Sure, but if looking a a total figure, try getting a reliable lump sum equivalent if you are lucky enough to have a pension!
^^The pension one is hard to figure out, because how do you realistically decide how to value it. Nothing is guaranteed as far as pensions go, they could always disappear. And unlike having a chunk of money, they disappear when you die (or your survivor does, if you choose survivor benefits).
I have always looked at the Fidelity, Vanguard, etc. calculators the same way I do Valvoline’s recommendations for changing my oil (every 150 feet). They sell oil so what would you expect them to say?
That being said, if the numbers you see in terms of average retirement savings (or lack thereof) are true, I think we will have something a retirement crisis moving forward. Will be difficult to live on just social security (particularly if there are benefit cuts as SS fund becomes insolvent) but large numbers of people will have no choice with little/no retirement savings. Pensions (which become economically problematic with increased life expectancies) have been replaced with 401(k)/IRAs but from everything you read, far too few people participate. And many existing private pension plans have solvency issues. Some government pensions do as well though states can’t go bankrupt (at least not under current law) so non-municipal government pensions are safe (though at some point, I would expect those to be frozen – people moved to 401(k)/IRA models).
For a lot of people, I suspect the retirement calculators produce very daunting figures. It appears to be impossible and thus many people don’t even try. Big mistake no doubt but I am pretty sure it happens for a lot of people.
As soon as my kids had earned income I created Roth IRAs for them. With about 50 years to grow, that should give them a good start.
“They sell oil so what would you expect them to say?”
Or it could be because they know what they are doing and in the face of uncertain/hard to project assumptions, much better to over prepare than under prepare. The downside to not saving enough is pretty ugly.
Yes, the outlook isn’t rosy for many Americans. I sure don’t want to be one of them. I’d rather risk leaving some assets to my future generations than be a burden to them.
I find these projections so tough, but agree that one should start with today’s expenses, remove those you won’t pay later (expenses related to college, for example, but also for those of us who don’t work for big companies, health insurance post Medicaid) and add those you might pay more of (travel for some though I don’t know that I could travel any more than I do, medical expenses not covered by Medicaid, LT care). Plus anything else you might expect to pay for – kids’ weddings, 529 contributions for grandkids when they materialize, etc.
In one thread, someone mentioned three stages of retirement (or in my case, non-retirement):
go-go (adventure travel when couple is healthy): Expense levels same as before except maybe medical
slow-go (spend time with grandkids but travel otherwise is limited): Expense levels 20% to 30% lower.
no-go (when physical health impedes most things, I guess).
I remember when it was 7x… now it’s 10x. Hmmm… is that because interest rates are so much lower now, or because Fidelity is trying to scare you into investing more money with them?
I agree, the income-based number is dumb. I think that putting out an unrealistic number may actually discourage people from saving.
I would guess part of the move from 7x to 10x is lower expected returns (look at rates of return on “safe” investments for the past decade) and healthcare costs that are greatly exceeding inflation. I’ve seen these two things mentioned many times in investment articles. I doubt it is some nefarious plot to get your money. Having realistic investment goals can be win/win for you and your financial service provider. 
I also think healthcare costs can make those no-go years pricey. So, you may not be traveling but you could have large costs related to your care.
Thats how I feel about those height/weight charts. Just because I will never run a 4 minute mile is no reason to be discouraged from walking a few miles.
I do something similar in my spreadsheet. Take current spend, and then adjust for 3 rough levels of retirement:
austere, comfortable, living large, with different amounts plus or minus current spend.
@busdriver11, Having worked with pension plans, I know how easy it is to finagle the interest rates, investment return projections and mortality so that the lump sum can vary wildly. Used to do those calcs regularly. The plan defines what those rates are, but employers can change them if they want to adjust (up or down) how much they are contributing to the plan.
Advice for the day: don’t take a lump sum from a traditional pension plan and then go buy an annuity. You would never be able to purchase an annuity that generated you the same kind of monthly income as your pension plan would have provided. My former boss made 14% commissions on annuity purchases.
Yikes, 14 percent? I would never buy an annuity, I’d invest it in ETFs, I think.
I think @saillakeerie has an excellent point, but I’m not sure how to model it and/or prepare for it. I just keep trying to save as much as I can, but if 50% of baby boomers have less than 20K saved for retirement it is going to hurt us all.
(Median retirement savings for age 50-55 is 8K; age 55-60 is 17K)
Lower growth -> lower stock market -> lower interest rates -> higher income inequality etc. is not a recipe for steady retirement savings growth. Does this lead to a long recession/depression when the boomers have no money to spend?
There is no reward for successfully predicting disaster, though. I just keep trying to max out my 401K and put it in 70 / 30 stocks/bonds and REIT. Might be time to adjust to 65/35.
We went out on a drive today to see the tulips in Mt Vernon and La Connor (small towns in northern Washington state). I saw all these lovely older homes, with attractive gardens, smallish houses, relatively inexpensive, and thought hmm…I could live here. Life would be so much cheaper, uncomplicated. It’s hard to even consider leaving your home in the future to downscale, if you are somewhere that you’re happy. My husband has done so much work here (and huge works in progress), I don’t know how he’d give it up. But…if it got too expensive and complicated, why not? I think people sometimes just get tied into staying where they are. Maybe it’s not so important, though (in 20 years!).
@busdriver11, our Plan B has always been to move to either a place that was a lot less expensive (but that I liked), possibly in Canada where ShawWife hails from (and would be happy to return to). Nice house in a nice place. There are plenty of really nice places in the country. The expensive ones often have a much more vibrant economy. But, my work is global and not tied to any local economy so I could cut costs without changing what I do.
One tradeoff in some of the places I like (e.g., New Mexico, Victoria BC) could be availability of high quality health care. I’m spoiled with Boston and San Francisco. Many, like Western Massachusetts, suffer from distance to a real airport.
(Median retirement savings for age 50-55 is 8K; age 55-60 is 17K) - WOW, that won’t go very far…
I suspect many of our recent CConfidential college grads may thankfully have a bigger savings ir emergency funds than that. It would be a most emergency fund for someone 50-60, definitely not a comfortable retirement fund.
^ well, if your house is paid off (or your rent is moderate) and you can live on SS and pensions, it’s a pretty good Emergency Fund. I’m not recommending it, but I’ve known people who couldn’t scrape $1k together for emergency car repairs.
You can’t start SS at 50 or even 60, unless you’re disabled. That money won’t he’ll you get to ages 50 or 60.
I hear this stuff andit just makes me sad. I believe it to be true, because some of my relatives, one generation ahead, are in pretty dire straits. My mom lives with a sister, and on social security and nothing but. She put her “life savings” into a beautiful home in Florida (despite my advice), and they wound up having to short-sell it when the market crashed, and there went all that equity. The sister she lives with owns a company, but doesn’t make much, and doesn’t have much saved. A couple of uncles are similar.
I know people of my generation who didn’t contribute to their retirement fund, even when employer matched every dollar they contributed. Lots of people are not good with deferred gratification.
My mother, had I not ponied up a modest monthly amount (this was years ago, when I didn’t have so much myself), would have had to choose between food and medicine. Beyond SS, she had very little. Though they were divorced for a long time, my Dad gave her some money, which she frittered away. Managing money was something she was not good at, so I was sure to give her money in measured amounts.