• Question
  • Retirement money

    Asked by someone from Union City, CA on 1/28/2013

    My husband and I are both 48 this year. We have $62,000 401K between the two of us.
    How much retirement money we needed if we both need to retire at 65? I am putting 16% of my $60,000 and my husband's company does not have sponsored-401k so we put $400/mo to ROTH IRA which started last year.

    Thank you.
    Jocelyn

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  • Categories: Retirement Planning, Retirement Assets and Savings, How Much Do I Need?, Social Security

Answers

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  • Hi Jocelyn,

    This is a great question. When I do income planning for clients, which can be done at any age, I take into consideration their Social Security, pensions, pre-tax retirement accounts, post-tax retirement accounts and any after-tax accounts earmarked for retirement. To determine if a couple is saving enough, I need to know what type of gross income they want in today's dollars. I factor inflation and a reasonable rate of return on their investments. I take all that information and plug it into a spreadsheet I wrote, run a few alternate scenarios and with that I am able to determine, with reasonable accuracy, where they will be at retirement.

    With a bit more information I could give you an idea of where you will be based on what you are doing.

    Thanks,

    Steve


  • Login to rate this answer:   Answered on 1/28/2013
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  • It makes sense to look at the calculator on www.newretirement.com. The internet also offers varies other websites that could help (i.e. fidelity.com).
    Congratulations on the first step, saving!

    Greg Britton

  • Login to rate this answer:   Answered on 1/29/2013
  • Editorial 

    Editorial 
    NewRetirement

    San Francisco, CA

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  • Congratulations for thinking about a retirement plan when you are still young enough to really create a secure future for yourselves!

    The answer to how much is adequate for retirement is really dependent on two important factors:
    1) How much guaranteed retirement income will you have (how much you will receive from Social Security, pensions and/or lifetime annuities)
    2) What will your retirement expenses be... Some people can retire with very little in assets because they live a very very modest life... Others require literally millions of dollars in savings to support themselves in retirement. Your location, house style and lifestyle will impact your retirement expenses.

    Investment returns, home equity, your health, supplemental health insurance to cover out of pocket expenses like long term care, inflation rates and other factors will also impact the answer to this question.

    A good way for you to get a personalized answer to this question about how much you need for retirement is to use the NewRetirement Retirement Calculator.
    https://www.newretirement.com/retirement-calculator/default.aspx

    You tell the system about your income, expenses and assets and it will tell you:
    -- When you might run out of money (using both pessimistic and optimistic assumptions about inflation, investment returns, etc...)
    -- How much money you should ideally have saved
    -- How and when you might need to draw down your savings
    -- Your net worth will change between now and up to 10 years past your expected longevity
    -- Ideas for improving your overall financial situation

    You might also benefit from consulting with a financial advisor. We are happy to offer you a free telephone consultation with an advisor.
    -- Free Consultation: https://www.newretirement.com/free-retirement-consultation.aspx

    We wish you all the best!
    http://wwww.NewRetirement.com

  • Login to rate this answer:   Answered on 1/28/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.