Wharton: How Much Money Will You Need for Retirement?

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aedelswil2429
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Wharton: How Much Money Will You Need for Retirement?

Post by aedelswil2429 »

interresting, if somewhat flat, article about the amount of money one might need in retirement:

What many people don't know, however, is the amount of money they will need to live on in their golden years.


They are talking about that one will need about the same amount during retirement as before...

To be specific, they seriously underestimate the possibility that they may outlive their assets...

...It may be a good idea for people to assume that they will need the same level of income during their retirement years that they need now


http://knowledge.wharton.upenn.edu/arti ... mepage=yes
(needs a free registration)

take care and index on

philipp
peteyperson
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Re: Wharton: How Much Money Will You Need for Retirement?

Post by peteyperson »

Hi,

Very dry. Nothing there that will inspire anyone to save more.

Also it gave no indication on what you can spend of assets per year, what return you might expect, asset allocation or a variety of other key parts of a FIRE strategy. Very poor.

Petey
aedelswil2429 wrote:interresting, if somewhat flat, article about the amount of money one might need in retirement:

What many people don't know, however, is the amount of money they will need to live on in their golden years.


They are talking about that one will need about the same amount during retirement as before...

To be specific, they seriously underestimate the possibility that they may outlive their assets...

...It may be a good idea for people to assume that they will need the same level of income during their retirement years that they need now


http://knowledge.wharton.upenn.edu/arti ... mepage=yes
(needs a free registration)

take care and index on

philipp
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ataloss
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Post by ataloss »

Merrill Lynch, for instance, recommends that people assume that they will need 70% of their pre-retirement income each year after they retire: if your annual income is $100,000 today, you should figure you will need $70,000 after retirement.


If you realy believed this, wanderer, living on 30% of preretirement income, will be in trouble when he retires :)

Perhaps he should seek a job with lower pay?
Have fun.

Ataloss
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Post by bubble »

I look at the 70% of regular salary in this manner.

You will no longer pay into FICA 8%, no local taxes on salary earnings 2% (this will vary by location of job), no more saving for FIRE 15% and the saving on taxes for above earnings @25% rate is 6% which adds up to 31%

Says nothing about the changes in personnal expenditures for living.



Bubble :D
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Post by WiseNLucky »

I look at the 70% of regular salary in this manner.

You will no longer pay into FICA 8%, no local taxes on salary earnings 2% (this will vary by location of job), no more saving for FIRE 15% and the saving on taxes for above earnings @25% rate is 6% which adds up to 31%


Interesting perspective. Doing quick math, I will be able to do away with the following percentages of my current income: retirement savings 30%, mortgage 10%, extra income taxes 10%, payroll taxes 6%, total 56%. That means I currently live on 44% (it's actually less because I put almost all of my after-tax bonus into savings -- the above figures were calculated using only my base salary).
Says nothing about the changes in personnal expenditures for living.


Right. I want to travel some when I retire and will need a little cash for recreational activities. Also, the big nut is going to be health-care costs unless something drastic happens with our US health care system in the next 15-20 years.

So, say I will need 60-70% of current base comp. If social security pays 1/3 of that, I will need about what I'm living on now to come from retirement savings.

A big portfolio assuming 4% withdrawal. A huge portfolio assuming 2%.

I guess I'll keep working for now. :cry:
WiseNLucky

I just wish everyone could step back and get less car and less house then they want, and realize they don't NEED more. -- NeuroFool
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Post by wanderer »

i appear to be unable to copy and paste (my problem, not NFB's), but it is perverse, isn't it ataloss. :wink:

a long time ago, i recall hocus writing an excellent post about the math that buuble just went through (how $25k REDs = $95k WWDs). But that was pre frying pan ("PFP"). (i'm kidding, sorta, hocus - i still love ya even though at least 10 people here are ready to lynch ya :wink:).
regards,

wanderer

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Post by TRyan »

Also if you're living off dividends the federal tax will drop significantly (from 28% to 15% for me) until of coure the law expires.
"Buy Low Sell High"
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Post by MaiPenRai »

Speaking of Wanderer: http://www.chiangmaimall.com/expats/retirement3.shtml

:D

Those are actually estimates for some good living, we've scouted some nice rental homes for closer to $300/month and out estimates for cost of living usually run around $750-$900 for the two of us.
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Post by hocus »

that was pre frying pan ("PFP"). (i'm kidding, sorta, hocus - i still love ya even though at least 10 people here are ready to lynch ya ).

