How much money do you want to retire?

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bltn
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Re: How much money do you need to retire?

Post by bltn » Sun Jan 27, 2019 12:19 am

marcopolo wrote:
Sat Jan 26, 2019 5:34 pm
bltn wrote:
Sat Jan 26, 2019 4:15 pm
marcopolo wrote:
Fri Jan 25, 2019 9:24 pm
HomerJ wrote:
Fri Jan 25, 2019 9:15 pm
visualguy wrote:
Fri Jan 25, 2019 11:30 am


Probably more like 3.2% SWR for early retirement. Also, you need to reserve money for LTC for the first person to need it (the second can rely on selling the house and remaining assets), money for renovations, and other big ticket items. Say you have $4M left after that (probably less, frankly), you're talking $128K pre-tax per year. After income taxes, property taxes in HCOL, and health insurance for a couple, you have less than $70K left. Now you have utilities, food, insurance, cars, travel, gadgets, pets, repairs, etc. I'm grounded in the reality of my bills and cost of living - that's the only reality that matters in terms of my ability to retire.
We've argued about this before.

You can be 100% correct about your bills. You, indeed, would need to make painful decisions with only $5 million.

A very large majority of the rest of us would not have to make painful decisions. We would get everything we wanted and then some.

I submit most of your problems would disappear as soon as you moved away from the HCOL area. That's the only thing holding you back from retirement.

If working an extra 10-15 years to afford the HCOL area is worth it to you, then it's worth it to you.
I think the impact of HCOL area is a bit overstated for retirees. Most retirees have a paid off house. The biggest contributer to HCOL is the cost of housing. If that is already covered, the spread is quite a bit smaller. Sure, other things are still more expensive, but the impact is not as big as some make it out to be.

A paid off house and $5M would support a pretty nice lifestyle even in a HCOL area, IMHO. But, I can see how others have greater wants (needs are more than covered) Can you have everything you want? no. But , that is still a problem, at 10M or 20M.
The housing costs that don t go away with a paid off mortgage are the taxes and insurance. Both much higher in a HCOL area.
The taxes are higher in a HCOL area, income taxes in particular. This pushes all costs up.
I agree that a move to a MCOL area would mitigate enough expenses to afford more vacation time or nicer cars or whatever.
I m not sure that a move away from a HCOL area would be categorized as a sacrifice so much as a change.
But I submit that a 5 million dollar nest egg will support a pretty nice lifestyle in 95% of the country. If one hasnt submitted to lifestyle creep resulting in an unsustainable lifestyle. Including maintenance in retirement.
By the way,the notion that 10 million dollars in savings is needed for a comfortable retirement is absurd, even in this great forum community. This is not the kind of thing we should be teaching our younger forumites. Financial security is about lifestyle control as well as accumulation.
Well, OK. But, reading over my post, i don't recall saying housing costs go away. Did you see that somewhere?
What i said was that a big part of the difference between cost of living between areas is due to the cost of the house.
Just eliminating the difference between the mortgage on a $400k house and a $2M house narrows the required expense quite a bit, even if the taxes are and other expense are still quite different. Are you suggesting that is not the case?

As far as taxes on the house, I don't know if that is so clear cut. Many MCOL areas have higher property taxes than HCOL areas. The property tax on a $2M house in Hawaii is less that for a $400k house in Ohio, as an example. In California, if you have owned for a while (not uncommon for retirees) your effective tax rate can be relatively low due to prop 13. So, it does not necessarily follow housing taxes are higher in HCOL areas.

HCOL areas are high-cost for a reason, and you have to decide if you think they are worth the cost (i think many of them are).
I agree that housing costs are the major factor in the expenses of living in a HCOL area. Taxes are another reason for HCOL. Income taxes as well as property taxes. Does paying off a mortgage change a HCOL area to a MCOL area for an individual?

