Plus, we live on two incomes, so having a pension that is 70% of his income isn’t the same as having 70% of our income. I don’t make alot, but it counts. :-)

Your comment of gold-plated spinners made me really laugh…I even called my husband over and read your comment out loud.
.-= Budgeting in the Fun Stuff´s last blog ..The Special That Sucked Me In… =-.

As others have pointed out, your retirement income doesn’t have to replace your working-life income. It just has to cover your expenses + wants. Your husband has what’s known as a “defined benefit” pension plan, which is considered the Cadillac of pension plans. It simply doesn’t get any better. In all likelihood, his pension alone will be enough for the two of you to live comfortably. By the time you retire, you should easily be able to live on 70% of your current budget, because your current budget includes many expenses that you’ll no longer have to pay for after you retire, such as a mortgage, saving for retirement, saving for kids’ educations, and life insurance. Without those items weighing down your budget, you should easily be able to live on 70% of your current income.

Furthermore, you’ll be getting income from Social Security. Everybody likes to talk about how it’s bankrupt and collapsing and blah blah blah, but the truth is that there will be at least SOMETHING there. They might move the eligibility age out 2 years, they might decrease benefits slightly, but you’ll still get SOMETHING from it.

I guess my point is that you and your husband could opt not to save a single penny for retirement, and you’ll be just fine, because of that gold-plated pension. Most of society doesn’t have that kind of protection. Please realize how fortunate you are to have that kind of guaranteed-for-life, fully-indexed income stream that you never have to worry about outliving.

So I guess my question is, why in the world would you think you need $2 million ON TOP of such a rich pension entitlement? What are you planning to do – put gold plated spinners on your wheelchair? Impress the other ladies at Bingo with your diamond-encrusted dentures? :) Please make sure you’re not living too leanly now in the interest of saving waaaaay more than you need for retirement. That pension relieves you of the burden us normal, pensionless folks have to deal with.

There’s there’s the small issue of inflation which is going to make future numbers look pretty dramatic. In 40 years, $1M is just not what it used to be. In fact figure 3% inflation. That’s a doubling time of about 24 years, so let’s just figure two doubling times. So if we say we need $1M today, we’ll need $4M in 48 years.
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Best, Sam
.-= Financial Samurai´s last blog ..The Ripples OF Giving =-.

I know that it is common to calculate retirement based on 80% of income, but I like to use 100% to be conservative. I also don’t take social security into account.

Of course, how much you need for retirement is a personal choice, so you can use whatever numbers you like. I just thought that these were great general suggestions. :-)
.-= Budgeting in the Fun Stuff´s last blog ..Need Money? Have an Extra Bedroom? =-.

And I agree, What not aim high!?:)
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Leanlife coach, I admire your attitude as relates to shooting for 5 mill. I’m part of the leading edge of the boomers. So I have a defined benefit pension that serves me well. Haven’t yet had to dip into my separate investment accounts for daily living expenses.

We include the pension in our calculations simply because my husband is a teacher. The pension motivates him through the tough days and is a major benefit of working for the state. If they take it away, we’ll have a lot bigger problems than retirement…

Good luck on your $5 million goal! Why not aim high?
.-= Budgeting in the Fun Stuff´s last blog ..Need Money? Have an Extra Bedroom? =-.

For several years I was shooting for $3mil. But then a couple years ago I dug into the escalating cost of health care and factored in not just my life span but that of my wife. Now, my goal is $5 mil. Honestly, it is a stretch goal but hey, I’ve got nothing better to do till then!
.-= LeanLifeCoach´s last blog ..Combat the Closing Techniques – The Make It Affordable Close =-.

Good luck on your debt!