How much is enough for retirement?

46 posts in this topic

8 hours ago, catjones said:

Take the remainder and divide by .05 (5% average return on S&P, NASDAQ).  The result will be the necessary size of your nest-egg required to pay for your expected expenses. 

Unless S&P and Nasdaq perform like the Nikkei 225 has for 30 years (38915 in Dec 1989 to today´s 23367)

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16 hours ago, jeba said:

Unless S&P and Nasdaq perform like the Nikkei 225 has for 30 years (38915 in Dec 1989 to today´s 23367)


only the most unlucky - bitched slapped by fortune- SOB would have dumped all his load in the Japanese stock market shortly before the big crash of 89. Much more likely he would have spent years investing and enjoying the ridiculous growth rates before the abrupt return to earth.
 

If you account for this, it still looks bad for the hypothetical Japanese investor (should really have diversified) but not nearly as bad.

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How much do you need for retirement? 

 

Don't you have to figure out how much you need per month to cover your needs, times that by 12 to get what you need per year and then times that by the number of years you think you will survive after the age you retire at?

 

As for investment in the stock market, I've decided to do my own thing and have invested in ETFs (exchange-traded funds). Anyway, in just over a year, some of them have increased between 6% and 8% on the low side to 15% to 18% on the higher side. 

 

And I am heeding what Warren Buffett says - don't fiddle about with investments. Invest wisely and then hold. He reckons the best length of a holding period is forever.

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If you‘re going to retire in Germany, you need to factor in the worst case scenario as you grow older, which is needing professional nursing care.

That is expensive.

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This reminds me, I may need to contact one of you guys regarding retirement and insurances. I'm currently all over the place - have company pension, Directversicherung, Rürüp, Riester, Berufs­unfähigkeits­versicherung, Risikolebensversicherung, some 401k/IRA in the states, some cash savings doing nothing.  I also need to transfer my previous 5 years of social security credits from another EU country to Germany's. What does the average person in Germany do regarding old age care? What does the well-prepared German do (meaning someone of above average income and good savings habits) ?

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On 22.12.2019, 15:57:16, nina_glyndwr said:

And I am heeding what Warren Buffett says - don't fiddle about with investments. Invest wisely and then hold. He reckons the best length of a holding period is forever.

 

A fine long-term strategy, if you are aware that in the long term we're all dead. 

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4 hours ago, wien4ever said:

What does the well-prepared German do (meaning someone of above average income and good savings habits) ?

Move to Thailand.

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And I thought the hardship I ensure now by taking a drastically lower paycheck every month is to provide for my old age! ;)

btw, I am comparing to singapore where I lived for 8 years. 
Seriously though, what do you guys save in a part from compulsory pension contributions? I mean investments within Germany specifically. 
Housing market?

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On 24/12/2019, 15:15:39, silty1 said:

 

A fine long-term strategy, if you are aware that in the long term we're all dead. 

🤣🤣🤣🤣🤣

 

the problem with Warren Buffets approach is he buys whole companies, kind of hard to do for the average joe. 
 

Besides that companies go bankrupt all the time. Anyone remthe “niffy 50”? Stocks you could buy and hold forever, well over half those companies are now gone.

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Edit: Anyone remember the “niffy 50”? Stocks you could buy and hold forever, well over half those companies are now gone.

 

 

Being a Baby Boomer I'm and load of my friends are going through this right now and it's a devilishly tricky question to deal with, at least from a pension point of view if you've lived in more than one country. For my wife and I (t minus 3 years 2 months) it was basic math. Our place will be paid for shortly so I figure that 1500€ a month is the base amount that we need. That would keep food on the table and a roof over our heads but not much more. 

 

 

On 12/22/2019, 4:15:24, john g. said:

If you‘re going to retire in Germany, you need to factor in the worst case scenario as you grow older, which is needing professional nursing care.

That is expensive.

 

This is a huge issue everywhere. One aspect a lot of married couple fail to take into account is what happens when the partner goes into a home. You suddenly have two overheads that need to be carried.