Having lived in HCOL, MCOL, and LCOL areas in the past, I enjoyed my time in all. Each has its advantages and shortcomings. To me, the HCOL area was not superior to the other two, just different. I m probably not sophisticated enough to appreciate the benefits of higher expenses in life for the most of the same amenities.

Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.

I believe retirement location is important in determining how much is needed for retirement. I don t believe that one must remain in a HCOL area if he wishes to retire comfortably a few years before FRA. It s a trade off.

visualguy
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Re: How much money do you need to retire?

Post by visualguy » Sun Jan 27, 2019 12:44 am

bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.

Rob1
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Re: How much money do you want to retire?

Post by Rob1 » Sun Jan 27, 2019 12:02 pm

Sometimes lost in the HCOLA vs MCOLA vs LCOLA debate is that for many the choice will be based on one’s network - family, friends, career associates...even casual acquaintances like knowing the owner at your favorite restaurant and having a trusted plumber.

I’m tempted to move to a lower COLA. However, the thought of leaving behide a network that took decades to build gives me pause. Partly for this reason, I’m semi-retired vs fully.

smitcat
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Re: How much money do you need to retire?

Post by smitcat » Sun Jan 27, 2019 12:15 pm

visualguy wrote:
Sun Jan 27, 2019 12:44 am
bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.
"The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California "
That would be accurate as long as you are not concerned with sea water temps all year round and the future potential for tsunamis, earthquakes, storms ,fires, and ARC rains.

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HomerJ
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Re: How much money do you need to retire?

Post by HomerJ » Wed Jan 30, 2019 1:06 pm

visualguy wrote:
Sat Jan 26, 2019 5:16 pm
bltn wrote:
Sat Jan 26, 2019 4:15 pm
I m not sure that a move away from a HCOL area would be categorized as a sacrifice so much as a change.
It's a huge sacrifice.

You leave your home area where your friends and other connections live.

HCOL areas are HCOL for a reason... Whatever makes them desirable-enough to be HCOL is something you lose by moving away. You can't say that there is no sacrifice in leaving, say, coastal CA, or NYC, etc.

The few areas in the US with a good year-round climate are HCOL. Moving from good climate to bad climate is a sacrifice.
Part of choosing a location is proximity to your job, and good schools for your children.

Both of those considerations disappear in retirement. One could move just 5-20 miles away and see a big change in expenses, and still get many of the advantages of living in that area.

As far as climate, one can EASILY own 2 (nicer) homes far cheaper than one home in the HCOL areas that require $5-$10 million to retire. This cheaper option allows one to enjoy good climate all year round as well, with a nice change of activities and scenery every 6 months. We plan to spend our summers and falls at the lake, and our winters and springs in Phoenix with the mountains and city life to explore.

We have family and friends in both places.

Or one could rent or travel during the poor climate months. Maybe instead of buying in Phoenix we could rent in the Caribbean or Mexico or Florida or even California for a few months in the winter.

Far cheaper than owning an $1 million small house in CA.

Not being tied to a job opens a lot of opportunities.

However, I 100% understand and agree that if your immediate current location is where you want to stay in retirement, then there's nothing wrong with working longer and saving more in order to afford the extra millions and millions of dollars to stay there in retirement.

But note that could be considered a sacrifice too.
Last edited by HomerJ on Wed Jan 30, 2019 2:19 pm, edited 1 time in total.
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The Wizard
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Re: How much money do you want to retire?

Post by The Wizard » Wed Jan 30, 2019 1:46 pm

HomerJ wrote:
Wed Jan 30, 2019 1:06 pm
...there's nothing wrong with working longer and saving more in order to afford the extra millions and millions of dollars to stay there in retirement.
Millions and millions???
How many centuries of retirement are we talking about???
Attempted new signature...

jharkin
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Re: How much money do you need to retire?

