One thing I want to do this year is make sure our saving/investments are on track for us to retire eventually. I haven't read any of the financial books that people talk about on here. We are frugal with our money (at least compared to the rest of my family), we do have a lot in savings, investments, 401K, IRAs, etc., but what are we aiming for? Is there a "magic number" that they say we should have by age 65 if we want to be retired for, oh, 20 years? How much is that we need to save up? A million?

Great question!

I used this for our goal. There is no magic number. It's different for everyone but the earlier you start, the easier it will be. Play around with the calculator and watch what happens if you had started at 20. Oh to go back and talk to my 20 yr old self! (We didn't start until our early 30s ... a big regret now).

What you need to save - Calculator - CNNMoney

This one is really good too.
Calculators - Retirement Planner

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i'm interested as well to find out.
i can't possibly save the 15% they say you should bc i'm a single parent w/1 income.
but the closer i can get to the "magic" # the better.
*maybe my son will be a doctor or lawyer, and will take care of my retirement....???? jk

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Bestmommysaver!

It really depends on so many things. I just did a retirement calculator last week at my bank to find out if we are on track or not and here are some of the questions they asked. How long do you plan on living off the retirement money (we did ours to age 95 as the women in my family tend to live for a long time)? When do you plan to retire? What are your ages now? What is your current savings rate, and what kind of returns are you getting on your money so far? What amounts do you have for retirement now? What is your current income? What do you plan on doing in retirement (are you going to be spending large amounts of money on travel, or be more of a homebody?)? We also chose not to factor in Social Security at all into the equation because we really don't know the state it will be in when we retire.

As far as the "magic number" is concerned, it is totally different for everybody and every situation so you really need more to go on than an educated guess. I really think you will be surprised at how much you will need to keep up with inflation.

I would talk to your fund manager for your retirement accounts or a financial advisor at your bank and they will either sit down with you or do a calculator with you over the phone.

The great thing about compound interest is that you only have to contribute a portion of the magic number over time and it will grow. Get started as early as possible and watch the compounding work for you.

Gosh, wouldn't we all like to know. The only good answer is, as much as you can accumulate in as many different forms as possible.

I am older than most of you, so I have seen the economy go up and down. That does a number on much of your planning and expectations. Even worse is that the government changes the rules regularly regarding tax treatment, social security expectations and they devalue our money often. Moving targets are hard to hit.

My recommendation is to evaluate your current security needs often. Things like skills,no debt, positive net worth and hard assets, give you good current security. After that, accumulate accounts that you will hope be there in the future. Tax preferred like IRAs and 401ks accumulate faster, but spread them among different kinds of accounts (remember Enron).

And finally, remember to build strong networks of support. Strange things can happen that you cannot predict. Family, friends, mutual benefit societies are far more likely to secure your future than accounts with values that can be washed away in a crisis.

Cathleen

Well, a million isn't that much anymore (well it is to us but according to finance gurus), I believe they say to shoot for 3 million. Anyway, that's our goal- 3 million by the time my dh is 60. (We are in our 20s now so it's doable)

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Crap. See, I'm a liberal arts/creative type, and anything having to do with numbers/math just makes my brain shut down. It's not like I didn't take higher/advanced math in school - I did. I just hate it so much that my mind....stops. I'm having lunch today w/ my brother, and he's stepping in to be our financial planner (he's been a corporate attorney for 30 years and does a lot of financial planning for himself & my dad, and they are both millionaires). So, he knows what he's doing & he's willing to guide me w/o charging me. I've pulled together our savings statements, CDs, investment fund info, Roth IRAs, my 401K info, and my mortgage info. I think it looks like we have a lot saved (we are 44 & 47)...but who knows what the future will bring? Medical issues? Job losses (we're in Michigan - single state recession)....Rich's folks died & 42 & 72. My mom died at 74 (but her siblings lived into their 90s) and my dad is still around at 82 (but he is by far the longest lived in his family). I just hate not KNOWING what to plan for...

Okay I cannot push this book enough Saving for Retirement (without living like a pauper or winning the lottery) by Gail MarksJarvis. Once you read it you will understand. As for a magic number, well the most basic would be at what age do you want to retire? Figure up how much you live on per year now times how many years you plan on living off of a retirement fund. That won't include any age related medical expenses and is a pretty bare boned retirement.
When you realize how little people save for retirement now its truly frightening! I recently read that saving for retirement has hit a record low of only 66% of people contributing to their 401K let alone personal savings! The retirement that people envision is not going to happen for most. Saving is not the master plan, you need to invest and let compounding interest work for you, not against. Just as an example if I invest $8000 today into an IRA, and never make another contribution when I am 65 it will be worth $1,031,700 just from compounding interest. I work as an extra in a hospital and I cannot tell you how many 75-80 year olds that come in and are still working. Truly sad!

OMG!! I plugged in some #s.... I NEED to start saving.... sheesh! What am i thinking??! Why have i been working for YEARS and not contributing to my 401k??! UGH! (Okay... go ahead... scold me. I deserve it)

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