I was discussing retirement with a group of people on a project. All were working for a large company except me. All people were married and between 37 and 62 (mid-level Engineers to Executives were in the discussion). I was amazed how many people were going to retire with less than $100k in assets. One guy had a $450k mortgage, a $60k car loan on a corvette and two car leases plus a pile of credit card debt and a student loan for one of his kids and his wife has student loan debt from an unfinished law degree. He is 60. He has a plan to get his debt down enough to have about $100k of net assets by the time he is 70. His company "froze" his pension 15 years ago so it is not worth much - most of his retirement is in his 401k but that doesn't even cover his debt today. That guy didn't exactly offer the info on his own but a lot of coworkers kept offering details about his unfortunate financial situation that he clarified or admitted to during the conversation.

Net Worth = Total Assets - Total Debt

Comment if you want. I'm frankly amazed how many people are retiring with less than $100k of assets.

 

It is nice to have your money working harder than you ever did in your prime.
EDIT: I've been retired for 7 years, but my answer reflects feeling comfortable pulling the trigger at the time.

 

I was discussing retirement with a group of people on a project. All were working for a large company except me. All people were married and between 37 and 62 (mid-level Engineers to Executives were in the discussion). I was amazed how many people were going to retire with less than $100k in assets. One guy had a $450k mortgage, a $60k car loan on a corvette and two car leases plus a pile of credit card debt and a student loan for one of his kids and his wife has student loan debt from an unfinished law degree. He is 60. He has a plan to get his debt down enough to have about $100k of net assets by the time he is 70. His company "froze" his pension 15 years ago so it is not worth much - most of his retirement is in his 401k but that doesn't even cover his debt today. That guy didn't exactly offer the info on his own but a lot of coworkers kept offering details about his unfortunate financial situation that he clarified or admitted to during the conversation.

Net Worth = Total Assets - Total Debt

Comment if you want. I'm frankly amazed how many people are retiring with less than $100k of assets.

For me, it's not (entirely) about assets, but about income. I would never retire unless I had a guaranteed income of at least $7K per month.

But maybe my opinion is moot ... because I'm 57 and I plan to NEVER ever ever never retire ... I will lower the pace eventually, though. But my plan is to die standing on my feet while doing something useful for those around me, God willing.

 

I voted $5M+ because, by the time I reach retirement age, $5M might not even cover my groceries for the remaining years. I say "by the time I reach retirement age" instead of "by the time I retire," because unless I'm a totally different person in 35 years, I probably never will retire. I save, not for the long holiday after the finish line, but in case my health declines so far that I can't reach it.

 

For me, it's not (entirely) about assets, but about income. I would never retire unless I had a guaranteed income of at least $7K per month.

But maybe my opinion is moot ... because I'm 57 and I plan to NEVER ever ever never retire ... I will lower the pace eventually, though. But my plan is to die standing on my feet while doing something useful for those around me, God willing.

Doing something because you want to, when you want to, how you want to is retirement by my definition. Whether it is related to your career or not, related to payment or not. "Working" because you have not amassed enough to get you to the end of the bus route if don't (can't) work anymore is NOT retirement.

 

Doing something because you want to, when you want to, how you want to is retirement by my definition. Whether it is related to your career or not, related to payment or not. "Working" because you have not amassed enough to get you to the end of the bus route if don't (can't) work anymore is NOT retirement.

Agreed ... geez ... now that I think of it, I've been retired ever since I graduated from college!

 

£300,000 in pensions and a paid-off house worth about the same and I can afford to retire at 57. Having healthcare provided free by the government makes a big difference.
My suspicion is that energy will get expensive, so I am currently installing enough solar panels to cover our electricity requirements, and working (in a way that fits @MrSalts 's definition of retirement) a couple more years to buy an electric car.
Why have most car manufactures taken the opportunity of going electric to introduce ugliness into their designs in a big way?

 

Definitely put me in the it's all about income category, along with being a somewhat frugal spender. No big vacations, expensive cars, mortgages, or extravagant luxuries. We did like to eat out occasionally at nice restaurants before Covid hit. Since retiring we have eliminated our daily drivers for a Honda Odessey, so the gas, tires, and maintenance bills went down quite a bit. We both have retirement income and investment income along with SSI. I had a 401K at work and kept putting my annual raises into it until I maxed the 12% matching stock and it eventually went to 18% matching so I had a nice nest egg even though the matching stock was worthless. I did manage to roll the stock out to cash well before it hit bottom. I've tried to tell the kids to save but not sure if they were paying attention.