Post by jharkin » Wed Jan 30, 2019 2:11 pm

smitcat wrote:
Sun Jan 27, 2019 12:15 pm
visualguy wrote:
Sun Jan 27, 2019 12:44 am
bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.
"The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California "
That would be accurate as long as you are not concerned with sea water temps all year round and the future potential for tsunamis, earthquakes, storms ,fires, and ARC rains.
It also presupposes that everyone's definition of good climate is "warm and sunny"

Some people actually love the change of seasons, enjoy a crisp fall day, like snow and winter sports. For these people the monotony of every day being the exact same 75F is actually a negative.

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Re: How much money do you need to retire?

Post by jharkin » Wed Jan 30, 2019 3:55 pm

BlackStrat wrote:
Fri Jan 25, 2019 8:08 am
visualguy wrote:
Fri Jan 25, 2019 12:39 am
For example, I think that with $6M a couple retiring at 50 is fine assuming a non-extravagant lifestyle, and assuming not getting extremely unlucky, such as both getting a stoke and needing long-term care for decades or some such thing. Sure, $10M is even safer and allows for a better lifestyle, but it's hard to imagine $6M not being enough without some very unlikely (but admittedly not impossible) combination of bad events.

Once you go significantly lower than $6M then, yes, the risks feel fairly palpable, and the ability to maintain an upper-middle-class lifestyle is probably not quite there, particularly in a high-cost area.
I guess if you didn't qualify this with 'maintain an upper-middle-class lifestyle', this would be a depressing post and wouldn't offer much hope for most people.
I'd make that "upper class lifestyle" considering your typical middle class 50-60k household only earns 1-2MM total lifetime income over an entire 40 year career.

bltn
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Re: How much money do you need to retire?

Post by bltn » Wed Jan 30, 2019 9:54 pm

visualguy wrote:
Sun Jan 27, 2019 12:44 am
bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.
I see. ??!!? So a good climate, however most define it, mandates a high cost of living. But there can also be HCOL with bad climates. And good year round climates are coastal California and Hawaii. Where should we put Florida? East Texas coast ?
If climate is that important, one could move 50 miles outside of town or away from the coast and have great weather with less cost. And all the benefits of rural living. Uh oh. What did I say now?
.

nix4me
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Re: How much money do you want to retire?

Post by nix4me » Wed Jan 30, 2019 11:03 pm

$2.5M

visualguy
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Re: How much money do you need to retire?

Post by visualguy » Thu Jan 31, 2019 12:00 am

bltn wrote:
Wed Jan 30, 2019 9:54 pm
visualguy wrote:
Sun Jan 27, 2019 12:44 am
bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.
I see. ??!!? So a good climate, however most define it, mandates a high cost of living. But there can also be HCOL with bad climates. And good year round climates are coastal California and Hawaii. Where should we put Florida? East Texas coast ?
If climate is that important, one could move 50 miles outside of town or away from the coast and have great weather with less cost. And all the benefits of rural living. Uh oh. What did I say now?
.
Hot and very humid in Florida and East Texas coast, not to mention the storms - forget it.

You can't really escape the high cost in the areas I mentioned. If the climate is good year-round and the town/neighborhood is nice, it's very expensive - limited supply and a lot of demand. It doesn't sound like you really know these areas based on your "50 miles" comment, but if you can list nice inexpensive areas to live with good year-round weather in the US that would be very enlightening. I'm yet to encounter them, and I've spent most of my life in the (few) good-climate parts of the country, and traveled to all states and most metro areas.

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HomerJ
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Re: How much money do you need to retire?

Post by HomerJ » Thu Jan 31, 2019 12:39 am

visualguy wrote:
Thu Jan 31, 2019 12:00 am
bltn wrote:
Wed Jan 30, 2019 9:54 pm
visualguy wrote:
Sun Jan 27, 2019 12:44 am
bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.
I see. ??!!? So a good climate, however most define it, mandates a high cost of living. But there can also be HCOL with bad climates. And good year round climates are coastal California and Hawaii. Where should we put Florida? East Texas coast ?
If climate is that important, one could move 50 miles outside of town or away from the coast and have great weather with less cost. And all the benefits of rural living. Uh oh. What did I say now?
.
Hot and very humid in Florida and East Texas coast, not to mention the storms - forget it.

