Question : Question on retirement planning – my parents?
My parents have asked me to help advise them on their retirement planning. They have set a tentative target date as June 2011. My mom will be 62 and my dad will be 64. They earn between $ 55 – 60 K, together, per year.

My mom’s pension will pay $ 7,200 per year. Between my dad’s 401(K) and their IRAs, they have about 120K saved. I’m guessing SS payments of about 24K per year. They also own 200 acres of farm land that they rent out. After property taxes and some land improvement expenses, they net about $ 8k per year on the land rental.

I’ve figured that on their 401(k) and IRAs that if they withdraw $ 7,200 per year, and assume 5% growth, those funds will last 32 years before they are exhausted (bringing my mom to age 94, and dad to age 96).

So … that comes to a yearly total retirement income of $ 46,400. After state and federal taxes the net (I think) would be closer to $ 45,200, or about $ 3,700 per month. That’s about 80% of their current income – probably OK to retire on.

Is my thinking right? Any advice?
Assume expenses at an average of $ 3,700 per month or slightly less. My parents don’t live “high on the hog”

House is paid for.
I’m almost certain that they would both retire with medical insurance…I’ll have to ask for sure.
retirement planning help

Best answer:

Answer by Vari Lee
advice,,,,yeah…you left out a very important factor in your plan…..expenses?

the “average” is not important….
you need to calculate their exact monthly expense in order to correctly answer your question….

i assume a pro or your parents will be handling this and not you…