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People often talk about how much you should save for retirement. Before I was married, I threw out a random, but big number such as $1 million. Reality is, I don't have a lot of expensive things I want to do in retirement. However, my husband has a different view of retirement. His retirement plans will cost a lot more money. Although he thinks he can retire on his comic book collection, I wanted to come up with an exact amount we should have saved for retirement.
When it comes to covering the basics, I used to plan to have at least $250,000 to fund my individual retirement. But, as a married couple, we would need a lot more. We got on the same page when it comes to financial planning for retirement by talking about the different ways we could spend time in retirement. By identifying how we would want to spend our time, we could put a more specific cost to our retirement days.
Taking trips during retirement
One of the biggest expenses we will have in retirement is the cost of traveling. I find that humorous since I don't like to travel at all. I avoid flying on airplanes. I don't like road trips. However, my husband's vision of retirement includes constantly being on the go and visiting other countries. After making some calculations, I figured we need at least $200,000 in retirement to cover our travel and vacation expenses.
Taking up old and new hobbies
My husband has more expensive hobbies related to his interest in the strategic card game, Magic the Gathering. My hobbies include writing and gardening. My writing hobby costs nothing, and actually pays us. Gardening is a fairly inexpensive hobby. Although I don't know if Magic the Gathering tournaments will exist when we retire in another 30 years, I am planning for similar expenses. I figure we will need $25,000 in retirement for hobbies.
Helping others during retirement
Although it doesn't cost anything to volunteer, we may want to have plenty of money to donate to charities and causes. I also want to have enough money to help pay the grandchildren's college tuition. Helping others during my retirement and leaving an inheritance is a major priority for me. My husband also has causes that mean a lot to him. I estimate we will need $200,000 saved for donations.
Working part-time and returning to school
Since I hope to continue writing during my retirement, I may have extra income coming in. However, I don't want to plan on having income during retirement since the future is unpredictable. My husband says he may want to finish that doctoral degree after he retires or take other classes that interest him. I don't any interest in taking enrichment classes during retirement. Perhaps my husband will decide to teach part-time at a community college. I figure we will break even between the money we earn working part-time and the money we spend on education after retirement.
We will have our mortgage paid off when we retire. I know we will need at least $500,000 together to be comfortable with the basics during retirement. In addition, I can now add the $425,000 we will need to cover our traveling, hobbies and other interests. After thinking about how we will spend our time in retirement, I figured we need at least $925,000 total. I guess my random $1 million for retirement costs was not so far off the mark after all.