I plan everything myself based off the 4% rule and try to keep things simple. Things change and we will need to adapt as we go, but we plan what we can for now.
Not sure where we will retire (US or Taiwan). Still have another 30 years to figure that out. Today’s goal is $60k USD per year during retirement after any taxes and excluding any retirement contributions from Taiwan 勞退 or US social security. That puts me needing $1.5M in today’s dollars and a total of $3.75M-$4M in future dollars. So far, on track.
I use a conservative 6% growth rate for investments, and my approach is simple for investing. Dollar cost averaging into the SP500 and laddering bonds with correct allocation.
No one NEEDS this much money. It’s an arbitrary amount really. Far more important is knowing who you are and what you want out of your life. Then, you may NEED far less or way more.
$60k per year in the U.S. would be acceptable for retirement. Need to plan for the worst case. I give myself lots of margin of safety in case something happens. I don’t like to be unprepared.
Each person needs to figure out what’s acceptable for them based on how they want to live during retirement.
Since I retired relatively early, many people in Taiwan asked my advice. I find most interesting that almost no one who asked my advice could tell me the amount of their annual expenses. Without that basic knowledge there is no way to plan ahead with regards to how much money you need. For someone like me without children and a good idea of how much money I will spend on major expenses like a house and car…much easier to predict spending habits. The biggest variable would be health related expenses.
I predict my wife will need to start digging into savings around 70 years old (I will be gone before then)…meaning investment income will not cover expenses. But all of my planning is based on a myriad of assumptions and just downright guesses.
Yes. Now is twelve years on investment income…except for a small freelancing job which has stopped…but now am taking U.S. social security retirement pay since two years ago. Since I contributed so little into Social Security I may have the lowest Social Security check ever issued. I was just at the minimum level of periods to qualify for Social Security.
The downside of my investment focus on income versus growth is that I do not enjoy high growth in investment assets during the good times. I only invest in CDs, bonds, Treasuries, REITs, and dividend funds. Very conservative.
How does your estimation of retirement expenses from 30 years ago compare to your actual yearly retirement spending today? What were your some things that you didn’t account for that you should have a long time ago when you were planning out your retirement?
I think estimating what your spending will be is one of the hardest things when your really far away from it.
I agree. I can’t see how one could accurately forecast without having a good idea what your expenses are. After covid I started tracking my expenses. I categorize my expenses into three main groups:
Essential Expenses: These are my basic, non-negotiable costs, like housing, food, utilities, and healthcare.
Discretionary Expenses: These are optional or lifestyle-related expenses, such as dining out, travel, and hobbies.
Major or Time-Limited Expenses: These are larger or short-term costs that I can predict, such as college expenses for the kids, which will last for a set number of years.
I don’t really budget very strictly but I use software to track my spending.
I also agree. Overall, I tend to be conservative in my planning for retirement. The one thing I didn’t plan well for was saving for long term care expenses. I’m not sure how much it costs in Taiwan but in the USA it’s ridiculously expensive.
I prefer the stock market as it just seems more passive to me.
I was looking at real estate in Taiwan and I just can’t seem to make the numbers work for me. It just doesn’t seem to be worth it based on the rental income. What return % do you feel is adequate for you?
Why do you anticipate investment income not covering expenses for 1 in the future when it sounds like it covers it for 2 now? Do you anticipate your investments growing slower than inflation?
Why would you sink money into rental property when you think it’s easy to get 100%/yr returns in the market and easy to turn a thousand i.to a billion?
