Mailbag: I’m on sabbatical and want to retire early, do I have enough money?
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everyone, i'm gene chats keep. Thanks so much for joining me today on her money. I'm so excited to bring you another one of our live male bags today where you jump on the phone with me and I get answer all your questions.

IT doesn't happen as often as I would like IT to, which is just a call out that if you've got a question and you wanna spend a little time chat chatting with me one on one, please send us a no. When you send your question into malbak, we will follow up and we will try our very best to make that happen in short order. And i'm especially excited for today's male bed because we get into what I really mean by the retirement benchMarks.

I think many of you have heard me talk about the importance of trying to save enough retirement. You wanna aim to have one times your salary by age thirty three times, by age forty six times, by age fifty eight times, by age sixty and ten times by the time you retire. These benchMarks are fabulous, but there also benchMarks they're not personal.

And the members of our her money community have us some really great questions, like, are they enough or not enough for me? What happens if I want retire early or take us about tile? Do they factor in social security? And if you're close to those benchMarks, but not quite there, how do you know if you make IT true without running out of money? We're going to tackle all of these today with listener piani.

And before we get into, what if you've got a similar question about hitting the benchMarks or something else entirely that's jump on the phone, reach out to me at mal bag at her money to come, and we will set up a zone call. But before we get into IT, we're gonna take a quick break. Her money is proudly sponsored by element financial engines.

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Flash her money, happiness with us from her home in tampa, florida. Well, I hope you've been relatively safe from the recent storms. Tiffany, any you do okay.

doing okay. Now, I had a lot of work done. What I did have some damage from melton, so, but all of that was completed last week. So I was good.

good. You can head into the holiday feeling a little bit Better than yes. Tell me what's on your mind, why did you reach out and how can I help?

So I reached out a few weeks ago. You had that weapon at night, and I was on that call and I said you a question after the fact where I hear multiple times about needing to have ten x, you are salary by the time you retire.

And one of the questions I had is, could you give more information as to really defining that? Is that ten x you know, by what age? Like if i'm fifty five and I wanna retire by sixty or sooner, when do I need to have that? And is IT based on the salary that i'm exciting with or the highest salary that I ever had? Like how do you define that? And then does that telex include what you would earn with, say, social security pension? Like my husband gonna get a pension, will both obviously get source of security but not we're planning not to take till sixty seven. What does that ten nex really entail? And at what age are you can you retire if you hit that ten nex, if that makes sense?

These are amazing questions. I'm just gonna a back up and give people a little bit of history. So a few weeks ago, we did a free webinar for folks who wanted to talk a little bit more about um budgeting and about their questions relating to retirement.

We went through a little bit of our finance fixed magic and and help people sort of get a grip on their finances at something that I enjoy doing. Every once in a while, we will do IT again in twenty twenty five of your interested drop us a line and let us know you would like to come to the next free web on r. One of the things that we did focus on where the retirement benchMarks.

And if you've been a listener to this show for a while, you may have heard me to talk about them. Essentially, they are a series of benchMarks that are set up to help you make sure you have enough money to last you thirty years when you retire. And the benchmark go like this, you wanted aim IT to have one time your salary by age thirty three times, by age forty six times, by age fifty eight times, by age sixty and ten times by the time you retire.

Now these benchMarks are set up to replace about forty five percent of your preretirement income in retirement. Meaning they are aside from social security is something that you are going to need as well. But when combined with social security for people who earn between fifty thousand dollars a year and three hundred thousand dollars a year, these benchMarks will get you to the point with social security to be able to replace about seventy five to eighty eight percent of your preretirement income.

Now if you have a pension, a pension will do more than that, right? Social security is is a paycheck that's gonna for the rest of your life. A pension is gonna last for the rest of your life.

And so if you've got a pension, you can dial back these benchMarks by about as much as that pension is going to cover up your preretirement income. And when I say preretirement income, I mean your last salary. So if you know that your pension is gonna cover seventeen percent of that retirement income, you can dial those benchMarks specks that they only need to cover thirty percent of your preretirement incomes.

So rather than needing ten times, you'd need about between six and seven times your preretirement income. If your pensions gonna cover more, you can dial them back even further. Now all of that is to say these are benchMarks, right? These are rules of them.

And rules of them are great until they are not. And so the question that I think you guys, you and your husband need to ask yourself is, are we ready to do the exercise of figuring out how much it's gonna cost us to actually live the retirement lifestyle that we want, right? Have we thought about what that is? Is IT a ton of travel? Are we I saw your son heading upstairs earlier before we got a there with his lunch.

Are you looking at educational costs? Are you are there other expenses that are gona hit you guys in retirement that are going to mean that your retirement is gonna class significantly more than that eighty percent of free retirement income? And if so, that means you need to heavy up on your savings or delay retirement a little bit until your savings hit the point where you can actually handle those things.

