Question about net worth, please advise.

[davelj]

[quote=CONCHO]What is this “retirement” you speak of? That word sounds very 20th century.[/quote]

Hahaha… that’s what I was thinking. I think folks should plan on working at least until 70, and until 75, if possible. The best retirement plan is to find something that (a) you actually like doing, and (b) you can do well into old age. The longer you can stave off having to live off of your nest egg, whatever the size, the better.

[an]

[quote=UCGal]AN…
Do you plan to drive when you retire?

I assume you’d use your current equity to pay for a place in Del Mar or Solana Beach.

Cars wear out…even when lightly used. You still need to budget for gas, insurance, tires, etc… if you own a car.[/quote]
Yes, I plan to drive. I said remove car payments, not car maintenance or gas, etc. Right now, even with today’s gas price, we’re paying ~$150/month in gas for 2 cars. When we’re retired, we can reduce to 1 car and we no longer need to drive everyday to work. So, I suspect it’ll be much less than that. I suspect insurance will go down to for lightly used vehicles vs vehicles used for commute. Tires will last much longer too. Right now, we’re driving ~10-15k miles/years, so tires should last 4-5 years. When we’re retired, I suspect 1 set of tires will last 8-10 years. Bottom line is, if you project the current expense for transportation (not including car payment) will be more than enough to cover the transportation cost during retirement.

Yes, you assume correctly, I don’t plan to retire until I can pay off my retirement house.

[an]

[quote=UCGal]AN…
Do you plan to drive when you retire?

I assume you’d use your current equity to pay for a place in Del Mar or Solana Beach.

Cars wear out…even when lightly used. You still need to budget for gas, insurance, tires, etc… if you own a car.[/quote]
Yes, I plan to drive. I said remove car payments, not car maintenance or gas, etc. Right now, even with today’s gas price, we’re paying ~$150/month in gas for 2 cars. When we’re retired, we can reduce to 1 car and we no longer need to drive everyday to work. So, I suspect it’ll be much less than that. I suspect insurance will go down to for lightly used vehicles vs vehicles used for commute. Tires will last much longer too. Right now, we’re driving ~10-15k miles/years, so tires should last 4-5 years. When we’re retired, I suspect 1 set of tires will last 8-10 years. Bottom line is, if you project the current expense for transportation (not including car payment) will be more than enough to cover the transportation cost during retirement.

Yes, you assume correctly, I don’t plan to retire until I can pay off my retirement house.

[an]

[quote=UCGal]AN…
Do you plan to drive when you retire?

I assume you’d use your current equity to pay for a place in Del Mar or Solana Beach.

Cars wear out…even when lightly used. You still need to budget for gas, insurance, tires, etc… if you own a car.[/quote]
Yes, I plan to drive. I said remove car payments, not car maintenance or gas, etc. Right now, even with today’s gas price, we’re paying ~$150/month in gas for 2 cars. When we’re retired, we can reduce to 1 car and we no longer need to drive everyday to work. So, I suspect it’ll be much less than that. I suspect insurance will go down to for lightly used vehicles vs vehicles used for commute. Tires will last much longer too. Right now, we’re driving ~10-15k miles/years, so tires should last 4-5 years. When we’re retired, I suspect 1 set of tires will last 8-10 years. Bottom line is, if you project the current expense for transportation (not including car payment) will be more than enough to cover the transportation cost during retirement.

Yes, you assume correctly, I don’t plan to retire until I can pay off my retirement house.

[an]

[quote=UCGal]AN…
Do you plan to drive when you retire?

I assume you’d use your current equity to pay for a place in Del Mar or Solana Beach.

