Buyouts, layoffs and age-discrimination...

In a perfect world, you'd have 25 times your preferred annual expenses socked away, and then you'd live on four percent a year for, basically, forever. But that means socking away $1.5 million if you want a retirement income of $60,000 annually.

Good news: You might not need $60K, since you won't be saving for retirement anymore, you probably will be done funding kids' college costs and you might even have your mortgage paid off. And since you don't have to leave a big pot of money behind to grown children, you can draw down your nest egg a little each year, based on your estimates of how long retirement will last (that is, 25 years till you die? Maybe 30?).

More good news: I haven't even mentioned Social Security or company pensions. The former will be around in some form, at some amount, for you, as a supplement to your retirement savings. And if you have a company pension, that's free money you might not have counted on.

There are all sorts of online retirement calculators that you can use, plugging in variables (savings, years till retirement, years IN retirement, annual expenses, estimated pensions) to help figure this out.

My hunch is, most of us will be able to live on a lot less than we'd think. If I got to, say, $750K in retirement savings, then took 5 percent out a year ($37.5K) and then boosted that with some Social Security, and no longer had to fund a 401(K) or the kids' college savings, I think I'd be in pretty good shape.

Two X factors: Health-care costs, especially if you or spouse get hit with a serious condition that requires ongoing care. Some have said seniors can count on spending $300K or so on health care during their retirement years. Second one is bridging the gap between an early retirement, assuming that's possible, and the start of Social Security. My understanding is that a lot of people are better off collecting their Social Security as soon as they're eligible, and even just banking it; the amount you lose by starting early doesn't negate the value of taking less money now.

Third X factor is a major downturn in the market just as you retire, with your nest egg getting whacked hard. No way to prevent that, other than diversifying and having safer investments as you get ready to leave working world.

Good luck. I'm a big fan of anybody who can tell 'em to take the job and shove it. But you've got to save smart to put yourself in that position.

 

Joe Williams, huh? I would have guessed Merrill Lynch.

Thanks for the tips. Now I just have to figure out how to save $1.5 million.

 

If you're lucky, you'll die early and rich.

 

I'm shooting for early, broke, fat and well-traveled.

 

Not at all.

With smart planning, you can "retire" to a job with a Web site, continue writing and make some money.

I almost have Joe's magical number retirement number in the bank. It won't be long.

 

Go, Six Toe, go!

Then stay healthy, to keep your fun money out of the medical profession's pockets.