You can't really escape the high cost in the areas I mentioned. If the climate is good year-round and the town/neighborhood is nice, it's very expensive - limited supply and a lot of demand. It doesn't sound like you really know these areas based on your "50 miles" comment, but if you can list nice inexpensive areas to live with good year-round weather in the US that would be very enlightening. I'm yet to encounter them, and I've spent most of my life in the (few) good-climate parts of the country, and traveled to all states and most metro areas.
I can list dozens of nice inexpensive areas to live in with 6 months of good weather. So get two homes.

And two homes in two LCOL areas is still cheaper than one home in HCOL coastal CA. That's how expensive parts of CA are. I can buy TWO bigger nicer homes, pay two property tax bills, insure them both, furnish them both, pay utilities in both places, and still spend less.

(However, another option is to move 20-50 miles up or down the CA coast, isn't it? If you no longer care about commuting to a job or being in a good school district, could one find a less expensive home still near the coast, but farther away from the big cities?)
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visualguy
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Re: How much money do you need to retire?

Post by visualguy » Thu Jan 31, 2019 1:03 am

HomerJ wrote:
Thu Jan 31, 2019 12:39 am
I can list dozens of nice inexpensive areas to live in with 6 months of good weather. So get two homes.

And two homes in two LCOL areas is still cheaper than one home in HCOL coastal CA.

(However, another option is to move 20-50 miles up or down the CA coast, isn't it? If you no longer care about commuting to a job or being in a good school district, could one find a less expensive home still near the coast, but farther away from the big cities?)
A two-home lifestyle gets expensive actually when you factor in everything, and it seriously complicates your life, so it's a sacrifice. Also, these houses aren't likely to appreciate as much.

Real estate costs along the CA coast vary somewhat, of course, and some areas are more expensive than others. However, it's all still very expensive for a decent home in a decent location. The other problem is the property tax. You may buy a somewhat less expensive house, but get hit by even higher property tax bills because you were benefiting from Prop 13 in your previous house which had an assessed value below market.

If you can afford life there, the housing issue actually works for you, not against you because of appreciation. It's a good asset to have later on in life if needed for LTC, etc. You can view it as well-invested money. However, you do need to be able to afford it, of course.

longleaf
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Re: How much money do you want to retire?

Post by longleaf » Thu Jan 31, 2019 1:08 am

2.6m investable.

Alternatively, cash flow summing 100k today’s dollars from certain RE will suffice.
Frugality, indexing, time.

visualguy
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Re: How much money do you want to retire?

Post by visualguy » Thu Jan 31, 2019 1:19 am

longleaf wrote:
Thu Jan 31, 2019 1:08 am
2.6m investable.

Alternatively, cash flow summing 100k today’s dollars from certain RE will suffice.
Netting 100K/yr from RE is hard - it's truly running a business, not just owning a couple of rental units... I think it's awesome for people who can get there, but it's tough.

longleaf
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Re: How much money do you want to retire?

Post by longleaf » Thu Jan 31, 2019 1:27 am

visualguy wrote:
Thu Jan 31, 2019 1:19 am
longleaf wrote:
Thu Jan 31, 2019 1:08 am
2.6m investable.

Alternatively, cash flow summing 100k today’s dollars from certain RE will suffice.
Netting 100K/yr from RE is hard - it's truly running a business, not just owning a couple of rental units... I think it's awesome for people who can get there, but it's tough.
It is unlikely to be residential. I fully understand this concern, but luckily the framework is already in place.
Frugality, indexing, time.

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HomerJ
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Re: How much money do you need to retire?

