Brad and Arita Bohannan, 44 and 42 years old, want to retire by the time Ms. Bohannan is 50. Their retirement plan: Sell the businesses and live off the proceeds and income from their real-estate holdings. Their commercial real estate is collectively worth about $3.4 million, but has mortgages totaling about $1 million. They pay $1,100 per month for health insurance through a plan from one of their bars. The couple are using the proceeds, along with all of the income from their commercial properties, to pay down their commercial mortgages. The couple also has two 529 college-savings accounts, each holding about $45,000. They contribute $3,000 a year to the 529 accounts. If they pay off their mortgages before they retire and the 529 accounts cover what is left of tuition (the couple will likely pay for most of college out of pocket before retiring), they should expect to spend about $100,000 a year. Right now, plans on Louisiana’s health-care exchange range from $15,000 to $21,000 annually, per couple, and $17,000 to $35,000 if the two children are included, Mr. Clemons says. Still, the $250,000 of annual income from the commercial real estate alone should easily cover living expenses, assuming the mortgages are paid off, though some maintenance costs should be expected.
One of the most common questions we get is how much someone should have saved for retirement at their age. That’s a tough one to answer because we don’t track employees’ actual retirement balances, but GoBankingRates.com provided some insight by comparing its own survey results with savings guidelines from J.P. Morgan. According to them, a 40-yr old earning the median salary of $67k should have more than $100k in their retirement nest egg, but only 20% actually do. A 50-yr old earning the median income of $71k should have over $212k, but only 22% are there. A 60-yr old earning the median $61k a year should have more than $260k but only 26% have hit that.
Are You On Track?
Not there? Don’t panic (yet). First, you’re NOT average. It’s best to run a personalized retirement calculation because your actual target depends on a variety of factors:
When do you plan to retire? Retiring early will obviously mean having to save more,…