$13 Million Goal for Early Retirement (am I crazy?)

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
cmublitz
Posts: 69
Joined: Sat Jan 24, 2015 9:18 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by cmublitz » Mon Jul 31, 2017 11:56 am

I agree, that is an impressive increase!

Also, I didn't see if anyone else mentioned this, but you're holding VTSAX in both taxable and your IRA. Doesn't this make it more difficult to tax loss harvest without running into a wash sale?

MaxSave
Posts: 19
Joined: Tue May 06, 2014 10:02 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by MaxSave » Mon Jul 31, 2017 12:31 pm

All contributions are listed under the "Contributions" heading, which appear to total ~50K. As a result ~127K of the gain from last year is market return/re-investing dividends.

As far as holding VTSAX in both taxable and my IRA interfering with tax loss harvesting, I will be the first to admit that I am guilty of not watching my portfolio carefully enough to be aware of when tax loss harvesting opportunities arise. Even if I was aware, inertia might prevent me from taking action if the amount of the harvest was to be small.

Thanks!
MaxSave :sharebeer

chuppi
Posts: 130
Joined: Sat Jun 16, 2012 9:47 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by chuppi » Mon Jul 31, 2017 1:05 pm

Suppose you amass 12million and you retire at age 50. Lets say you stick to around 120K annual expense or a little more. If your portfolio grows 3% over the next 20years, you will end up with 17million at age 70.
Even if you retire with 5million, you will be with almost 6million in assets after 20years of spending 120K annually.

It is very important to get to a realistic number and add some buffer to avoid accumulating more than required. Lot of things can change and you may have to keep adjusting until you have clarity.

WhiteMaxima
Posts: 676
Joined: Thu May 19, 2016 5:04 pm

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by WhiteMaxima » Mon Jul 31, 2017 1:28 pm

if you live in venezuela, you could turn 1k to 13 mil in weeks. norminal money is just a number. Actually any paper money or stock is just a number. A good measure of wealth is long can your saving can support your lifestyle in a happy, satisfation and healthy way. If you believe this, you can live happier than Bill G and Warren B.

User avatar
David Jay
Posts: 4268
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by David Jay » Mon Jul 31, 2017 2:23 pm

For a simple rule-of-thumb, consider 2.5% withdrawal rate to be a "perpetual" portfolio, i.e. you can retire at 29 and live to 100. So for early retirement at any age you can use that multiplier. The withdrawal percentage gets higher as you retire later, 4% at age 65.

Work it back. You don't need anywhere as much as your title suggests.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

SimplicityNow
Posts: 320
Joined: Fri Aug 05, 2016 10:31 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by SimplicityNow » Mon Jul 31, 2017 2:24 pm

Congrats on your accomplishment.

I see nothing wrong with your goal of finding joy in the simple, low cost but gratifying activities that living a frugal lifestyle brings to the fore.

If it gives you pleasure to save more then spend and accumulate past the point that others feel is unnecessary, then go for it.

Good luck in your quest.

elbryn1000
Posts: 46
Joined: Fri Apr 27, 2007 7:56 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by elbryn1000 » Mon Jul 31, 2017 3:40 pm

MaxSave wrote: His 401k (Fidelity as new administrator):
Target Date Fund (55% US Equities, 30% International, 15% Real Estate) (0.12%) - $300K

His Roth IRA at Vanguard:
Vanguard 500 (VFIAX) - $22K
Total Stock Market (VTSAX) - $49K
Target Date 2050 (VFIFX) - $10K
Target Date 2055 (VFFVX) - $18K
Target Date 2060 (VTTSX) - $29K

Her Roth IRA at Vanguard:
Windsor II (VWNAX) - $108K

Her 403b at Vanguard:
Vanguard 500 (VFINX) - $176K

Her 401a at Fidelity:
Fidelity Freedom K 2055 Fund (FDENX) (0.64%) - $70K

Her 457 (deferred compensation):
Target Date Fund (50% US Equities, 30% International, 20% Real Estate/Other) (0.09%) - $97K
just something i've noticed with helping my parents out who have fidelity in that the freedom funds seem to have a high expense ratio versus the individual total funds themselves.

