new2bogle wrote:How are people coming up with these numbers? 90K? 120k? Even $180k???
What kinds of savings rate does one need to take $100k/year in retirement? It seems unattainable without a two income high earning (physician level +) people.
My wife and I have always lived well below our means, saving a large percentage of our incomes each year. For example, I purchased a new compact car for cash in 1995 and it remains the only car our family has had for all those years. I'd like to keep it until after I retire. We shop at Costco and clip coupons. While we live in a big house, we don't have lots of stuff. Before we purchase anything we ask: Do we need
this? If the answer is "no," we usually don't purchase it.
We live on my salary and we save 90 percent of my wife's. We contribute the maximum to our respective Roth 401(k) plans and to our Roth IRAs each year. For 25+ years, we've invested almost exclusively in domestic and internatonal low-expense equity mutual index funds (no bonds). We also own shares in a REIT fund and in a commodities fund. We've experienced some large swings in portfolio value but the overall result has been extraordinary gains. We have never
panicked when our portfolio dropped. I will have a pension from my work. We have some rental income. We save like fiends.
If things progress as I expect, I figure that by the time I'm 70 years old and begin to collect Social Security, we'll be able to spend (including charitable giving) about $200,000 per year in today's dollars. Much of our spending will be from Roth accounts and not subject to federal or state income taxes. If I've miscalculated and we have only half that much, we should be fine.
Slow and steady wins the race.