Now that's an exercise that we do. We run A A section of finance fix called a preretirement check up. We go through that retirement math of figuring out whether you're on track to essentially get where you need to go. But it's also something that you could do with a financial advisor.

You guys could sit down and try to do IT yourself, but I think I think IT requires some conversation about, alright, what is this retirement thing look like in our real lives? Have you had those conversations? Have you thought about that?

Well, I will say so we do have a producer. And based on the conversation like now more recently, even as recent as last week, is where we were having conversation around really what we're spending now and what we would need to be spending in were in retirement to live the lifestyle that we want to live. And that was the the aha moment last week in that conversation because the amount t that he currently got in the plane that we could spend sounds like a lot. But when I go and look line by line up what we're spending, it's not merely enough, you know, I mean, so we've got to either a Taylor back or be work longer and say more to be able to sustain that.

What were the gorges where the spending surprised you?

Groceries eating out an amazon because amazon on the statement just as amazon, but IT doesn't tell me you know what we bought. So i'd have to like think about the dates and was IT clothing, was IT groceries, was a stupid stuff, a lot of revolve spending. So yeah.

yeah, yeah, well, it's frivolous or it's not right. So amazon and I think we all have this amazon issue or many of us have this amazon issue is one of those things that just not specific, right? You just don't know if it's if it's necessary.

In some cases, it's necessary when I order a master amount of paper towels on amazon that is necessary when I order the latest wrinkle cream that I got sucked into the vertex for. That is not necessary, right? So we have to start paying attention to those things. What do you think you're likely to do in terms of delaying retirement or down down scaling your ambitions for retirement?

So I think it'll be a combination because right now I took about ticket. So I think some of IT is my own internal struggle that I am not contributing, but I have the ability to live off, you know, that interest that i'm earning at the moment from A A account. But i'm also going through mean, even just yesterday, I so my mother passed away in twenty twenty two.

I moved to in twenty twenty one. Thank you. Ah I moved her in twenty twenty one and because I moved her in, I had opened the storage and never had a storage before.

And the cost of that storage from twenty twenty one to now has more than doubled and SHE passed in twenty twenty two. So I was just letting stuff sitting there. So over the weekend, my husband actually went through IT and we donated the mass of IT through away some other stuff at the landfill.

And then I have three storage containers that I need to go through memorial ila to determine what i'm going to do with that. But that's that right there will save us most three hundred dollars. And I went through and non renewed for subscriptions in the middle. The night couldn't sleep.

So yeah, you know, trying to find where I can skin back on the nice to have, not the needs and then really identify what are our fixed costs, you know today because we've just kind of been paying them because we could versus really paying attention to what are those costs. I've never shopped auto insurance. I've had the same of auto policy since I was fifteen years old.

That's a potential opportunity among koo because among svd. Al, so where can I now go shop? You a lower alternative, and then determine when my to go back full time. Do I want to go back full time? If not, what do I want to do part time so that I could maybe take advantage of discounts, work at a grocery store, something like that, so I can take advantage of those discounts and .

maybe get medical benefits that that sounds like a really smart and well laid out plan, right? You're looking at the numbers, but you're thinking about your life. A lot of people are sort of facing into retirement.

They don't want to a not work at all, but they want to work some. And so there continuing to and earn a part time income, which is really helpful as you look to defer some of these expenses. And are you guys dealing with college costs?

He graduated december twenty twenty two. So he technically works here, and he has a remote office here and works here during the day and eat here the shower. But he actually has an apartment .

somewhere amazing. So you get a good amount of time. Body has some independence. That's great. Do you have any other follow up questions?

I don't think so. I mean, you answered all the questions that I had and maybe you've send those things previously, you know on different podcast that i've missed. I try to listen religious ly, but I think you into them.

Okay, all right. If there's anything else that comes up, let me know. And once again, i'm really sorry to hear about your mom. We had the same kind of weekend of getting rid of stuff and memorable elia here and it's IT is a .

lot yeah very hard. I appreciate you. Ah thank you. Thank you for addressing my questions.

You're welcome and we'll be right back. Thanks so much for joining me today on her money. If you love this episode, please give us a vive star review on apple podcast. We always value your feedback. And if you want to keep the financial conversations going, join me for a deeper dive.

Her money has two incredible programs, finance fix, which is an eight week program designed to give you the ultimate money makeover, and investing pics, which is our investing club for women that meets by weekly on zoom. With both programs, we are leveling the playing fields for women's financial confidence and power. I would love to see you there.

We'd like to thank our sponsor, adult finanical engines. Her money is produced by heavy pascale, our music is provided by video helper, and our show comes to you through mega one. This podcast is also part of the airwave media podcast network. You can find us and other shows like us at airwave media dot com. Thanks for joining us and will .

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