Now I’m really worried about not having enough in retirement!
@Counting down
I think the most recent posters , while great contributors, are not exactly typical.
ETA to add comma
I would say that most of CC is not very typical.
@HImom , yes!
If we would consider moving out of this area, our money would go much further. College also ate a lot of $$, but that was our choice.
Yes, well, I picked that in a fit of pique when I joined CC 8 years ago after my oldest kid’s college acceptances started rolling in, and discovered that we were in that “sweet spot” where we weren’t going to get need-based aid but being full-pay at a private for two kids would either bankrupt us or leave us will debt bigger than our mortgage. It was in the middle of the housing crash, so pretty much all my rentals were under water, so there was no help to be had there.
So I was feeling somewhat sorry for myself. It’s hard when your kid works his a** off to get into top-20 schools, only to be told he can’t go because we’re ahem not rich enough, and we’re not letting either him or us borrow the money. I’m not proud of my username, but it is what it is.
It all worked out, he loved his school, met his future wife there, and came out with no student loans and a job. 
^^Now that is a classic great cc story!
IDK if we recently jumped in credit score from 766 (which has been about our number for years) to 840/841. We just turned 60; I just got part time work; we are 4 years from paying off our home with low interest rate (2.5%). We have no car loans, pay off credit cards every month.
We were glad to get the last year of DD1’s education tax credits/opportunity credit, and claiming her as a deduction. W/O her, we would have been ‘break even’ on federal taxes. Now we get over $3K back from that and long term capital loss carryover. I still have a few more years of carryover $3K long term capital loss from Parents’ trust (the sale of 10 Unit and 6 Unit apartments and their home was at a loss - we had one buyer for the apts and one buyer for the house, and were are happy to close the trust).
Getting some financials together for our appt with our financial guy Don. We are on a good path towards retirement.
http://www.cnbc.com/2017/01/19/why-this-index-works-better-than-the-4-percent-rule-for-retirees.html
Fidelity says at age 67 of ‘full retirement age’ is have 10X your last salary put away in retirement savings. So you can afford 20+ years in retirement.
I know our kids will have $$ saved for retirement starting early because we have taught them well! Small amounts early can really have the time work in the compounding of the money.
Is that 10x in addition to Social Security?
I don’t know that I agree with these formulaic one size fits all solutions. In our case, our salary has gotten a lot higher over the last few years and the extra has gone to savings and taxes, but according to this formula, the higher salary means we need more in savings by retirement age (though we aren’t spending the extra). Yet if we had a lower salary now, we need a smaller amount of savings?
I know everybody wants an easy answer, but I don’t think it’s out there.
DW’s income keeps going up. We will never be at “10x last salary put away in retirement savings,” because Fidelity keeps moving the goal posts. Woe is me. Here I was feeling like we were set, but now a financial institution tells me that we’re failures and need ever increasing amounts in our retirement accounts.
I know that it’s easier than figuring out what you need, but the “multiple of last income” has only one saving grace: it’s easy to compute.
On the bright side, the calculation of something much more useful isn’t that hard. Figure out your net annual need (expenses less SS and pensions). 25x that (for 4% drawdown) or, my preference, 40x that (for 2.5% drawdown). It is probably close enough and took just a few minutes more than the silly income-based calculation.
Note that financial institutions have a vested interest in your “number” increasing every year. You don’t. You just want to know what’s enough.
ETA: I was typing when @busdriver11 posted. +1
I do think being careful the first few years of retirement is helpful - one will want to travel and do a lot of stuff when one still can physically, but you also don’t want to have too high of a lifestyle either and worry about money later.
Can someone tell me more about low-cost index funds and “passive investing recommended by Warren Buffet” from link above?
Having a multiple of your spending, not a multiple of your income, is a better measurement. And your spending in retirement will include whatever income taxes you have to pay. Of course, the figure is offset by the amount of your spending that will be covered by pensions and social security.
I like FIRECalc to model much of this, but I still have to fudge the numbers to take into account taxes.
Well low cost index funds and ETFs are actually related but different. I think funds are more straight forward.
Here’s some reading:
http://www.investopedia.com/articles/mutualfund/05/etfindexfund.asp
https://www.fidelity.com/viewpoints/investing-ideas/how-to-shop-smart
http://time.com/money/3938695/index-exchange-traded-funds-mutual-fund-difference/
The key is that they represent the broad market as opposed to active selection by a portfolio manager or team and they benefit from lower expense ratios and fees.
I don’t know how you actually guess an accurate inflation number for these calculators. And even if inflation goes up significantly, as a retiree, perhaps it will not affect you that much. If you aren’t buying much except for groceries anymore and your mortgage is paid off, your expenses may not go up at the same rate as inflation. Maybe people will get rid of some cars or expensive habits, too. I can see people traveling a lot initially after they retire, but it won’t be the same when they are 90 (probably).
I think the reason why companies like Fidelity come up with their little, back of the envelope formulas is because 1) most people don’t save enough, 2) they are easy to remember and calculate and 3) it is tough factoring in all the inputs for a more sophisticated process such as what is inflation going to be, or my return, or my spending habits and healthcare costs?
Having a simple rule will hopefully encourage more people to save more money than they are doing. I don’t think it is designed to be something to hang your hat on.
@doschicos - that is what I was about to say. Kind of like a BMI index for retirement investors. 
Not perfect, but close enough for the 95+% of the population.