When is enough enough?

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Topic Author
DoubleComma
Posts: 47
Joined: Sun Aug 23, 2020 2:23 pm

When is enough enough?

Post by DoubleComma »

Long time lurker and really appreciate this fantastic community. I've learned a tremendous amount from everyone here, but I have a question I have been struggling with that admitted is a little non-Boglehead in nature.

BLUF -- How much in actual dollars should one save annually?

What I'm struggling with is the desire to "live in the moment" vs, having a secure retirement.

In combination with the pandemic, a couple things have me reevaluating goals; the loss of DW's father at age 70 and my mother (72) having a terminal diagnosis that means she might reach 75 (maybe). I'm considering stepping back the savings ratea lot and encouraging lifestyle creep, in order to generate more experiences as a family today opposed to trying to accumulate everything for later.

Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.

This is a serious question, please do not respond with how much do I want saved in retirement. I kind of think I might have enough already but then I’m sure the wisdom of this community will show me what I’m missing.
Flyer24
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Re: When is enough enough?

Post by Flyer24 »

Topic moved to Personal Investments.
runner3081
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Re: When is enough enough?

Post by runner3081 »

Are you happy in life? Will spending more make you happier?

If so, do it.

We save a ton, don't have what you have saved up, but are happy, so no need to change it. Spending more isn't the road to happiness for us.
Dottie57
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Location: Earth Northern Hemisphere

Re: When is enough enough?

Post by Dottie57 »

I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
crazygrow
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Joined: Sun Apr 24, 2016 8:56 am

Re: When is enough enough?

Post by crazygrow »

Similar income and age. We decided in the last few years that this time with the kids is more important than a lavish retirement. Both are probably possible but we now make decisions that show that we are willing to give up some retirement fun for fun today with the kids. Do it - you won’t regret it!
crazygrow
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Re: When is enough enough?

Post by crazygrow »

Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
Normchad
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Re: When is enough enough?

Post by Normchad »

You’re doing fantastic, in terms of net worth and age.

Take just what you have today, and project it out to see how much it will be when you retire. You might not need to save another penny ever.

Since you’ve done such a good job, you do have lots of flexibility here. I’m in a similar situation. And I’m definitely loosening up on spending.

For example, I had thought I’d been going on nice vacations. Then I learned via another thread that my annual vacation spending is very low compared to others. So maybe I will start taking “once in a lifetime” type vacations, annually.
delamer
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Re: When is enough enough?

Post by delamer »

crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
The OP doesn’t have anything close to $2 million in retirement accounts. Re-read his post.
makingmistakes
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Re: When is enough enough?

Post by makingmistakes »

crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
Haha ... that’s what I was thinking. I’ve lived modestly and saved diligently ... when I finally hit $1 million in my 401k at 55, I felt so fortunate and started thinking about retirement. Then I came to bogleheads and realized what a poor wanker I am.😄
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AlabamaPaul
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Re: When is enough enough?

Post by AlabamaPaul »

makingmistakes wrote: Sun Aug 23, 2020 4:50 pm Haha ... that’s what I was thinking. I’ve lived modestly and saved diligently ... when I finally hit $1 million in my 401k at 55, I felt so fortunate and started thinking about retirement. Then I came to bogleheads and realized what a poor wanker I am.😄
It's all about your expenses in retirement. Some people need/want seven figures, some need/want six figures, while others manage just fine on SS with a small savings account...
delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: When is enough enough?

Post by delamer »

I sympathize with your desire to live life today, and wish we had done more of the activities that you describe with our kids.

However, what struck me about your post was the vagueness of the numbers.

You’d be well-served to come up with a list of specific trips, experiences, and other goals that you want to achieve. Then assign a timeline and cost to each item on the list. Once that’s done, figure out how much you need to set aside to cover those costs.

I admit that the idea of “just park it until something comes up we want to do or buy” mildly offends my sensibilities. :?
JBTX
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Joined: Wed Jul 26, 2017 12:46 pm

Re: When is enough enough?

Post by JBTX »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm Long time lurker and really appreciate this fantastic community. I've learned a tremendous amount from everyone here, but I have a question I have been struggling with that admitted is a little non-Boglehead in nature.

BLUF -- How much in actual dollars should one save annually?

What I'm struggling with is the desire to "live in the moment" vs, having a secure retirement.

In combination with the pandemic, a couple things have me reevaluating goals; the loss of DW's father at age 70 and my mother (72) having a terminal diagnosis that means she might reach 75 (maybe). I'm considering stepping back the savings ratea lot and encouraging lifestyle creep, in order to generate more experiences as a family today opposed to trying to accumulate everything for later.

Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.

This is a serious question, please do not respond with how much do I want saved in retirement. I kind of think I might have enough already but then I’m sure the wisdom of this community will show me what I’m missing.
Let's say you stopped 401k today. Your approximately $1 million in savings over 20 years could theoretically grow anywhere to $1.5M to $4M, in today's dollars. More than likely in the $2-$3M range. That could afford you anywhere between $60k and $120k annually depending on various assumptions, plus whatever social security and pensions you may receive. Is that enough for retirement? Only you can answer that.
am
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Joined: Sun Sep 30, 2007 9:55 am

Re: When is enough enough?