Post by HomerJ » Thu Jan 31, 2019 10:17 am

visualguy wrote:
Thu Jan 31, 2019 1:03 am
HomerJ wrote:
Thu Jan 31, 2019 12:39 am
I can list dozens of nice inexpensive areas to live in with 6 months of good weather. So get two homes.

And two homes in two LCOL areas is still cheaper than one home in HCOL coastal CA.

(However, another option is to move 20-50 miles up or down the CA coast, isn't it? If you no longer care about commuting to a job or being in a good school district, could one find a less expensive home still near the coast, but farther away from the big cities?)
A two-home lifestyle gets expensive actually when you factor in everything, and it seriously complicates your life, so it's a sacrifice. Also, these houses aren't likely to appreciate as much.

Real estate costs along the CA coast vary somewhat, of course, and some areas are more expensive than others. However, it's all still very expensive for a decent home in a decent location. The other problem is the property tax. You may buy a somewhat less expensive house, but get hit by even higher property tax bills because you were benefiting from Prop 13 in your previous house which had an assessed value below market.

If you can afford life there, the housing issue actually works for you, not against you because of appreciation. It's a good asset to have later on in life if needed for LTC, etc. You can view it as well-invested money. However, you do need to be able to afford it, of course.
Good point about the property taxes when moving in CA. Makes people less mobile in-state.

Two houses can be a pain or a blessing. Nice to have a change of scenery and activities for some people. Our second home is a condo on a lake, which makes upkeep while away much easier (but of course then you have HOA fees - still cheap compared to CA real estate)

Another option is a single home with a great climate in a LCOL area 8 months of the year, then travel during the bad weather. You can rent some pretty amazing places for $3000 - $4000 a month, and $12,000 - $16,000 a year in rent even over 20 years is cheaper than buying CA real estate.

Not saying you're wrong to want to retire in CA... I'm just saying there ARE much cheaper options if you want nice climate 12 months out of the year.

One can achieve that particular goal without spending $1 million plus on housing in CA.

(But there are plenty of other reasons someone might want to stay in CA year-round - family and friends of course)
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zubinh
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Re: How much money do you want to retire?

Post by zubinh » Thu Feb 14, 2019 10:57 am

We want $2.5M liquid and have $2.0M (50% pre tax dollars 50% after tax) currently.

We are 46 and 50, no mortgage. DW will get $36k/yr pension in 5 years. I figure 3% WR ($75k) plus the $36K all pretax is more than enough (not including SS).

I've got 5 years to hustle and save that $500k....:)
Last edited by zubinh on Thu Feb 14, 2019 4:18 pm, edited 1 time in total.

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HomerJ
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Re: How much money do you need to retire?

Post by HomerJ » Thu Feb 14, 2019 3:15 pm

visualguy wrote:
Thu Jan 31, 2019 1:03 am
HomerJ wrote:
Thu Jan 31, 2019 12:39 am
I can list dozens of nice inexpensive areas to live in with 6 months of good weather. So get two homes.

And two homes in two LCOL areas is still cheaper than one home in HCOL coastal CA.

(However, another option is to move 20-50 miles up or down the CA coast, isn't it? If you no longer care about commuting to a job or being in a good school district, could one find a less expensive home still near the coast, but farther away from the big cities?)
A two-home lifestyle gets expensive actually when you factor in everything, and it seriously complicates your life, so it's a sacrifice. Also, these houses aren't likely to appreciate as much.

Real estate costs along the CA coast vary somewhat, of course, and some areas are more expensive than others. However, it's all still very expensive for a decent home in a decent location. The other problem is the property tax. You may buy a somewhat less expensive house, but get hit by even higher property tax bills because you were benefiting from Prop 13 in your previous house which had an assessed value below market.