Cars wear out…even when lightly used. You still need to budget for gas, insurance, tires, etc… if you own a car.[/quote]
Yes, I plan to drive. I said remove car payments, not car maintenance or gas, etc. Right now, even with today’s gas price, we’re paying ~$150/month in gas for 2 cars. When we’re retired, we can reduce to 1 car and we no longer need to drive everyday to work. So, I suspect it’ll be much less than that. I suspect insurance will go down to for lightly used vehicles vs vehicles used for commute. Tires will last much longer too. Right now, we’re driving ~10-15k miles/years, so tires should last 4-5 years. When we’re retired, I suspect 1 set of tires will last 8-10 years. Bottom line is, if you project the current expense for transportation (not including car payment) will be more than enough to cover the transportation cost during retirement.

Yes, you assume correctly, I don’t plan to retire until I can pay off my retirement house.

[an]

[quote=UCGal]AN…
Do you plan to drive when you retire?

I assume you’d use your current equity to pay for a place in Del Mar or Solana Beach.

Cars wear out…even when lightly used. You still need to budget for gas, insurance, tires, etc… if you own a car.[/quote]
Yes, I plan to drive. I said remove car payments, not car maintenance or gas, etc. Right now, even with today’s gas price, we’re paying ~$150/month in gas for 2 cars. When we’re retired, we can reduce to 1 car and we no longer need to drive everyday to work. So, I suspect it’ll be much less than that. I suspect insurance will go down to for lightly used vehicles vs vehicles used for commute. Tires will last much longer too. Right now, we’re driving ~10-15k miles/years, so tires should last 4-5 years. When we’re retired, I suspect 1 set of tires will last 8-10 years. Bottom line is, if you project the current expense for transportation (not including car payment) will be more than enough to cover the transportation cost during retirement.

Yes, you assume correctly, I don’t plan to retire until I can pay off my retirement house.

[patientrenter]

The method I use for myself is very simple. To calculate my target retirement asset amount, I multiply the total annual amount I need to spend in order to preserve my standard of living by the number of years I plan to be retired for.

In equations, my target amount is S x (DA-RA), where S = annual spending requirement, RA = my retirement age, and DA = the age at which I want my savings to run out. Choosing DA is tricky. If you decide to have enough until you are 85, you are taking on real risk that you’ll be digging for food in a dumpster at age 86, should you live that long. If you decide to have enough until you are 100, you are taking on a lot less risk of outliving your assets, but you are going to have to retire later.

Which assets do I include? I need to be able to liquidate them over time without affecting my standard of living. So I don’t include any home I live in.

I don’t count future investment returns. Any investment return needs to be reduced for expenses, taxes, and inflation. Staying ahead of all those by a healthy margin would require taking on a healthy dose of risk, with a much higher probability of premature dumpster-diving should the risks not pan out.

[patientrenter]

The method I use for myself is very simple. To calculate my target retirement asset amount, I multiply the total annual amount I need to spend in order to preserve my standard of living by the number of years I plan to be retired for.

In equations, my target amount is S x (DA-RA), where S = annual spending requirement, RA = my retirement age, and DA = the age at which I want my savings to run out. Choosing DA is tricky. If you decide to have enough until you are 85, you are taking on real risk that you’ll be digging for food in a dumpster at age 86, should you live that long. If you decide to have enough until you are 100, you are taking on a lot less risk of outliving your assets, but you are going to have to retire later.

Which assets do I include? I need to be able to liquidate them over time without affecting my standard of living. So I don’t include any home I live in.

I don’t count future investment returns. Any investment return needs to be reduced for expenses, taxes, and inflation. Staying ahead of all those by a healthy margin would require taking on a healthy dose of risk, with a much higher probability of premature dumpster-diving should the risks not pan out.

[patientrenter]

The method I use for myself is very simple. To calculate my target retirement asset amount, I multiply the total annual amount I need to spend in order to preserve my standard of living by the number of years I plan to be retired for.

In equations, my target amount is S x (DA-RA), where S = annual spending requirement, RA = my retirement age, and DA = the age at which I want my savings to run out. Choosing DA is tricky. If you decide to have enough until you are 85, you are taking on real risk that you’ll be digging for food in a dumpster at age 86, should you live that long. If you decide to have enough until you are 100, you are taking on a lot less risk of outliving your assets, but you are going to have to retire later.

