time, as it has been. If your employer matches a percentage, maybe you don't even need to be maxing out your savings to get to your goal. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833391 Wed, 11 Jul 2018 12:58:44 +0000 snowjewelz 2833391@https://boards.hellobee.com/ <p>@periwinklebee: I used to just talk to whoever but I found this lady I loved and I got her direct # and I always only speak to her and she has helped me a ton! </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833387 Wed, 11 Jul 2018 12:47:54 +0000 periwinklebee 2833387@https://boards.hellobee.com/ <p>@snowjewelz: It's good to hear that they are helpful, I've wondered before if they'd be useful but never tried!</p> <p>@sunny: Thank you for the calculator link!</p> <p>@gestalt: @sunny: Thank you!</p> <p>@kiddosc: @MrsSCB: I've been negligent about adulting, though I do try to save what I can, but want to get on top of it now, as we need to make some life decisions that will affect finances. I'm not concerned about how much people save, as it will be very person-specific and I know hb isn't representative, but just curious how people thought through it.... </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833377 Wed, 11 Jul 2018 12:26:34 +0000 MrsSCB 2833377@https://boards.hellobee.com/ <p>@kiddosc: @mrsbubbletea: Don't feel bad, I don't think it's about being adult-y so much as the fact that Hellobee is not all that representative of the general population when it comes to finances :-) </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833371 Wed, 11 Jul 2018 12:10:57 +0000 kiddosc 2833371@https://boards.hellobee.com/ <p>People are really putting $37,000 a year into retirement savings? @mrsbubbletea: I am also feeling very non-adult after learning that.</p> <p>A meeting with a financial planner is on our list of to-dos this year. We've looked at several online calculators, but the majority of them are hosted by companies trying to sell you services and I find them untrustworthy. We each put 10% of our salary into retirement accounts, and will increase that amount as daycare expenses drop-off, but need to do better in the long-term plan department. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833367 Wed, 11 Jul 2018 12:06:12 +0000 sunny 2833367@https://boards.hellobee.com/ <p>@periwinklebee: from what I have read, the generally accepted rule of thumb is for a 30 year retirement (eg. age 65-95), you will need to have saved up 25x-30x yearly spending in retirement. So if you think you’ll spend $40k per year, then you would need at least $1M at age 65 to retire. </p> <p>In order to get to $1M you would have to work backwards to get to a yearly savings goal that makes some assumptions on growth. </p> <p>I like <a href="http://www.firecalc.com" rel="nofollow">http://www.firecalc.com</a> to model out different scenarios. It takes only 3 inputs: retirement savings, time horizon and yearly spending and it tests against historical market returns. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833361 Wed, 11 Jul 2018 11:50:16 +0000 Ajsmommy 2833361@https://boards.hellobee.com/ <p>We have a financial guy that we go to and we discuss our goals and where we are in reference to said goals. He does use a computer program to calculate futures, it's just a "what if" scenario and it uses the market past/present and predicted behavior to calculate. Of course there's always a chance that the calculations will be way off or never come to fruition bc obviously no one can really predict the future. It sounds like your DH has a sheet that already does that so I guess you're just asking others what we do? So to answer your question we have someone who does it for us and we talk to him and he shows us the "predictions"</p> <p>As pp's stated we have calculated "expected expenses".. again taken with a grain of salt bc who truly knows what our expenses will really be?? and voila we can see if we are on the right path or if we have a deficit, overage or whatever. </p> <p>We max out our 401k yearly, as another pp said we put in $18500 into DH's and mine and we also kick any extra we have to savings or we invest it... we randomly discuss and decide when we have the extra. </p> <p>We don't have a number in mind or anything. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833351 Wed, 11 Jul 2018 11:38:02 +0000 gestalt 2833351@https://boards.hellobee.com/ <p>The best way to set your retirement savings goal is to first determine how much you think you'll need at retirement. What will your budget look like? Will you have income streams outside of your retirement savings? What will your expenses be? Do you hope to have enough money for extra traveling, to give to your grandkids, etc? From there you see what that amount would be, see what age you think you'll retire, and then you can calculate what amount you'll require at retirement age.