If you can afford life there, the housing issue actually works for you, not against you because of appreciation. It's a good asset to have later on in life if needed for LTC, etc. You can view it as well-invested money. However, you do need to be able to afford it, of course.
Actually this part favors the two-house solution even more I'd think. A lot easier to sell one of two homes to raise money (for LTC or whatever) than to sell your one really expensive CA home and have to find a new place to live for the spouse.

And, of course, since the two homes are cheaper than the one expensive CA home, you'd actually have more in INVESTMENTS, so you'd be less likely to be strapped for cash late in retirement.
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ » Thu Feb 14, 2019 3:19 pm

zubinh wrote:
Thu Feb 14, 2019 10:57 am
We want $2.5M liquid and have $2.0M (50% retirement accounts 50% taxable) currently.

We are 46 and 50, no mortgage. DW will get $36k/yr pension in 5 years. I figure 3% WR ($75k) plus the $36K all pretax is more than enough (not including SS).

I've got 5 years to hustle and save that $500k....:)
Good news is even if you only make 3% a year from investments, that $2 million will grow to $2.32 million without you even saving another cent for the next 5 years.

So I'd say you are in pretty good shape :)
The J stands for Jay

zubinh
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Re: How much money do you want to retire?

Post by zubinh » Thu Feb 14, 2019 4:13 pm

HomerJ wrote:
Thu Feb 14, 2019 3:19 pm
zubinh wrote:
Thu Feb 14, 2019 10:57 am
We want $2.5M liquid and have $2.0M (50% retirement accounts 50% taxable) currently.

We are 46 and 50, no mortgage. DW will get $36k/yr pension in 5 years. I figure 3% WR ($75k) plus the $36K all pretax is more than enough (not including SS).

I've got 5 years to hustle and save that $500k....:)
Good news is even if you only make 3% a year from investments, that $2 million will grow to $2.32 million without you even saving another cent for the next 5 years.

So I'd say you are in pretty good shape :)
Well....thanks for making my day!!!!!

Bir48die
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Re: How much money do you want to retire?

Post by Bir48die » Thu Feb 14, 2019 4:39 pm

longleaf wrote:
Thu Jan 31, 2019 1:08 am
2.6m investable.

Alternatively, cash flow summing 100k today’s dollars from certain RE will suffice.
For the next 5-10 years I think this is a good number. Then up 10% for sure. This can be a combo of RE, pension equivalency or just the straight number. Included in my estimation is a paid for house and debt free to boot.

visualguy
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Re: How much money do you need to retire?

Post by visualguy » Thu Feb 14, 2019 11:50 pm

HomerJ wrote:
Thu Feb 14, 2019 3:15 pm
Actually this part favors the two-house solution even more I'd think. A lot easier to sell one of two homes to raise money (for LTC or whatever) than to sell your one really expensive CA home and have to find a new place to live for the spouse.

And, of course, since the two homes are cheaper than the one expensive CA home, you'd actually have more in INVESTMENTS, so you'd be less likely to be strapped for cash late in retirement.
The first spouse to need LTC will use other assets - there's a reserve for that. The house is for the second spouse to need LTC.

I don't like the idea of living in different homes in different locations to avoid bad weather, but owning another home as an investment makes sense to me. For example, I think that having half your net worth in a Boglehead portfolio and half in direct real estate (including the home where you live) would be a good plan. I would rent out the extra home(s).

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Re: How much money do you want to retire?

Post by davidsorensen32 » Fri Feb 15, 2019 12:01 am

OP, 'want' = sky is the limit. 'need' is a more realistic question. 'will make' (before laid off or serious health condition or divorce etc.) is the real question. i.e. How much money will you make before you retire ?

My answer is as much as I can make. Age discrimination is rife in technology. I don't count on being employed longer than 50. I will be lucky if I can make low seven digits by then targeting 3% SWR = $100,000 pa
benign_user wrote:
Wed Aug 02, 2017 9:20 am
How much money do you want to retire? Please also state your age. Also assume your pensions will be zero.