Post by am »

Normchad wrote: Sun Aug 23, 2020 4:44 pm You’re doing fantastic, in terms of net worth and age.

Take just what you have today, and project it out to see how much it will be when you retire. You might not need to save another penny ever.

Since you’ve done such a good job, you do have lots of flexibility here. I’m in a similar situation. And I’m definitely loosening up on spending.

For example, I had thought I’d been going on nice vacations. Then I learned via another thread that my annual vacation spending is very low compared to others. So maybe I will start taking “once in a lifetime” type vacations, annually.
Not saving another penny at 44 makes me nervous. Projections into the future make me uncomfortable as well. Who know what returns will be in the future?
flyingaway
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Re: When is enough enough?

Post by flyingaway »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm
Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.
For a family with $375k income, maximum contribution to 401(k) should just be a tiny fraction of it. I don't know where does your other money go?
Seasonal
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Re: When is enough enough?

Post by Seasonal »

delamer wrote: Sun Aug 23, 2020 4:49 pm
crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
The OP doesn’t have anything close to $2 million in retirement accounts. Re-read his post.
Also, even $2 million wouldn't come close to the top 1% of US net worth. See https://dqydj.com/top-one-percent-united-states/
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wander
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Re: When is enough enough?

Post by wander »

Just ask yourself a serious question: Why do I work? or What do I work for?
Outer Marker
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Re: When is enough enough?

Post by Outer Marker »

I agree - you’ve made and saved plenty. Enjoy it. Though, with $375k in income, I don’t see why you can’t max out your tax advantaged accounts and still live the good life. Just don’t start collecting Ferrias or develop a taste for caviar and rare truffles. Btw, ski vacations in summer are awsome. Check out Chile once covid is over.
RickyAZ
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Re: When is enough enough?

Post by RickyAZ »

What are you saving up for? You appear to be well ahead of where you need to be for a very comfortable retirement. There are some things you can do now that you're not going to be able to do when you retire: the kids will have left home, started their own lives, etc. Maybe you want to climb Kilimanjaro -- easier to do while you're younger. Your plan to live on your wife's healthcare sounds great except she may not want to work when the kids are off to college in 10 years The one with the biggest pile doesn't always win. Cheers
Normchad
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Re: When is enough enough?

Post by Normchad »

am wrote: Sun Aug 23, 2020 5:00 pm
Normchad wrote: Sun Aug 23, 2020 4:44 pm You’re doing fantastic, in terms of net worth and age.

Take just what you have today, and project it out to see how much it will be when you retire. You might not need to save another penny ever.

Since you’ve done such a good job, you do have lots of flexibility here. I’m in a similar situation. And I’m definitely loosening up on spending.

For example, I had thought I’d been going on nice vacations. Then I learned via another thread that my annual vacation spending is very low compared to others. So maybe I will start taking “once in a lifetime” type vacations, annually.
Not saving another penny at 44 makes me nervous. Projections into the future make me uncomfortable as well. Who know what returns will be in the future?
A lot of people feel that same way. It’s mostly just an exercise to see where you are.

But, if 2.2M at 44 isn’t good enough, then it might also be true that saving any more is futile. That would suggest negative real returns over a long time.

If that’s the future, the best course of action might be to spend it now. After all, I go lots of funerals for people that didn’t make it to 60.

Like I said, I’m in a similar boat. And truthfully, I still do save a lot. But saving isn’t my motivation, it’s just that my spending doesn’t consume all'of my income. I would be fine mentally if I never saved another penny.
am
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Re: When is enough enough?

Post by am »

Normchad wrote: Sun Aug 23, 2020 5:14 pm
am wrote: Sun Aug 23, 2020 5:00 pm
Normchad wrote: Sun Aug 23, 2020 4:44 pm You’re doing fantastic, in terms of net worth and age.

Take just what you have today, and project it out to see how much it will be when you retire. You might not need to save another penny ever.

Since you’ve done such a good job, you do have lots of flexibility here. I’m in a similar situation. And I’m definitely loosening up on spending.

For example, I had thought I’d been going on nice vacations. Then I learned via another thread that my annual vacation spending is very low compared to others. So maybe I will start taking “once in a lifetime” type vacations, annually.
Not saving another penny at 44 makes me nervous. Projections into the future make me uncomfortable as well. Who know what returns will be in the future?
A lot of people feel that same way. It’s mostly just an exercise to see where you are.

But, if 2.2M at 44 isn’t good enough, then it might also be true that saving any more is futile. That would suggest negative real returns over a long time.

If that’s the future, the best course of action might be to spend it now. After all, I go lots of funerals for people that didn’t make it to 60.

Like I said, I’m in a similar boat. And truthfully, I still do save a lot. But saving isn’t my motivation, it’s just that my spending doesn’t consume all'of my income. I would be fine mentally if I never saved another penny.
I am about that age with similar savings. I work hard and it’s stressful. I always wonder if it’d be better to just work as little as possible to maybe save a fraction and cover expenses.