</p> <p>If you're willing to do the work, this is the best way to see what *you and your family* will need (and if it's attainable). Try not to listen to these "rule of thumb" statements you hear - "save 10%", "you'll need 70% of your pre-retirement income", etc. </p> <p>I think a fee-based planner is a good idea as they actually help with budgeting and how much you'll need to save. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833318 Wed, 11 Jul 2018 10:12:51 +0000 periwinklebee 2833318@https://boards.hellobee.com/ <p>@PurplePumps: Thank you, I feel really similarly... I've been bad about long-range planning basically because I was saving what I could and there wasn't really an opportunity to make any life decisions to change things, but now I really want to get up to speed and need to understand what's going on given it could have a big impact on how we live our lives. I'm afraid of course of making a mistake so would like a second opinion, but "we use very sophisticated software tools and models" would not cut it. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833316 Wed, 11 Jul 2018 10:08:58 +0000 snowjewelz 2833316@https://boards.hellobee.com/ <p>So I just speak to a financial planner through the company I use where my IRA and another portfolio is at. I have found that to be sufficient as they get on a call with me twice a year, get an update on my financial status, current situation, how all my investments are doing and whether we're "on track". </p> <p>So they know that for the past 3 and the next 3 or more years, I have daycare costs and therefore not really putting much into these accounts (I still contribute the max to my current 401k). But we've established that I should be fine once I come out of the expensive daycare cost land, hopefully have at least 1 raise by then, and will go back to contributing. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833315 Wed, 11 Jul 2018 10:06:13 +0000 periwinklebee 2833315@https://boards.hellobee.com/ <p>@LBee: Even if I completely trust the number - and I'm all for hiring someone to go through everything as I know there's a lot involved - I just want to understand where it comes from (the formulas used to calculate it, which sounds like not surprisingly is hidden behind a software interface). This is all super helpful to know. </p> <p>@mrsbubbletea: not a fan of adulting :silly: </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833314 Wed, 11 Jul 2018 10:01:24 +0000 PurplePumps 2833314@https://boards.hellobee.com/ <p>@periwinklebee: We met with a CFP once who crunched our numbers (current savings, future savings contributions, etc) and all we got was a report saying what our average would be, and then potential high and low based on those numbers projected out to like 80 or something. They definitely did not/could not or would not say how they came to those numbers other than "we use very sophisticated software tools and models". We are super type A control freaks, especially when it comes to something this important, so not seeing the work and steps to come to that did not give us a warm feeling. I know they are trained professionals and all, but we could not just go off of that and trust something it all. We like to see data, numbers, how the numbers move, etc. Since we do that on our own already though, meeting with the CFP did solidify the data we had and confirm what we were doing. </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833312 Wed, 11 Jul 2018 09:57:28 +0000 mrsbubbletea 2833312@https://boards.hellobee.com/ <p>@periwinklebee: ugh it’s posts like this that make me feel like not a real grown up ! </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833310 Wed, 11 Jul 2018 09:56:04 +0000 LBee 2833310@https://boards.hellobee.com/ <p>@periwinklebee: Software is proprietary usually or bought by the firm (there are several popular ones). All plans are legally required by the SEC / FINRA to fully disclose all assumptions. Assumptions are also heavily discussed usually in meetings. A financial planning relationship with a CFP is not one sided - you are very involved in the process. It can take several meetings and you can be presented multiple scenarios in the end. </p> <p>It sounds like you are skeptical and feel you can do it on your own. Good luck! </p> https://boards.hellobee.com/topic/how-did-you-set-your-retirement-savings-goals#post-2833309 Wed, 11 Jul 2018 09:49:30 +0000 periwinklebee 2833309@https://boards.hellobee.com/ <p>@LBee: @gotkimchi: Thanks for the tip about the "fee only fiduciary" - very helpful. Do you know if they will give you whatever model they actually use to crank out the numbers - or if a standard version is available somewhere online - or do those tend to be proprietary? I see the haircut point, but at the same time I want to fully understand exactly where any number that is going to have a big effect on our lives comes from (what the formulas are), what assumptions underly it (there must be lots, as there are so many uncertainties in planning for the future), and whether there might be a reason for modifying those assumptions. </p>