RETIREMENT
Can You Ever Know if You’ve Saved Enough for Retirement?
I’m on a 10-year countdown to a peaceful, secure, fun retirement — I hope!
Saving for retirement is a wild guessing game. When you save for a house or a car, you at least know the asking price. When you save for a house repair, you learn to add 25 percent to whatever a contractor tells you.
With retirement, I’ve heard you should save your current salary times 10, and that’s a nice, tidy formula that doesn’t even require a calculator. But it’s a bit too tidy. It’s based on current circumstances, whatever you happen to be bringing in.
I am trying to wrangle the expenses I’ll likely have when I retire.
It’s not going great
I am turning 55 this year. My husband, J, and I have been talking, thinking, and dreaming about retirement for years, and now here we are at this crazy juncture. We can see a sliver of that life far, far in the distance. The vision is blurry, but it’s there.
We’re excited and terrified.
What makes retirement terrifying is not knowing how much money we’ll need. And we don’t know how long we’ll be able to stay in the workforce due to ageism and burnout.
J and I don’t like living amid so many unknowns, which is unfortunate, because being alive in 2024 requires the ability to live with unknowns. So much is out of our control. I’m a big fan of control. So here I am, looking for the balance through the lens of retirement.
An uncertain retirement strategy
Like many GenXers, we started saving through our 401(k)s in our early 20s. J and I worked 13 years for companies that still offered pensions. We are each eligible for small pensions — about $1,200 a month combined — when we retire.
Our 401(k)s and taxable retirement account have grown over time. We have equity in our house. On the debt side, we owe about $35,000 on our mortgage. We had to replace both our cars last year. We owe a whopping $65,000 on these newish cars. We are saving up for at least $30,000 in home repairs — not improvements — just repairs to keep the house from falling down.
We are sending our only child to college next year (OMG!). We have saved for their college education and hope to be able to pay for tuition, room and board with the 529. Still, there will be many other expenses related to B, our wonderful kiddo, while they morph into a money-earning adult.
And here is something I am afraid to even type: We need to save up in the likely event my mom outlives her money and needs my sister and me to pay for her assisted living care. Welp.
I used to feel confident about our retirement and proud of our retirement saving strategy. But now I am not sure. Our retirement feels like our house. It looks OK from the outside. It’s not great, but it’s fine. But on closer inspection, our retirement plan, like our house, is in need of care and attention.
I’m trying to figure out what kind of care and attention our retirement plan needs. We need to earn more, but how much more? We are currently maxing out our retirement accounts, but we need to get our debts paid off, get our house fixed and save for emergencies.
Retirement planning the GenX way
Looking ahead, all I have are questions. How much will healthcare cost? How long will our parents live, and how much support will they need from us? How much will inflation eat away at our purchasing power? How high will taxes be? Will Social Security pay us what we’re owed?
And the multi-million-dollar question: How long will we live? My mother is 89, and her mother and grandmother lived to their late 90s. Long lives run in J’s family, too.
So I am about to disclose my retirement goal. Before I get there, I want to acknowledge that I am in a position of privilege to have as much as I do. I hate that our government has failed our society in creating a system where so few can save enough to retire comfortably.
I am a second-generation college student, though my grandmother lied about having gone to college and somehow got a job as a college instructor, so I think of myself more as third-generation. I am also a nepo baby, having gotten my first newspaper job through my sister, who is 13 years older than I am and worked her way up just in time to get me in the door of a large metro paper at age 23.
So here it is: We have had $2M as a retirement goal for a long time. We’re 65 percent of the way there. Will we make it? If we do, will it be enough? Assuming 4 percent withdrawals (is that the right amount to assume?) and combined with Social Security and pension income, this would give us about $12,000 per month, pre-tax. That should be plenty. More than enough. But it’s less than we currently spend every month.
How are we supposed to set goals and work toward them with so many unknowns?
Here’s what we want in retirement: peace, security and fun. We want to travel, simply. Nothing fancy. We want to live small, spending time with friends, loved ones, and our dogs. J loves cooking, biking and tinkering. I knit, embroider, write, sew and do community things. We plan to try some new hobbies in retirement and find some things we can do together.
I wonder if we are expecting too much. Maybe we should set the bar low, just hoping to get by, and then feel good about ourselves when we jump over the low bar. It’s the GenX way.
So here I am back in the weeds of personal finance, somewhere I have not been since my 20s. Back then I was all about saving up for a house. Now I am sitting in said house, piles of dog hair in every corner, and it cracks me up that this house was some sort of dream I once had.
It was a tangible dream. And back then, homeownership was an attainable dream.
My retirement dreams are less specific and feel less attainable. I am learning all I can about planning for retirement, and I will execute every strategy I find that makes sense. Sheesh, I hope it will be enough.
About Priscilla Graham
I’m a writer and nonprofit communications professional in Georgia. I write about my journey to retirement. Love dogs!