I have a feeling that when I’m 60+ looking back, I’ll say that I wish I had done that. But I have an uneasy feeling about giving up so much income and benefits. I really like having more than we need and building wealth, Maybe it’s because I grew up poor. Don’t know. I will probably regret it later on (assuming I make it).
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Toons
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Location: Hills of Tennessee

Re: When is enough enough?

Post by Toons »

When?
For Me and my better half
It was when we reached the point
that we could wake up in the morning
And do what we pleased with our time.
To borrow from Bob Brinker's

"Land Of Critical Mass"

"A state of freedom from worry and anxiety about money due to the accumulation of assets which make it possible to live your life as you choose without working if you prefer not to work or just working because you enjoy your work but don't need the income"

:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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onthecusp
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Re: When is enough enough?

Post by onthecusp »

So you plan to continue working and want a handle on when you can slow down on saving.

Spending a lot more now might make it hard to adjust to less in retirement. You could do that, 2MM plus pension and health care means you won't be poor.

If maintaining a constant spending ability through retirement is important you could look at it this way.
Using the 4% rule your 2MM is currently worth 80,000 a year in retirement.
Add the teacher pension or 45,000.
Add health care value, I don't know but say 10,000.
Not clear on if you get a pension or social security, lets say max social security at 70 currently around 35,000
That is a total income of 170,000.

Seems to me that is close to what you could very comfortably spend now and expect to gradually increase faster than inflation into the future. As savings and returns increase the nest egg the 4% will go up. As social security and pension inflation adjustments take place those will increase. Splurge a little more this year or that, spend it now instead of later that is ok. That is the decision only you and your family can make.
Katietsu
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Re: When is enough enough?

Post by Katietsu »

delamer wrote: Sun Aug 23, 2020 4:59 pm I sympathize with your desire to live life today, and wish we had done more of the activities that you describe with our kids.

However, what struck me about your post was the vagueness of the numbers.

You’d be well-served to come up with a list of specific trips, experiences, and other goals that you want to achieve. Then assign a timeline and cost to each item on the list. Once that’s done, figure out how much you need to set aside to cover those costs.

I admit that the idea of “just park it until something comes up we want to do or buy” mildly offends my sensibilities. :?

I agree that the OP comes off as more of a generalized emotional expression than the result of a purposeful decision on the value of spending.

Remember that the more you spend, the more you need to save to maintain the same lifestyle.

Remember that you are teaching your children values with your spending. You are also instilling expectations. I recal reading a few times on these forums that high income individuals moderate their vacations so that their kids will not grow up appalled by coach seats.


We have such a small slice of your life here. You and your spouse can reflect on the proper balance. I suspect it is somewhere in the middle.

Couldn’t help but wonder if the half million dollar vacation home was a good investment if you would prefer the travel alluded to in your post.
Topic Author
DoubleComma
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Joined: Sun Aug 23, 2020 2:23 pm

Re: When is enough enough?

Post by DoubleComma »

am wrote: Sun Aug 23, 2020 5:20 pm
Normchad wrote: Sun Aug 23, 2020 5:14 pm
am wrote: Sun Aug 23, 2020 5:00 pm
Normchad wrote: Sun Aug 23, 2020 4:44 pm You’re doing fantastic, in terms of net worth and age.

Take just what you have today, and project it out to see how much it will be when you retire. You might not need to save another penny ever.

Since you’ve done such a good job, you do have lots of flexibility here. I’m in a similar situation. And I’m definitely loosening up on spending.

For example, I had thought I’d been going on nice vacations. Then I learned via another thread that my annual vacation spending is very low compared to others. So maybe I will start taking “once in a lifetime” type vacations, annually.
Not saving another penny at 44 makes me nervous. Projections into the future make me uncomfortable as well. Who know what returns will be in the future?
A lot of people feel that same way. It’s mostly just an exercise to see where you are.

But, if 2.2M at 44 isn’t good enough, then it might also be true that saving any more is futile. That would suggest negative real returns over a long time.

If that’s the future, the best course of action might be to spend it now. After all, I go lots of funerals for people that didn’t make it to 60.

Like I said, I’m in a similar boat. And truthfully, I still do save a lot. But saving isn’t my motivation, it’s just that my spending doesn’t consume all'of my income. I would be fine mentally if I never saved another penny.
I am about that age with similar savings. I work hard and it’s stressful. I always wonder if it’d be better to just work as little as possible to maybe save a fraction and cover expenses.

I have a feeling that when I’m 60+ looking back, I’ll say that I wish I had done that. But I have an uneasy feeling about giving up so much income and benefits. I really like having more than we need and building wealth, Maybe it’s because I grew up poor. Don’t know. I will probably regret it later on (assuming I make it).

@ AM - you have exactly summarized where these thoughts are coming from. I tell everyone my next job will be seasonal work at the ski resort loading lifts in the winter and at the marina pumping fuel in the summer. They always laugh, but I'm serious. I "think" I would love to get off corp ladder and simply trade hours for dollars in a job that is 100% left behind at the end of the shift.

My wife thinks I couldn't do it. She thinks after so many years of running various businesses and teams I would drive myself crazy doing the same simple task each day.
Topic Author
DoubleComma
Posts: 47
Joined: Sun Aug 23, 2020 2:23 pm

Re: When is enough enough?