TallBoy29er
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Re: How much money do you want to retire?

Post by TallBoy29er » Fri Feb 15, 2019 12:09 am

cantos wrote:
Mon Jun 04, 2018 9:30 pm
Riprap wrote:
Sun Jun 03, 2018 9:03 pm
AlphaLess wrote:
Sun Jun 03, 2018 6:57 pm
Time to pull out more abstract numbers now.
$6.02214 X 10^23 ought to do nicely.
That would put you in a super position.
haha. avogadro's number :)

BanditKing
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Re: How much money do you want to retire?

Post by BanditKing » Fri Feb 15, 2019 12:39 am

Nearly 48 with a net-worth of about $650k. I would love to hit a number that would reliably let me pull about $70k/year post tax (2019 dollars) which I figure is about $2.5M. I want to retire at 55, but I don't see that happening short of something seriously unexpected happening (lottery, rich uncle, etc). While I do max my 401k and ROTH and kick in maybe an additional $20k to taxable, I spent too many years not saving. More-likely 62 to 65 will be my retirement number.

This could be skewed by inheritances, but I have no idea what they may be, and IPS says to ignore them until they occur.

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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ » Fri Feb 15, 2019 2:19 am

BanditKing wrote:
Fri Feb 15, 2019 12:39 am
Nearly 48 with a net-worth of about $650k. I would love to hit a number that would reliably let me pull about $70k/year post tax (2019 dollars) which I figure is about $2.5M. I want to retire at 55, but I don't see that happening short of something seriously unexpected happening (lottery, rich uncle, etc). While I do max my 401k and ROTH and kick in maybe an additional $20k to taxable, I spent too many years not saving. More-likely 62 to 65 will be my retirement number.

This could be skewed by inheritances, but I have no idea what they may be, and IPS says to ignore them until they occur.
You figuring in Social Security?

If you wait until 70, and you get $30k a year, then you only need $40k from your investments from then on. So $1 million at 70.

Then you got to get to 70. If you retire at 60, that's $70k for 10 years. Or $700k. So $1.5 million at 60 would probably do it (figure $700k for 60-70, and another $800k that will easily grow to $1 million over the 10 years until you start pulling from it at 70)

Edit: Actually, you could buy a 10-year certain annuity that would pay out $70k a year for 10 years for $600,000. And really, $700,000 would grow to $1 million over 10 years pretty easily

So you could probably get away with retiring at 60 with $1.3 million. :)
The J stands for Jay

wrongfunds
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Re: How much money do you want to retire?

Post by wrongfunds » Sat Apr 13, 2019 11:59 am

I am reading this topic after taking 6 months hiatus from this forum. Things are exactly still the same. I still want 50% more than what I have before considering retirement. I still do not want to retire at the top of the market and there is no way I will retire when I am taking a blood bath in the market.

Any other golden nugget we can add to this discussion? Oh, and how can we forget the proverbial and absolutely classic "I need 13 million to retire" topic started by 30 year old guy?

Did TimeLord finally retire while I was away? I thought we had a bet going on and I might owe him a beer or two if he actually did.

Thesaints
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Re: How much money do you want to retire?

Post by Thesaints » Sat Apr 13, 2019 12:17 pm

I could probably “survive” on 60/70k per year, net of taxes and indexed for inflation. Life expectancy at retirement will be 24 years. Therefore I plan for 50 years and 140k/year.
Over such a long time span I assume a 2.5% SWR, which adds up to a capital at retirement of 5.6 millions, in line with Suze’s estimation.
I can probably make do with only 4 millions (120k/year at 3% withdrawal rate), though.
Social security will pay my taxes.

juliewongferra
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Re: How much money do you want to retire?