OK.

Just remember--they booed Bob Dylan when he picked up an electric guitar.

Change is hard.
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Post by wanderer »

thank you, maipenrai, for turning this thread into my favorite topic. :wink:

37,500.00 THB
Thailand Baht = 912.409 USD
United States Dollars
1 THB = 0.0243309 USD 1 USD = 41.1000 THB

Let's double that to be conservative (schools will cost a bit - our kids are at prime education age but wife will likely work a year or two). That's maybe $2,000 US per month, for an absolutely fabulous lifestyle. that's a sub X% draw rate no matter how you calculate swr (validly or invalidly), plus you get cheap health care. :wink:

I hear so much good about chiang mai. We were hoping to see the RP and Thailand this year. Don't know if that's going to happen with the house building plans.
regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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Post by MaiPenRai »

wanderer wrote: I hear so much good about chiang mai.


One of the funniest things about Chiang Mai is the welcome sign at the airport. Here's a picture we took of it:




That's not quite as good as this sign we found in Bangkok:




As long as the regulations are clearly stated there shouldn't be any problems right? :wink:
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Post by [KenM] »

Those are actually estimates for some good living

......not sure about that ..... looks a bit like semi-backpacker type living to me ..... possibly idyllic for a vacation ...... but only US$6 a month on transport?????
Generally, I would reckon that most places in the world are going to cost roughly similar overall amounts for the basics for a similar lifestyle (ignoring foreign exchange fluctuations). The exceptions are income tax, healthcare , sometimes real estate and employing domestic help. It seems to me, for example that in the US automobiles, gas, good quality food, books, household goods, electrical items, basic clothing are all at very reasonable prices, particulary at Walmart etc. Not sure about utilities such as electricity, telephones etc but I doubt they are very much cheaper in Asia. So ignoring tax and healthcare, I think it probably costs about the same to live in a pleasant, small, rural town in the US as in a similar location in most of Asia if you want a similar style of living ..... you can't equate US$6 a month transport costs in Thailand with running 2 cars as you might in the US :wink:
However if someone wants to change to a simpler cheaper lifestyle, no cars, no country club, etc, then I assume it is probably more interesting and attractive to do that in Asia than in the rural US :)
KenM
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Post by MaiPenRai »

I'd have to disagree.

Housing - You can rent a nice furnished house for around $300-$400 month. We're not talking in the middle of nowhere, run-down, or in a slum... we're talking a pretty cool house. Example: http://www25.brinkster.com/cmhome/other/B002.html

That's about $365 USD for 3 bedrooms,3 bathrooms, 3 air conditioners, built-in kitchen, furnished with luxury furniture. Surely not semi-backpacker living.

Transportation - One can catch a see lor in town for 10-20 baht, they're kind of like a covered pickup that acts as a bus. We're probably just going to buy a moped like everyone else, no need for a car there. On a larger scale one can catch sleeper trains across country for cheap, and we actually caught a flight to Mae Hong Son for $17 USD each.

Eats - "Quality" food is of course a pretty open ended term, but one thing Thailand is known for is good food. You can get delicious dishes in local restaurants and plenty of fresh ingredients at markets, all for much cheaper than in the US. The obvious exception is American food, because things like cheese and bread just aren't as easily come by. We found a pizza dinner in a Chiang Mai restaurant usually ran us around $6 for two of us. Ouch. Definitely a luxury item.

Clothing - Not even close. For casual items like shorts and cotton shirts you can bargain to around 80 baht, under $2 USD. I saw a lot of tailors where you pick out material, get measured, and get a suit, jacket or dress and I didn't look at prices but I'll wager they were much cheaper than anywhere in the US, thrift shops aside.

I didn't price electronics either but there was plenty of street vendors with all kinds of crap for cheap. Heck you can even put an eye-patch on (argghh matey) and buy DVDs of movies that are just coming out in the theater in the states, or software by the bucket.