 

Not sure about the UK but in Canada a big issue is housing. For years condos/ (townhouses) where the poor mans mansion. You bought one as starter home and when you had enough equity you upgraded to a SFD preferably with a 2 car garage and big yard. Now with the baby boomers hitting retirement the market and thinking of downsizing but the market has completely flipped. Condo prices have outstripped SFD by a large margin. This has thrown a major monkey wrench in the plans of many baby boomers who where hoping downsizing would free up equity. It's probably why reverse mortgage numbers have taken off in the last couple of years. 

 

 

 

 

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On 12/24/2019, 7:43:47, LukeSkywalker said:

Move to Thailand.

Not necessarily a bad idea.

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Indeed, Rushrush! We know a couple of retirees in our village. They had a nice house with wonderful views and supplemented their income with holiday guests in the summer.

 

A year ago, they downsized for health reasons ( the husband with diabetes and walking problems ), sold their place and bought a smaller place on flat terrain rather than in the mountains.

They were in the process of moving, removal people had just finished delivering their furniture etc- then, as a great surprise and shock to us all, the wife Annie, a popular yoga teacher and the one whose magic hands healed your aching back etc in her massage room, suddenly took ill and died a few weeks later in hospital.

 

So the husband, Pete , was left alone, had a fall, broke a hip for the second time and is in a wheelchair.

 

He has to pay for care supervision at home, using up the profits from the sale of the house and worried about his small UK pension and its decreasing value.

 

It takes courage to get old.

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On 12/24/2019, 3:40:13, wien4ever said:

This reminds me, I may need to contact one of you guys regarding retirement and insurances. I'm currently all over the place - have company pension, Directversicherung, Rürüp, Riester, Berufs­unfähigkeits­versicherung, Risikolebensversicherung, some 401k/IRA in the states, some cash savings doing nothing.  I also need to transfer my previous 5 years of social security credits from another EU country to Germany's. What does the average person in Germany do regarding old age care? What does the well-prepared German do (meaning someone of above average income and good savings habits) ?

Definitely check out the worst case scenario ie becoming an invalid, check if your will  is up to date, are there any “ gifts “ you can already leave to members of the family to soften the potential blow of inheritance tax etc.

 

Talk to your tax consultant and if you don’t have one, why not contact @PandaMunich on Toytown ( fully- fledged Steuerberaterin and very knowledgeable)?

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41 minutes ago, john g. said:

 

 

Talk to your tax consultant and if you don’t have one, why not contact @PandaMunich on Toytown ( fully- fledged Steuerberaterin and very knowledgeable)?

 

Of course the other side of this is wills and estate planning and this is where Germany is a bit strange. We have wills back in Canada with family but I realized that they wouldn't have the fainest clue where to even start. So thinking you need a German will I found out it's not the best way to go. Instead you go to your accountant (I forget the German word for this) and have him draw up an estate plan. Once that is done you hand write it out and return it to him where he registrars it with the city. He is then responsible to fullfilling your wishes. In our case as we have no children we are leaving it to family back home. It's a bit of a strange process but for expats living here long term it can be the best way to deal with your estate. 

 

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One of the big challenges facing Baby Boomers is determining how to draw down your assets, government pensions cover at the most 50% of your retirement needs. Most have defined contribution pension plans so it's your responsibility to determine the best way to draw down your assets. and it's a lot tougher than you think. Get the mix right and you'll have enough income to last, get it wrong and 10 years in you're eating dog food. I am very very fortunate that our pensions will cover our living costs with room to spare. The assets can be spent down on trips and such. 

 

 

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There's something to be said for euthanasia in simplifying the calculations. Decide the latest date when you want to check out and work backwards from there.

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I stick with the Index funds to be safe, and I have a bit invested in straight up stock (Alphabet, Tesla) that I can sell off at some point, just to play around (and maybe get lucky).

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don't go with the baby boomer herd!! index funds included! diversify! diversify! one never knows...

 

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52 minutes ago, wien4ever said:

don't go with the baby boomer herd!! index funds included! diversify! diversify! one never knows...

do you know what an index fund is?

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