Post by DoubleComma »

flyingaway wrote: Sun Aug 23, 2020 5:05 pm
DoubleComma wrote: Sun Aug 23, 2020 4:16 pm
Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.
For a family with $375k income, maximum contribution to 401(k) should just be a tiny fraction of it. I don't know where does your other money go?
Fair question...

This income has existing since about 2017. DW took a couple years off, returning to the classroom in 2017 School Year. At the same time I received a promotion which helped too.

Specifically where did the money go. We built the primary residence in 2015; typical 20% down and then paid cash to landscape. After which we focused on paying it off, which was completed in June 2019.

The second home started as a condo in April 2017. We sold that and upgraded to the current second home in Nov 2019. We did a few differed maintenance items on the second home and a couple upgrades for cash and up until very recently we were focusing on paying it off as well. Since the refi we have backed off the desire to pay off that house and have started thinking about what our next goal/plan should be. Hence this question today.
Topic Author
DoubleComma
Posts: 47
Joined: Sun Aug 23, 2020 2:23 pm

Re: When is enough enough?

Post by DoubleComma »

I'm reading everyone's responses and appreciate it them so much. Its very difficult to answer each question, but everyone is giving us a lot to think about.

Stopping savings isn't an option. Likely will continue to max retirements accounts.

Struggling to find a balance that works for us. What I want is likely an over pivot, but its becoming clear that I need to make some adjustments to find harmony.
miket29
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Re: When is enough enough?

Post by miket29 »

As I add it up the OP has about $1.3 million saved and owns 2 homes. Assuming no downsizing or selling the vacation home, this is the amount they'd have to draw down for expenses if they start drawing down relatively soon. At 4% that would be about $50K/yr pre-tax, If you go by the "3% is the new 4%" then the portfolio can supply about $40K/yr. By waiting it has a chance to grow. If they wait to use any of the savings for about 15 years until the wife retires from teaching it would have grown to about $3 million with a 6% rate of return, about $2.3 million with a 4% return, and more than $4 million with a 8% return.
Last edited by miket29 on Sun Aug 23, 2020 5:59 pm, edited 1 time in total.
Topic Author
DoubleComma
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Re: When is enough enough?

Post by DoubleComma »

delamer wrote: Sun Aug 23, 2020 4:59 pm I sympathize with your desire to live life today, and wish we had done more of the activities that you describe with our kids.

However, what struck me about your post was the vagueness of the numbers.

You’d be well-served to come up with a list of specific trips, experiences, and other goals that you want to achieve. Then assign a timeline and cost to each item on the list. Once that’s done, figure out how much you need to set aside to cover those costs.

I admit that the idea of “just park it until something comes up we want to do or buy” mildly offends my sensibilities. :?
Thank you for your response.

Understand 100% what you are saying. It does feel selfish, and a bit of a waste, thinking about these things. Part of me says capitalize on this earning potential now it could be gone tomorrow, while the other part says I'll never get this time back and all the various jokes about what people don't say on their death bed.

What I'm going to type next is probably going to "seriously offend your sensibilities", admittedly I feel like a Veruca Salt typing this next bit....

Your suggestion about making a list and a budget is probably very good advice...but to be honest that is what I want to avoid. I don't want over engineer life anymore. I want to live in the moment, do what I want when I want. Maybe what I need to do is get more aggressive for 5-6 more years before unleashing my inner Veruca.
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whodidntante
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Re: When is enough enough?

Post by whodidntante »

People in industrialized nations are now living longer but I have seen quite a few people die early. Some I was close to. And there are a lot of people who become disabled each year due to injury or disease. A simple foot injury can be fatal or life altering for someone in their 70s. Age is the main risk factor for many life altering or terminal illnesses. The risk of getting cancer increases 100x at age 50 and 1000x at age 70. Interestingly, it declines again by 90. My presumption is that other causes of death drown it out.

You've done a good job accumulating assets so I think it's fine to back off a bit unless you have dreams of stopping work soon. I probably save less as a percentage than most of the regulars here, preferring to pull spending on experiences forward in life. I've got one of those world maps with pushpins in it to mark the places I have been. It's busy. I also bought my first new car for myself four years ago, which is not something that builds wealth at all, but I felt like I could afford it. I also have a Harley that I bought new. I eat out a lot. I do not budget, and I don't have various buckets of money earmarked for various purposes. Within reason, I spend when I want to spend. In order to save, I tend to focus more on income than spending. It works for me.
Xrayman69
Posts: 602
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Re: When is enough enough?

Post by Xrayman69 »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm Long time lurker and really appreciate this fantastic community. I've learned a tremendous amount from everyone here, but I have a question I have been struggling with that admitted is a little non-Boglehead in nature.

BLUF -- How much in actual dollars should one save annually?

What I'm struggling with is the desire to "live in the moment" vs, having a secure retirement.

In combination with the pandemic, a couple things have me reevaluating goals; the loss of DW's father at age 70 and my mother (72) having a terminal diagnosis that means she might reach 75 (maybe). I'm considering stepping back the savings ratea lot and encouraging lifestyle creep, in order to generate more experiences as a family today opposed to trying to accumulate everything for later.

Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.

This is a serious question, please do not respond with how much do I want saved in retirement. I kind of think I might have enough already but then I’m sure the wisdom of this community will show me what I’m missing.
Saving and living are not mutually exclusive. Excessive spending as well as excessive saving at the cost of joy in life and ones family is bad.

You and your family are comfortable and not at risk for need. You are now in the sweet spot and have the Lucerne of being able to define purpose of work as opposed to need of work.

Reflect on your passions and joys, give back and tell yourself its ok to enjoy life and not feel “guilty”

Save what is optimal to get free money from match and the tax advantageous accounts as this also is “free money”. Your taxable accounts build up if not needed for other reasonable lifestyle accommodations.

No guilt and enjoy. It’s OK.
crazygrow
Posts: 168
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Re: When is enough enough?

Post by crazygrow »

delamer wrote: Sun Aug 23, 2020 4:49 pm
crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
The OP doesn’t have anything close to $2 million in retirement accounts. Re-read his post.
Ok so I read it too quickly. Still doesn’t change my stance. Having a $2m net worth in your mid 40s puts you in an amazing place in life.

Only on a board like bogleheads do people feel like they have failed life if they don’t have an eight digit retirement account which they probably won’t even spend before they die. Remember that the majority of the world has zero in retirement (and never will) and a good portion of the rest are just hoping to get by on government programs and what little they put away.

The average net worth for people in the 55-64 age range is under 200k in the US and the average net worth of retirees is like $70k.
flyingaway
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Re: When is enough enough?

Post by flyingaway »

miket29 wrote: Sun Aug 23, 2020 5:52 pm As I add it up the OP has about $1.3 million saved and owns 2 homes. Assuming no downsizing or selling the vacation home, this is the amount they'd have to draw down for expenses if they start drawing down relatively soon. At 4% that would be about $50K/yr pre-tax, If you go by the "3% is the new 4%" then the portfolio can supply about $40K/yr. By waiting it has a chance to grow. If they wait to use any of the savings for about 15 years until the wife retires from teaching it would have grown to about $3 million with a 6% rate of return, about $2.3 million with a 4% return, and more than $4 million with a 8% return.
The problem is, if they start spending all their $375k annual income, they need about $9 million at retirement (minus differences in taxes) to support the lifestyle, even if there is no inflation and no increase in that $375k income.
Wrench
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Re: When is enough enough?

Post by Wrench »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm "...in order to generate more experiences as a family today opposed to trying to accumulate everything for later".
My wife and I raised three kids who have all flown the coop and are all doing very well. My observation is the most valuable "experience" you can give your children and your family is your time. We went to every swim meet, school event, baseball game, band concert, etc. for all three of our children. I took time from my work to coach my kids' swim teams, from age ~5 all through high school. In that role, I observed many kids whose parents just never showed up and though those kids never admitted it, I could see they were heartbroken. We did take family vacations, but the most valuable thing was just being there for them always, every day, in all things. If you want to spend money on things, you certainly have the financial resources to do so. But IMHO, the time and energy you devote to your children and family every day will reap benefits far beyond any thing you buy or any "vacation experience" you purchase.

Wrench
Scooter57
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Re: When is enough enough?

Post by Scooter57 »

You are onto something here. Two people I knew well worried a lot about how they would fund their retirements as they had left highly paid corporate jobs in their 40s to pursue modestly successful but modestly paying careers in the arts that they loved. Neither had any history of health issues in their 50s. But one got a sudden diagnosis of cancer that killed them in six months at 59 and the other suffered a fatal aneurysm at 61. It was so good for those of us they left behind to know that they hadn't postponed writing those well reviewed books and giving those locally appreciated comcerts in favor of slogging away at dull jobs saving for a retirement that never came.

People who frequent this forum tend to be obsessed with saving huge amounts of money and being terrified of not having enough some distant day. I am in my 70s and know enough old friends who live comfortably on their social security checks alone, thanks to the strong network of friends and family they have built over the years to suspect that putting your resources into strengthening those family bonds is a far better approach than saving every penny and not having those experiences when your kids are young and impressionable.

At a certain point as you grow old no matter how much money you have, nothing takes the place of loving children or close neighbors. The assisted living places are full of very wealthy people who did not build that kind of support system and they are mostly very lonely.
visualguy
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Re: When is enough enough?

Post by visualguy »

Scooter57 wrote: Sun Aug 23, 2020 6:41 pm You are onto something here. Two people I knew well worried a lot about how they would fund their retirements as they had left highly paid corporate jobs in their 40s to pursue modestly successful but modestly paying careers in the arts that they loved. Neither had any history of health issues in their 50s. But one got a sudden diagnosis of cancer that killed them in six months at 59 and the other suffered a fatal aneurysm at 61. It was so good for those of us they left behind to know that they hadn't postponed writing those well reviewed books and giving those locally appreciated comcerts in favor of slogging away at dull jobs saving for a retirement that never came.
You're describing a possible, but unlikely scenario. It is rare for people with no history of health issues in their 50s to die of illness in their late 50s/early 60s. It happens, but it's rare. They are much more likely to live for at least another couple of decades. Similarly, it is rare to possess a talent for writing or music or some other art that one can focus on after retirement from a corporate job. Sure, if you have that, it changes the picture, but most of us don't, unfortunately.
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Watty
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Re: When is enough enough?