the wife's 401a in FDENX with .64% expense could be cut down if you look at FTBFX for bonds, FSTVX for us total stock and FTIPX for total international. fidelity's total bond is also more expensive than vanguard's. you can fill your bonds in the vanguard side at .15% expense, and fill us based total market in fidelity at .045%. granted its not a huge change but .3% over 200k is still $600 yearly for a few hours of spreadsheet work and re-balancing yearly.

alternatively, there's also stacked windsor, sp500, and varying vanguard lifecycle date funds. if you were to decide on a core asset allocation, you could reduce the different funds and complexity by using the funds that dont have active contributions as static fund holders.

sambb
Posts: 1923
Joined: Sun Mar 10, 2013 3:31 pm

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by sambb » Mon Jul 31, 2017 7:29 pm

SimplicityNow wrote:Congrats on your accomplishment.

I see nothing wrong with your goal of finding joy in the simple, low cost but gratifying activities that living a frugal lifestyle brings to the fore.

If it gives you pleasure to save more then spend and accumulate past the point that others feel is unnecessary, then go for it.

Good luck in your quest.

+1 - if you want or need 13M, then go for it. Let us know how it turns out. Warren buffet couldve stopped a long time ago also.

tim1999
Posts: 3340
Joined: Tue Dec 16, 2008 7:16 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by tim1999 » Mon Jul 31, 2017 8:43 pm

For someone in their mid 30s I think I've done pretty decently financially in life. I read threads on here with people my age posting numbers well above mine, but then get to the part where they are IT-type workers in California, and I breathe a sigh of relief because I work in an old economy industry in a LCOL/MCOL area, and it is not a fair comparison. Then I read this thread and felt like I was way behind! :shock: Congratulations to the OP though.

MaxSave
Posts: 19
Joined: Tue May 06, 2014 10:02 am

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by MaxSave » Tue Aug 01, 2017 7:51 am

I appreciate all the well-wishes and encouragement. My goal with the continued update of this thread is to share my journey towards FI and create a record of how my perceptions of money/retirement/etc, and forum response to those perceptions, change over time. I hope no one feels diminished by reading what I have accomplished in the way of saving, as no two people are the same and everyone's circumstances are different. I am very fortunate to be where I currently am financially and will never argue to the contrary!

Recently, I have begun to think about retirement more in terms of the age of my children, especially after reading articles that point out that once your children leave for college you have already spent 99% of the time you will ever spend with them for the duration of your life.

As a result, I have been notionally considering retiring at the end of 2029. That would put me at age 44, my oldest child would be mid-way through her Junior year of high school, and we should have hopefully amassed enough assets by then to support us for the duration.

Obviously a lot can happen/change between now and then, but I haven't seen too many people on here express retirement in terms of their children's life events, as opposed to a specific age or asset total. I thought it was an interesting idea to share.

Thanks!
MaxSave :sharebeer

Lafder
Posts: 3590
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: $13 Million Goal for Early Retirement (am I crazy?)

Post by Lafder » Tue Aug 01, 2017 9:07 am

MaxSave,
I am enjoying watching the progression of your savings and thinking on retiring. I am 49 now. I think we hit 100k around the time we were just over 30 yo. It will be a milestone to have 2 commas in your accounts!! The compounding interest really builds. You will get there soon!

I think it is wonderful you and your wife met young and had similar savings ideas. What wisdom to start low cost Roths so young. I hope to do the same for my kids when they get their first W2 jobs (the accountant I use discouraged me from counting cash jobs for them to start Roths).

As far as your thoughts on retiring when your daughter is in high school.......by then most teens want little to do with their parents :) By midschool it effected my daughter. I treasure our time together now. But I am consistently her second choice if an offer to hang out with a friend comes up. I suspect you will find your teenagers are not interested in a lot of family time. I am just adding that by high school your kids may be past the family time you are envisioning, so make the most of the time with your kids now that you do have the control of what they do :)

You already seem to be doing a great job of quality time with your family.

I would max post tax 401k and the mega back door Roth option, even if it meant dipping into your savings to pay ongoing expenses. Roth space is precious. My husband's take home pay is currently zero to max his megabackdoor option.

If you can and want to retire at a young age, go for it :) Looking forward to hearing if that is what you do.

I forwarded your original post to a friend when you first posted it who also thought they "needed" more than 10 million to retire. It was helpful for them to read through to also realize that was a much higher amount than either of you realistically "need"

lafder

Post Reply