 

I’ve been retired for 6 years and my answer was the amount I considered minimum at the time. I actually had a bit more than the minimum, and it has grown since retiring. I feel very lucky that the market has done so well in those years. If I had retired in 2000 or 2007, it would have been a very different story. I will start taking Social Security next year when I turn 70.

Bob

 

Answer depends on whether you get a company pension of some sort or not. Even a mediocre pension can be worth the equivalent of $500k or more, over a typical lifespan (especially if you have a drug/health plan with it). That would affect what savings you need to top things up. Also, as pointed out earlier, if you have any debt when you retire, that adds to how much you have to save.
I look back at a book put out in the 80's (I think, maybe 70's) called "The Wealthy Barber". If you pay yourself first at 10% of everything you earn into a retirement fund, you will have lots of money after 30 years (as long as you don't invest in high risk ventures). One learns to live with what is left over after saving that 10%. Not easy, but do-able.
Not like the "new" generation that wants it all now, going into debt....
Pay yourself first!
I followed the Wealthy Barber advice and retired at age 52 after 30 years working. Single family income.
Got a company pension, and did a bit of "consulting" work for the company afterwards, which helped buy any "toys" I wanted. Not wanting for money, just comfortable (but not a millionaire either).
Also, answer depends in what country you live in. Most industrialized countries have government run health care. That removes a lot of "savings" required at retirement. If you live in the USA, better save a few millions unless you have a pension that covers some of those costs.

 

I feel very lucky that the market has done so well in those years. If I had retired in 2000 or 2007, it would have been a very different story.

@BobTPH , I really appreciate that you admit you had some luck along the way. Retiring in 2000 or 2007 would have been bad indeed. But also graduating in 1997 to 2000 or 2005 to 2008 means you would have been the low person on on the totem pole and likely the first to be laid off. Even worse, never even getting a salary job on your resume by graduating during the 2000 - 2005 downturn (especially sept 2001 to 2004) or the 2008 to 2012 downturn.

This means, an entire generation of graduates from 1997 to 2014 had a challenging time to get started (even up to 2018 or so). On top of that, this same group of students had the highest costs to get a degree vs starting salary.

Imagine the poor engineer that wasn't an "A" student at a top 25 school. Graduates from mid-tier schools or "B" students had a very tough time getting jobs. After 2 to 3 years of not working as an engineer makes it very hard for a hiring manager to pick their resume any time in the future. They may never work as an engineer. Many never have.

Not like the "new" generation that wants it all now, going into debt...

Maybe the "new" generation was suffering from the mis-handled economic conditions created by YOUR generation. See above paragraphs for reference.

Finally, the latest engineering graduates (post 2018) are some of the highest savers I've ever met -many are maxing out their 401k contributions AND funding individual Roth IRAs on entry-level salaries. How long since actually discussed money with someone from the "new" generation?

 

I was discussing retirement with a group of people

Had any of these people made a budget to see if the amounts they thought they needed would actually provide the income they'd need in retirement? 4% of $100k per year isn't much to live on. If they've never had to budget before, they might be in for a rude surprise.

How were their retirement assets invested? If they're planning to spend decades in retirement (longer if their spouse is significantly younger), they have to have part of their funds in investments that will outpace inflation, but not so much that they'll need those funds to live on during market downturns. Did they have pensions to supplement retirement accounts and Social Security benefits? Do their spouses have assets? Do they have funds that they didn't include in their planning as a contingency fund?

I started running calculations on Fidelity more than 15 years before I retired. The numbers never worked out until I realized that I was over estimating the amount of taxes I'd be paying. I didn't realize that until I really had to get into the weeds to see if I could retire because injuries from an accident made it necessary for me to do it several years earlier than I had planned. I hadn't even started taking advantage of catch-up contributions to my 401(k).

 

Learning to manage investments to avoid having to pay fees started in 1976 when I opened my IRA. It was a good use of my spare time while I was working. I didn't get really serious about it till the online brokers showed up in the mid 1990's. Commissions went from $29.95 to zero in just over two decades and now with trading practically frictionless my money works harder than I ever did. I've also never spent a nickel on "financial advisors".

 

How were their retirement assets invested? If they're planning to spend decades in retirement (longer if their spouse is significantly younger), they have to have part of their funds in investments that will outpace inflation, but not so much that they'll need those funds to live on during market downturns. Did they have pensions to supplement retirement accounts and Social Security benefits? Do their spouses have assets? Do they have funds that they didn't include in their planning as a contingency fund?