Post by Watty »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s.
You have almost a quarter of a million dollars between your cash and your taxable account. If you decide to spend more then you could spend money out of those accounts but still max out your tax advantaged accounts.

With a paid off house it looks like your only major expense is the vacation house so with your income I don't see any reason that you wouldn't have plenty of money to spend even if you are maxing out all your tax advantaged accounts.

You might want to post more of your budget since it sounds like there may be something else going on with where your money is going to.

There are several variations to a saying, "You can do anything you want but not everything you want."
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1789
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Re: When is enough enough?

Post by 1789 »

Assuming you can be gone around 70s rather than 100 years old will help you to figure this out. Don't ask BHs, most of them think and dream to live around 90-100 years. Don't believe statistics as its a pure lie. My assumption is always assuming i am in the lower portion of those statistics even thou i dont have any any chronic disease. i should probably be gone before taking RMD, somewhere around 70s if not before then. Maybe surprisingly i could live longer than that, who knows. Now i can spend my money on my hobbies and family vacations and etc... and one of the most enjoyable part of life is i don't need to calculate how much would i save if i wouldn't drink that dang latte.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
Wricha
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Re: When is enough enough?

Post by Wricha »

crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
[/
Last edited by Wricha on Sun Aug 23, 2020 7:00 pm, edited 1 time in total.
am
Posts: 3525
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Re: When is enough enough?

Post by am »

Scooter57 wrote: Sun Aug 23, 2020 6:41 pm You are onto something here. Two people I knew well worried a lot about how they would fund their retirements as they had left highly paid corporate jobs in their 40s to pursue modestly successful but modestly paying careers in the arts that they loved. Neither had any history of health issues in their 50s. But one got a sudden diagnosis of cancer that killed them in six months at 59 and the other suffered a fatal aneurysm at 61. It was so good for those of us they left behind to know that they hadn't postponed writing those well reviewed books and giving those locally appreciated comcerts in favor of slogging away at dull jobs saving for a retirement that never came.

People who frequent this forum tend to be obsessed with saving huge amounts of money and being terrified of not having enough some distant day. I am in my 70s and know enough old friends who live comfortably on their social security checks alone, thanks to the strong network of friends and family they have built over the years to suspect that putting your resources into strengthening those family bonds is a far better approach than saving every penny and not having those experiences when your kids are young and impressionable.

At a certain point as you grow old no matter how much money you have, nothing takes the place of loving children or close neighbors. The assisted living places are full of very wealthy people who did not build that kind of support system and they are mostly very lonely.
These are tough decisions not knowing how things will work out In the future. If we know that we are going to die near retirement age or before then it’s easy. Stop saving, do what you enjoy and live it up. I think it’s better to assume your going to live a long life and save appropriately. If your wrong, then it doesn’t matter to you.

I agree with you about relationships. But there is no guarantee in my opinion that your kids will be loving. It’s tough to have a lot of friends and close neighbors if your busy in your career and live in a suburban area where everyone is to themselves in their big houses.
am
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Re: When is enough enough?

Post by am »

Wricha wrote: Sun Aug 23, 2020 6:58 pm
crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
[/
Top 3% according to his age of 44 with 2 mil net worth and counting home equity.
EnjoyIt
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Re: When is enough enough?

Post by EnjoyIt »

Some advice from someone who has been going throw what you are but a bit ahead of you.

1) life is short so I agree you should enjoy it as much as reasonably possible.

2) time with friends is far more valuable than buying things.

3) Before you look at spending more, start with looking at the waste you currently have. Diverting money from there should be your first option.

4) next, as you begin adding some small bursts of lifestyle creep. Do it slowly so as to get the most joy out of it. You go too fast and you will fizzle our. As you continue to build wealth keep loosening those pursestrings. The way we did it, was reaching financial milestones let us spend a bit more and experiences.

Good luck.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
Dottie57
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Re: When is enough enough?

Post by Dottie57 »

crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
I have no idea what the expenditures are. Or what amount of money would support the expenses. Do you know the expenses?
Trader Joe
Posts: 1990
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Re: When is enough enough?

Post by Trader Joe »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm Long time lurker and really appreciate this fantastic community. I've learned a tremendous amount from everyone here, but I have a question I have been struggling with that admitted is a little non-Boglehead in nature.

BLUF -- How much in actual dollars should one save annually?

What I'm struggling with is the desire to "live in the moment" vs, having a secure retirement.

In combination with the pandemic, a couple things have me reevaluating goals; the loss of DW's father at age 70 and my mother (72) having a terminal diagnosis that means she might reach 75 (maybe). I'm considering stepping back the savings ratea lot and encouraging lifestyle creep, in order to generate more experiences as a family today opposed to trying to accumulate everything for later.

Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.

This is a serious question, please do not respond with how much do I want saved in retirement. I kind of think I might have enough already but then I’m sure the wisdom of this community will show me what I’m missing.
You have significant financial debt. I could never sleep at night with your amount of debt.

