<p>As we are getting closer to the big “5” “0”, we are more and more concerned of our retirement. Being in the middle of the sandwich - have parents and children, we really don’t have much to work with.</p>
<p>I have tried several of those online calculators and the results are mixed. </p>
<p>The #1 question I have is the % of current income desirable at retirement. Most of the calculators suggest 70%. Is that reasonable? I think we could live way below that. </p>
<h1>2 is the home equity. Does it count as part of the “retirement” investment? The none interest part of the mortgage payment, could we count that in the monthly investment for retirement?</h1>
<h1>3, how do I estimate the cost of medical insurance? If Dem gets their way, everyone will be insuranced, right?</h1>
<p>As of right now, we have 401K, roth IRA, IRA, and pensions on top of SS.</p>
Keep in mind that if you’re saving now for retirement, you won’t be socking money away in the future while retired, so that “expense” goes away. Most planners suggest paying off as much debt (esp. mortgage and car loan) before retiring. Housing is likely your biggest monthly expense, if you can pay off the mortgage on a house you’ll be living during your retirement years, you may get away with living on a smaller percentage. </p>
<p>No one knows what inflation will be like during your retirement years. As a hedge, it’s best to replace as much of your pre-retirement income to pay for increased costs and unforeseeable events.</p>
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Only if you plan on:
Selling your home and moving to a cheaper home and using the equity proceeds to help fund your retirement.
You own your home outright and obtain a reverse mortgage, which will pay you a monthly income based on your home equity…keep in mind though, that it reduces home equity as payouts progress and you’ll have less assets to pass on to your kids, if that’s important to you.</p>
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This is the $64 million question. As you get older, it likely will be a larger portion of your expenses. IMO, if Dems get their way, insurance costs could decrease, but tax rates will increase…possible that more people are insured and this larger pool of insurance premium payers defray costs since it adds healthier younger people to the mix…however, it’s unclear if this will lower medical costs because when you have more people with insurance, people are more likely to use it - thus driving up demand and costs. A silver bullet solution remains to be seen.</p>
<p>The best thing to do is to buy long-term care health insurance now, if you’re healthy, and maintain an active/healthy lifestyle to better avoid future medical expenses.</p>
<p>Here’s what I did. First look at your gross pay and eliminate Soc Sec and medicare payments. Also eliminate any contributions to 401K and other post-tax savings. Then eliminate any significant work-related expenses such as commuting expenses. Also since you have a Roth, the income that you get from this will be tax free (same goes for any investments that you have outside a tax sheltered retirement account), so your income taxes will be slightly reduced. If you plan to move to a more tax-friendly area, you can also count this as a saving. Then once you have accounted for your major savings areas, I would add back in money for travel or other pursuits that will increase your outflow after retirement. I would also add in some extra for medical and possibly long term care.</p>
<p>For medical, once you reach 65 by current law (of course this can change once the politicians get serious about the looming crisis), you will be eligible for Medicare. Currently there is an automatic approx $100 per month per person deduction to provide basic coverage. This is deducted right from your SS payment and will in all likelihood increase and become heavily indexed to your income. Most people also have some form of Medigap coverage through private insurers to cover such things as deductibles and charges that Medicare does not pay. There are standard packages defined by the government that people can choose from. If you do some Googling, you can probably find a list of insurers and their rates for this in your region. Note that even within a state, this coverage can vary by a lot depending upon which part of the state in which you live. For a round number, ballpark approximation, you can probably figure about 2,000 per person.</p>
<p>We plan much like UCBchemEgrad, FF, and Notready4purple. We use the 80% and are short of the goal. Its better to have too much $ than not enough. We also have LTC insurance and plan on DS subsidizing us in our golden years in exchange that we do not live with him. We are 58 and 60, so any savings at this point will affect on our retirement only slightly. </p>
<p>I am a pessimist when it comes to retirement. My crystal ball sees The Apocalypse from US and World Debt, Climate Change, Energy, Food and Resource constraints, and political turmoil. With the ultimate insecurity manifested by Those who did not and could not prepare for the future (debt, climate change, resource scarcities) will take from others who did prepare. "“Off with Their Heads,” me and you. I see more of an internal, domestic threat than an external terrorist attack.</p>