justsomeguy2018 wrote: ↑Sun Nov 03, 2019 9:28 pm

So how should a financially savvy Boglehead look at it? I did a Google search to try and get an estimation on if we are on the right track and every article referenced a multiple of your income (which by the way can change drastically over any given time period).

An internet-savvy person shouldn't read articles on websites that a) are trying to sell you something or b) rely on ads to make money.

An intelligent person should realize that if you search long enough, you'll find 100 different opinions on everything, and that a good many of them are from people that aren't intelligent, or have ulterior motives (i.e. clickbait).

A financially-savvy person should understand that all that matters in retirement is how much you're going to spend, and that spending can easily be forecast using current spending coupled with logical reasoning coupled with a fudge factor. Figure out a year's expenses, multiply by the number of years you expect to have those expenses (less any predictable income including Social Security and/or pension), and that's how much you need.

Example:

Let's say we spend $80,000 a year today (I track everything in Quicken, so I know EXACTLY how much I spend). Let's assume mortgage payment is $20,000 of that. So I'm spending $60,000. I break that down into categories, then tweak each category. For example, maybe I spend $300 per month on medical insurance from my employer. In retirement, before Medicare, I may have to pay full boat. I look in the ACA and see that's $2,000 a month. I change my budget by $1,700 a month. And so on.

Once done, say I come up with $103,000 in expenses per year in retirement. I add $22,000 for yucks, and come up with $125,000. $125,000 x 25 years = $3,125,000. However, for 20 of those years, my wife and I will have $40,000 in guaranteed income. Subtract $800,000 and I now need $2,325,000 in retirement.

Sounds like a lot, but you have $340,000 and are putting away $60,000 a year. In 25 years, with a zero percent return, you'll have $340,000 + (25 x $60,000) = $1,840,000. Of course, returns won't be zero. You can pull up calculators that figure out what you'll have, and you can also add inflation to the budget numbers.

Tip - start tracking your expenses NOW. I've known exactly how much I spend for many decades. I knew that in 1994 when I got a decent pay increase due to changing jobs, my spending basically stopped growing, but my income did not. I put away all that excess and we're now less than 2 years from retirement.

Tip - once you figure things out, stop trying to figure things out. I am constantly amazed at people that post "what about this theory" and "what about this theory" or "I plan on taking out 2.97% a year instead of 3% a year, does that matter?". Determine what you need to do, then go do it. When you get there, stop thinking about it and enjoy life.

Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.