Pay it off and then re-assess your financial situation.
Topic Author
DoubleComma
Posts: 47
Joined: Sun Aug 23, 2020 2:23 pm

Re: When is enough enough?

Post by DoubleComma »

Trader Joe wrote: Sun Aug 23, 2020 8:21 pm
DoubleComma wrote: Sun Aug 23, 2020 4:16 pm Long time lurker and really appreciate this fantastic community. I've learned a tremendous amount from everyone here, but I have a question I have been struggling with that admitted is a little non-Boglehead in nature.

BLUF -- How much in actual dollars should one save annually?

What I'm struggling with is the desire to "live in the moment" vs, having a secure retirement.

In combination with the pandemic, a couple things have me reevaluating goals; the loss of DW's father at age 70 and my mother (72) having a terminal diagnosis that means she might reach 75 (maybe). I'm considering stepping back the savings ratea lot and encouraging lifestyle creep, in order to generate more experiences as a family today opposed to trying to accumulate everything for later.

Our net worth today is ~$2M

Married Couple ... 44 y/o
Three Kids ... 14, 12, 8

Household Income - $375k+ AGI
t401k/t rollover IRA combined - $900k (80/20)
Roth401k - $75k (newly available)
529 - $90k
Taxable Brokerage - $90k (80/20)
Cash/CD - $150k

Primary Home $500k w/ zero mortgages
Second Vacation Home $550k w/$400k mortgage 30 year FRM @ 2.625 (recent refi thanks to what I learned here)

DW is a teacher w/ a pension that will provide 2% per year of service and 100% vested at age 50. We anticipate her working till 60, 25 years, which will provide ~$45k annual income +COLA adjustments (today’s $). This position will also provide lifetime health insurance for both of us.

As we witness the demise of our parents, we are starting to dream of pulling the future vision to day. That is one of ski vacations in the winter, tropical vacations in the summer, travel domestically and abroad to expose our kids to the many amazing things and cultures that are out there. We have an older wake boat, but would love to upgrade to a new/newer boat just to have something nicer. On one hand all of these wants seem frivolous but on the other hand what good is money if you aren’t using it when you can.

What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s. This is a very low saving rate as a percentage, but $37k is still a lot of money…far more than most. Of course we will still have more money coming in each month that we could spend, but instead of routing that to pay off mortgages or buy more index funds, I think I would just park it until something comes up we want to do or buy.

This is a serious question, please do not respond with how much do I want saved in retirement. I kind of think I might have enough already but then I’m sure the wisdom of this community will show me what I’m missing.
You have significant financial debt. I could never sleep at night with your amount of debt.

Pay it off and then re-assess your financial situation.
A single $400k mortgage is “significant financial debt” ?

I thought our debt service was quite low, especially as a ration to income and/or assets.

I guess I have something more to learn. Most of what I read on here are folks using debt to leverage positions. Especially home debt at low rates to free more money for index investing.
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onthecusp
Posts: 815
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Re: When is enough enough?

Post by onthecusp »

miket29 wrote: Sun Aug 23, 2020 5:52 pm As I add it up the OP has about $1.3 million saved and owns 2 homes. Assuming no downsizing or selling the vacation home, this is the amount they'd have to draw down for expenses if they start drawing down relatively soon. At 4% that would be about $50K/yr pre-tax, If you go by the "3% is the new 4%" then the portfolio can supply about $40K/yr. By waiting it has a chance to grow. If they wait to use any of the savings for about 15 years until the wife retires from teaching it would have grown to about $3 million with a 6% rate of return, about $2.3 million with a 4% return, and more than $4 million with a 8% return.
In my similar analysis I probably gave too much credit for the home value without pointing out that selling one at retirement would be needed to support my broad assumptions. That 400,000 mortgage on the vacation home will take a lot to pay off in the next 15 years too. Not to mention taxes and upkeep. OP is living the life with with two homes and doing a very nice job of it. But it is not clear that drastically slowing savings is going to come out rosy when the expectations seem so high.
delamer
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Re: When is enough enough?

Post by delamer »

crazygrow wrote: Sun Aug 23, 2020 6:35 pm
delamer wrote: Sun Aug 23, 2020 4:49 pm
crazygrow wrote: Sun Aug 23, 2020 4:40 pm
Dottie57 wrote: Sun Aug 23, 2020 4:33 pm I do encourage experiences. But I would still max workplace retirement accounts. Additionally I would look at ALL expenses and work to reduce them so you can go on bigger vacations with family.

It looks to me like you are doing well, but don’t count your retirement nest eggs before they hatch. You don’t know what your future will bring.

P.S. i would sell the vacation home and spend the money on vacations.
Only on bogleheads is $2m in retirement accounts as still needing to worry about their retirement nest eggs still hatching - they’ve more than hatched and puts him in the top 1%!
The OP doesn’t have anything close to $2 million in retirement accounts. Re-read his post.
Ok so I read it too quickly. Still doesn’t change my stance. Having a $2m net worth in your mid 40s puts you in an amazing place in life.