I've little doubt one can live a much cheaper lifestyle of similar quality in certain other countries. Not in Tokyo, Seoul, Hong Kong etc. but Chiang Mai? Sure. $900 for two of us would be fine.
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Post by ataloss »

A picture is worth many words.....

definitely far above the youth hostel level :)
Have fun.

Ataloss
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Post by wanderer »

only one problem with maipenrai - he doesn't post enough.

that's a sweet place.
regards,

wanderer

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Post by MaiPenRai »

Thanks wanderer but I'm not as learned in finances as everyone else here so I just kind of follow along most threads trying to keep up and understand. P/E what? Bernstein who? How many pillars? Are they doric, ionic, or corinthian?
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Post by mjlijewski »

How do you propose to stay in Thailand long-term?

It's been some years since I've been to Thailand.

My recollection is that you can't get more than a one month visa without
some special dispensation.

And it was said to be rather difficult to get visa extensions once in country.

Are you planning to hop over the border once a month?

I really liked Thailand & would be interested in knowing how to stay there long-term.

I'm a US citizen & already married so marrying a
local would be out of the question.
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Post by MaiPenRai »

Yes, that part kinda sucks.

You can do three months at a time. You can get a 60 day tourist visa then a 30 day extension, for a total three month jam. After that you have to make a visa run... in the North it's usually to Laos, in the East to Laos or Cambodia, and in the South to Malaysia. One night and back in the game.

I have no illusions of that part being fun, I suspect it would be an adventure at first, a bore second, and a major pain in the ass after a few years.

One can go for a retirement visa after a certain age:
Retirement Visa - an extension to 1 year of a Non Immigrant "O" Visa
Requirements: age 50, Bt 800,000 that must eventually be banked in Thailand, or Bt 800,000 in certifiable annual income. Renewable annually in Thailand

After 3 consecutive years one may apply for a Residency Permit.


From all I've heard this is a dicey process that relies as much on the whims of the immigration official as your application.
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Post by wanderer »

My recollection is that you can't get more than a one month visa without
some special dispensation.

I'm just getting up to speed on Thailand. Last I read it was quarterly. The RP is yearly and I am more familiar with their rules.

And it was said to be rather difficult to get visa extensions once in country.

What say you to that, mai pen rai.

I'm a US citizen & already married so marrying a
local would be out of the question.

I've barely survived one wife. No need to put myself through any additional pain. :wink:
regards,

wanderer

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Post by [KenM] »

I try and avoid the old fogey expat stuff, but I still think my description as "semi-backpacker' of the lifestyle at http://www.chiangmaimall.com/expats/retirement3.shtml is about right...... see lors/mopeds/cheap Tshirts and shorts/cheap local food. Real estate can be a reasonable price (but probably the prices quoted are 12 month minimum lease - note that "security" is emphasised - maybe that's extra? - make sure you get really good security). But the rest of it is semi-backpacker or affluent backpacker, if you like :)I've lived in SE Asia for the best part of 30 years (hence old fogey expat) and I'm not knocking the semi-backpacker lifestyle - done a lot of it myself - but after a time it gets a bit wearing travelling by the local transport - see lor, jeepney, bemo, trishaw etc depending which country you're in (travelled by bullock cart in my time). I haven't been to the US for 7 or 8 years, but I spend time in Europe and I still reckon that most countries have cheap Tshirts and shorts for $2 or $3 or so. A cheap suit in SE Asia looks like a cheap suit - probably about the same price as a ready-to-wear in the annual sale of a western chainstore - I know which one I'd prefer. Probably if you eat a cheap chicken dish in a SE Asian restaurant the chicken is frozen imported from the US - the US has an aggressive cheap food export programme. Hawker food is cheap - US70 cents for a bowl of noodles- but the ingredients are cheap - very little meat. I'm not saying that American food is expensive - what I'm saying is that if you want the sort of big lumps of meat or filleted fish that most westerners eat then it will not be cheap even if cooked asian style. Which goes back to my original point - even when you compromise and forgo expensive western stuff like cheese etc, if you want a lifestyle similar to your home country then it will cost roughly the same except for, possibly, real estate, tax and medical costs. But as I say, I'm not knocking a semi-backpacker lifestyle if that's what you like - but i doubt that for most people it would last longer than an extended vacation.
KenM
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