First, most of your questions are part of the net present value calculation of a family's Net Worth so I don't understand how they are necessary.
Second, I'm not anyone's financial advisor so I don't really care about their details.
Third, can you think of any reasonable answers to your remaining questions that would make retirement on $100k of net worth a good decision? And do you really have to ask if some of those people had a budget if they are finishing a career with less than one-year's pay as their net worth?

 

First, most of your questions are part of the net present value calculation of a family's Net Worth so I don't understand how they are necessary.
Second, I'm not anyone's financial advisor so I don't really care about their details.
Third, can you think of any reasonable answers to your remaining questions that would make retirement on $100k of net worth a good decision? And do you really have to ask if some of those people had a budget if they are finishing a career with less than one-year's pay as their net worth?

If they are just getting around to having this conversation as they approach retirement then all these questions are rhetorical and largely irrelevant. They do not have a sufficient time horizon to do anything meaninful. Of course anything they do decide to do is better than nothing, especially if they can (in the US) put off retirement until they reach their FRA (Full Retirement Age). I've had a total of 39 years to manage the runup to retirement and it seems to me that is was barely enough. I wish I could go back and capture the 7 years I missed from graduation to getting my head out of the dark place it was inhabiting back then.

P.S. I could have bought Intel when it went public in October of 1971 for $0.02/share, a price adjusted for 13 subsequent stock splits, if my head had not been in that dark place.

 

First, most of your questions are part of the net present value calculation of a family's Net Worth so I don't understand how they are necessary.

Your net worth at the time of retirement has a huge impact on the viability of retirement.

Second, I'm not anyone's financial advisor so I don't really care about their details.

Then trying to have a meaningful conversation with you would be a waste of their time.

Third, can you think of any reasonable answers to your remaining questions that would make retirement on $100k of net worth a good decision?

No.

 

$100k at retirement?

Well, lets say i am 65, relatively healthy, i live in Canada and have no debts. I will have pension from my work that will be more than enough as I have no mortgage. $100k is more than enough.

 

Then trying to have a meaningful conversation with you would be a waste of their time.

I was just a consultant watching the employees at my client's location discuss amongst themselves while we waited for a meeting to start - there was an "IT issue" that delayed the meeting. The CEO wanted an estimate of when his employees would retire so he could do succession planning but he didn't want to violate any age discrimination laws. While we waited for the meeting of bored engineers to start, I asked how they were all doing with the stock market surge over the past two years. I never asked another question - we learned enough to be concerned about two key engineers. Then I suggested the router might have been unplugged so we didn't have to wait for IT to come down.

 

I've tried to tell the kids to save but not sure if they were paying attention.

Not like the "new" generation that wants it all now, going into debt....

Maybe the "new" generation was suffering from the mis-handled economic conditions created by YOUR generation. See above paragraphs for reference.
[...] How long since actually discussed money with someone from the "new" generation?

I've never once uttered the words "ok, boomer" but in the context of this discussion, I understand why some would. It is hard to stomach being lectured on how simple and easy it is to save money and avoid debt, by someone whose wealth management advice is informed by a life lived during the most prosperous time in the most prosperous country in history.

It is not so simple for the "new" generation. We inherited a much different economic reality than you did. It's not that we aren't listening, it's that the advice is obsolete and we're mostly incapable of applying it to the current situation.

Economically speaking:


I can't really point fingers and call any generation "weak men" while members of my own generation are running around in floral patterned onesies, but I think the strong generation is obvious (if not, I refer to the Greatest Generation). I'm having a harder time than my parents, and I think my kids will have a harder time than me.

Yes, go ahead and say it, I know, not everyone got go to an air conditioned school and there were no safe spaces. I don't deny the social and technological advancements made by your Generation. I can have things now for very cheap that used to be very expensive (computers, A/C, etc.). My life is surely easier in many ways. But that's not what I'm talking about. I'm talking about the important things; housing, health care, education, etc. All these things cost much more than they used to (inflation adjusted) and there aren't a whole lot of viable avenues for people to get them that does not involve incurring a relatively "irresponsible" amount of debt.

 

now that I think of it, I've been retired ever since I graduated from college!

Just so there is no language barrier, when I said, "...you have not amassed enough to get you to the end of the bus route" means 'enough money until you are dead'. So did you really have a large enough net worth when you graduated from college that you didn't need to work another day?