What's a good target for a "Retirement Number"?

[radio times]

My advice is don't retire,or do it part time. Keep a little work fire burning. I'm fortunate that I have an NHS, and my internal combustion years seem to be over. I'd keep £2-£4K pa for materialistic goodies, as blighty hi fi isn't as well built as McIntosh, and for travel, but just keep humble and do good works for the rest. I might need an electric bike mind, but they should be in general use by then. At days end, everyday is a gift. Try to go more vegetarian, abjure red meat, and do a little exercise each day.

[tdelahanty]

Originally Posted by DonBattles

We did the same and gave the same goal, so far we’re on track

Keep that train rolling toward retirement. So far we've been able to exceed our goals, you never know what may come along.

[ptman]

When planning my retirement, I used various methods such as taking a factor of current expenditures, etc... In the end, we decided we didn't want to change our lifestyle, that the way we'd lived the past three years was the way we wanted to live in the future (travel, music, hobbies, automobiles, charitable activities, etc.).

So I downloaded the past few years from my online check registers (easy to do nowadays), and took the highest rolling 12 month total, and the lowest rolling twelve month total, and factored between them. I figured this allowed me to recognize net pay, and to account for items I would no longer contribute toward, such as 401k.

I then added in items that had been subsidized or taken from my gross pay, such as healthcare (a biggie if you're less than 65 in the US) and taxes, and used that to establish a base monthly (and yearly) requirement. This then went into normal calculations using return on investment and inflation factors, how long you plan to live, and whether you plan to leave an estate after you conclude your long and full life, and that established a "number". Luckily, that seems to work, though I am fairly new to retirement.

I will say that the difference of a couple more years working when you are ready to take the retirement leap makes a big difference.

[GSOphile]

Many professionals who do this kind of planning use a Monte Carlo statistical simulation model to gage the effects of variability of key assumptions provided by you and of various uncontrollables, e.g., financial market rates of return, inflation, health care costs, your and your spouse's life spans, etc. The analysis will show the probability of your not outliving your financial resources given the inputs you have supplied. Based on the results, 'rinse and repeat' with different inputs to get comfortable with your plan.

[Masterlu]

Originally Posted by GSOphile

Many professionals who do this kind of planning use a Monte Carlo statistical simulation model to gage the effects of variability of key assumptions provided by you and of various uncontrollables, e.g., financial market rates of return, inflation, health care costs, your and your spouse's life spans, etc. The analysis will show the probability of your not outliving your financial resources given the inputs you have supplied. Based on the results, 'rinse and repeat' with different inputs to get comfortable with your plan.

Don’t forget incidental audio expenditures.

[PHC1]

As much as possible.... No matter which way you look at it.

We don't know what the inflation will be like in another 10-20 years, we don't know for sure what will happen with Social Security, everything can change and usually it is not for the better.

Social Security is the largest federal program. With costs running at about $1 trillion annually, it consumes one quarter of the federal budget. And while payroll taxes collected from current workers finance the vast majority of benefits received by today's seniors, the program is already running sizable cash-flow deficits.

In 2015, the most recent year for which data are available, Social Security's cash-flow deficit amounted to $70 billion. This deficit is the difference between what the program collects in taxes from workers and current benefit recipients, and what it is paying out in benefits to retirees and their families.

And this deficit is growing rapidly. Every day, 10,000 baby bombers retire, and every day, fewer new workers enter the work force. The ratio of workers (those paying into the system) to beneficiaries (those collecting from the system) has shrunk from 16:1 in 1950 to fewer than 3:1 today.

It is true that Social Security amassed about $2.8 trillion in special issue treasury securities from payroll tax surpluses collected for about two decades up until 2010. But the painful and enraging truth is that Congress spent all the money and borrowed more on top of it.

Today the assets remaining in the Social Security trust fund are essentially IOUs—unfunded obligations that American taxpayers are expected to pay off now and in the future. And they are just part of the $19 trillion national debt. (Make that 21 Trillion since this article is a few years old.)

And here’s another cold, hard truth: even if Congress had secured the money paid in Social Security taxes in a lockbox and doled it out only to retirees, today's seniors have been promised far more in benefits than lawmakers ever made provisions to pay for. The unfunded obligation tops $14 trillion over the 75-year horizon.

In the same vein, Social Security's current and growing deficits are already adding to the national debt. The Treasury cannot create money out of thin air, but it can borrow on the credit of the American taxpayer. And that's exactly what's happening today to cover the Social Security shortfall.