Which assets do I include? I need to be able to liquidate them over time without affecting my standard of living. So I don’t include any home I live in.

I don’t count future investment returns. Any investment return needs to be reduced for expenses, taxes, and inflation. Staying ahead of all those by a healthy margin would require taking on a healthy dose of risk, with a much higher probability of premature dumpster-diving should the risks not pan out.

[patientrenter]

The method I use for myself is very simple. To calculate my target retirement asset amount, I multiply the total annual amount I need to spend in order to preserve my standard of living by the number of years I plan to be retired for.

In equations, my target amount is S x (DA-RA), where S = annual spending requirement, RA = my retirement age, and DA = the age at which I want my savings to run out. Choosing DA is tricky. If you decide to have enough until you are 85, you are taking on real risk that you’ll be digging for food in a dumpster at age 86, should you live that long. If you decide to have enough until you are 100, you are taking on a lot less risk of outliving your assets, but you are going to have to retire later.

Which assets do I include? I need to be able to liquidate them over time without affecting my standard of living. So I don’t include any home I live in.

I don’t count future investment returns. Any investment return needs to be reduced for expenses, taxes, and inflation. Staying ahead of all those by a healthy margin would require taking on a healthy dose of risk, with a much higher probability of premature dumpster-diving should the risks not pan out.

[patientrenter]

The method I use for myself is very simple. To calculate my target retirement asset amount, I multiply the total annual amount I need to spend in order to preserve my standard of living by the number of years I plan to be retired for.

In equations, my target amount is S x (DA-RA), where S = annual spending requirement, RA = my retirement age, and DA = the age at which I want my savings to run out. Choosing DA is tricky. If you decide to have enough until you are 85, you are taking on real risk that you’ll be digging for food in a dumpster at age 86, should you live that long. If you decide to have enough until you are 100, you are taking on a lot less risk of outliving your assets, but you are going to have to retire later.

Which assets do I include? I need to be able to liquidate them over time without affecting my standard of living. So I don’t include any home I live in.

I don’t count future investment returns. Any investment return needs to be reduced for expenses, taxes, and inflation. Staying ahead of all those by a healthy margin would require taking on a healthy dose of risk, with a much higher probability of premature dumpster-diving should the risks not pan out.

[Eugene]

[quote]I’m in my mid-30s now and I think I have about 600k (including everything cash or asset). Am I on track? Am I behind? I don’t really get a chance to talk about this with friends because we usually don’t get too involved in this subject.[/quote]

You’re doing a lot better than most Americans. Fewer than 10% (possibly as few as 2-3%) of people your age have 600k in assets. In 2004, median net worth of a 40-year-old was around $60,000, and that’s including home equity.

[Eugene]

[quote]I’m in my mid-30s now and I think I have about 600k (including everything cash or asset). Am I on track? Am I behind? I don’t really get a chance to talk about this with friends because we usually don’t get too involved in this subject.[/quote]

You’re doing a lot better than most Americans. Fewer than 10% (possibly as few as 2-3%) of people your age have 600k in assets. In 2004, median net worth of a 40-year-old was around $60,000, and that’s including home equity.

[Eugene]

[quote]I’m in my mid-30s now and I think I have about 600k (including everything cash or asset). Am I on track? Am I behind? I don’t really get a chance to talk about this with friends because we usually don’t get too involved in this subject.[/quote]

You’re doing a lot better than most Americans. Fewer than 10% (possibly as few as 2-3%) of people your age have 600k in assets. In 2004, median net worth of a 40-year-old was around $60,000, and that’s including home equity.

[Eugene]

[quote]I’m in my mid-30s now and I think I have about 600k (including everything cash or asset). Am I on track? Am I behind? I don’t really get a chance to talk about this with friends because we usually don’t get too involved in this subject.[/quote]

You’re doing a lot better than most Americans. Fewer than 10% (possibly as few as 2-3%) of people your age have 600k in assets. In 2004, median net worth of a 40-year-old was around $60,000, and that’s including home equity.

[Author]

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