Only on a board like bogleheads do people feel like they have failed life if they don’t have an eight digit retirement account which they probably won’t even spend before they die. Remember that the majority of the world has zero in retirement (and never will) and a good portion of the rest are just hoping to get by on government programs and what little they put away.

The average net worth for people in the 55-64 age range is under 200k in the US and the average net worth of retirees is like $70k.
Show me one post on this forum where someone says that they’ll be a failure without a $10-million-plus retirement account.

This is a forum for people who are interested in investing and value financial security.

If that is irrelevant to most people, so what?

Dog groomers’ forums have no relevance to my life. So I don’t go on those forums and post comments that the majority of American households don’t have dogs,
Last edited by delamer on Sun Aug 23, 2020 9:45 pm, edited 1 time in total.
KlangFool
Posts: 17759
Joined: Sat Oct 11, 2008 12:35 pm

Re: When is enough enough?

Post by KlangFool »

DoubleComma wrote: Sun Aug 23, 2020 4:16 pm
Household Income - $375k+ AGI


What I’m considering is reducing my 401k to the minimum level to get full company match, which I estimate will still be $25k in annual contribution. As well I’ll continue to contribute $12k annually to 529s.
DoubleComma,

Your gross income is 375K. You feel like you need to spend more and only save 37K per year.

1) Why?

2) How much do you spend now?

3) How much do you save now?

The problem here is at your income/tax level, your additional expense of not maxing the Trad 401K is subjected to incredible amount of taxes. You may not be getting the most value out of your money.

My recommendation is to max up your Trad 401K even if you want to spend more.

KlangFool
orhkaf
Posts: 88
Joined: Tue Feb 13, 2018 12:39 am

Re: When is enough enough?

Post by orhkaf »

You’re in pretty good shape.

Kids start to get expensive in their late teens (college, cars, etc...)

I’d keep at it in your case until 55 or so and pull the trigger.


Nice work.
delamer
Posts: 10535
Joined: Tue Feb 08, 2011 6:13 pm

Re: When is enough enough?

Post by delamer »

DoubleComma wrote: Sun Aug 23, 2020 5:58 pm
delamer wrote: Sun Aug 23, 2020 4:59 pm I sympathize with your desire to live life today, and wish we had done more of the activities that you describe with our kids.

However, what struck me about your post was the vagueness of the numbers.

You’d be well-served to come up with a list of specific trips, experiences, and other goals that you want to achieve. Then assign a timeline and cost to each item on the list. Once that’s done, figure out how much you need to set aside to cover those costs.

I admit that the idea of “just park it until something comes up we want to do or buy” mildly offends my sensibilities. :?
Thank you for your response.

Understand 100% what you are saying. It does feel selfish, and a bit of a waste, thinking about these things. Part of me says capitalize on this earning potential now it could be gone tomorrow, while the other part says I'll never get this time back and all the various jokes about what people don't say on their death bed.

What I'm going to type next is probably going to "seriously offend your sensibilities", admittedly I feel like a Veruca Salt typing this next bit....

Your suggestion about making a list and a budget is probably very good advice...but to be honest that is what I want to avoid. I don't want over engineer life anymore. I want to live in the moment, do what I want when I want. Maybe what I need to do is get more aggressive for 5-6 more years before unleashing my inner Veruca.
So ... I have no idea who Veruca Salt is.

Anyway, I appreciate your position on over planning. I’ll just leave you with this thought — with 3 kids and 2 working parents, spontaneity isn’t going to get you many significant, life-enhancing adventures. Planning is tiresome, for sure, but unavoidable at certain times in your life.

Good luck!
chrisam314
Posts: 89
Joined: Tue Jun 28, 2016 9:22 pm

Re: When is enough enough?

Post by chrisam314 »

Hi OP - I'm sorry to hear about your mother and father in law. I'm sure that is extremely stressful, and raising 3 children is no walk in the park. Make sure you cut yourself some slack for dealing with this level of stress.

Financially speaking your making what... ~19K a month after tax (40% of gross assumed for taxes and deductions) and your monthly debt service is ~2K a month. Which is insane because thats only for a vacation home. Your property tax and homeowners insurance is probably a substantial 'hidden fee' that you just kind of deal with though. Something to think about if you want to keep the second home long-term.

So the good news is that even if you assume a generous amount feeding and entertaining the family you should be able to sock away like ~80K to ~100K a year. Gives you lots of flexibility.

So where's all the money going? You may want to build a ground up budget. Not to constrain spending, more so just to see where its all going. Might give you a better idea of what dollars actually give the family utility vs. just flying out the door.

Idea - maybe get rid of the vacation home (and its associated mortgage, property tax, and homeowners insurance), take the equity from that (125K might be less after taxes, don't know what your basis is) and sock that and the ~100K a year surplus into a taxable account for a few years. Might give you the flexibility to retire early and go work a ski lift or whatever you want to do instead.

Dropping every dollar you have into home equity and 401k's won't let you kick the corporate grind early. Assuming a low risk asset allocation (like 60/40) and health insurance (through your wifes work), you can get a point where you have enough in taxable to say adios if thats what you want.

Of course if all three of your kids are going to private school its not cheap (even if DW is a teacher there) and you let all 3 go to private colleges (without scholarships) then the economics change substantially.
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