Wednesday, July 29, 2009

Retirement plans

I am a great believer in planning. Life doesn't always go the way I plan I find that having a plan and goals helps keep me from just wandering around aimlessly wondering what's coming next.
So with retirement coming in 4 years, I wanted to know if my planning and saving was going to be enough.
First I made an estimated budget for a year of retirement living. This was not hard because I just took my usual monthly budget, made a few adjustments, and multiplied it by 12 for a yearly estimate. There are 3 major unknowns--what taxes will be at that time, what health expenses will be, and what the rate of inflation will be--but I made guesstimates and went on. We can live quite comfortably on $60,000 per year allowing one large travel expense and a generous entertainment expense.
The plan is for both of us to work until age 66 when we will draw our full Social Security--$23,000/year for me and $26,000 for JMM. If we withdraw 3% per year from our current 401K accounts, that will bring in $15,000 per year.
So the answer to my question is Yes, our retirement planning and saving looks like enough. Now if life will just conform to my plans...

Thought for the day:

Character may be manifested in the great moments, but it is made in the small ones. Phillips Brooks

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