Post by juliewongferra » Sat Apr 13, 2019 12:22 pm

benign_user wrote:
Wed Aug 02, 2017 9:20 am
How much money do you want to retire? Please also state your age. Also assume your pensions will be zero.
I WANT ALL TEH MONEYS
If you aren't familiar with Mr. Bogle and his investment philosophy, then you don't know Jack!

marcopolo
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Re: How much money do you want to retire?

Post by marcopolo » Sat Apr 13, 2019 12:41 pm

wrongfunds wrote:
Sat Apr 13, 2019 11:59 am
I am reading this topic after taking 6 months hiatus from this forum. Things are exactly still the same. I still want 50% more than what I have before considering retirement. I still do not want to retire at the top of the market and there is no way I will retire when I am taking a blood bath in the market.

Any other golden nugget we can add to this discussion? Oh, and how can we forget the proverbial and absolutely classic "I need 13 million to retire" topic started by 30 year old guy?

Did TimeLord finally retire while I was away? I thought we had a bet going on and I might owe him a beer or two if he actually did.
I think he is doing just One More Year :beer
Once in a while you get shown the light, in the strangest of places if you look at it right.

S&L1940
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Re: How much money do you want to retire?

Post by S&L1940 » Sat Apr 13, 2019 12:41 pm

After reading all the responses (over the past couple of years) the dear wife and I thought we might have needed to get into a time machine and start over.
Yet, we (in our late 70s) even with no pensions, figure we will continue to do just fine with our six figure bucket of assets. Even with some hefty expenses - planned and unplanned - our bucket contains more today than when we stopped accumulating ten years ago.
May your wishes be fulfilled, S & L
Don't it always seem to go * That you don't know what you've got * Till it's gone

SrGrumpy
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Re: How much money do you want to retire?

Post by SrGrumpy » Sat Apr 13, 2019 2:43 pm

$1m is my number, hopefully in about 5 years when I'll be 55. With a 2% SWR and $10k from a rental, I think the 2 of us can manage very well in allegedly HCoL sunny SoCal.
Last edited by SrGrumpy on Sat Apr 13, 2019 3:41 pm, edited 1 time in total.

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TheTimeLord
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Re: How much money do you want to retire?

Post by TheTimeLord » Sat Apr 13, 2019 3:24 pm

marcopolo wrote:
Sat Apr 13, 2019 12:41 pm
wrongfunds wrote:
Sat Apr 13, 2019 11:59 am
I am reading this topic after taking 6 months hiatus from this forum. Things are exactly still the same. I still want 50% more than what I have before considering retirement. I still do not want to retire at the top of the market and there is no way I will retire when I am taking a blood bath in the market.

Any other golden nugget we can add to this discussion? Oh, and how can we forget the proverbial and absolutely classic "I need 13 million to retire" topic started by 30 year old guy?

Did TimeLord finally retire while I was away? I thought we had a bet going on and I might owe him a beer or two if he actually did.
I think he is doing just One More Year :beer
To my knowledge he is still working. No longer doing OMYs though since he has reached all his goals. Just working on enjoying his life and the benefits of FI without RE.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

theplayer11
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Re: How much money do you want to retire?

Post by theplayer11 » Sat Apr 13, 2019 9:04 pm

$1.5m by age 60. We can easily live on $60k a year until SS.

smitcat
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Re: How much money do you want to retire?

Post by smitcat » Sun Apr 14, 2019 6:19 am

TheTimeLord wrote:
Sat Apr 13, 2019 3:24 pm
marcopolo wrote:
Sat Apr 13, 2019 12:41 pm
wrongfunds wrote:
Sat Apr 13, 2019 11:59 am
I am reading this topic after taking 6 months hiatus from this forum. Things are exactly still the same. I still want 50% more than what I have before considering retirement. I still do not want to retire at the top of the market and there is no way I will retire when I am taking a blood bath in the market.

Any other golden nugget we can add to this discussion? Oh, and how can we forget the proverbial and absolutely classic "I need 13 million to retire" topic started by 30 year old guy?

Did TimeLord finally retire while I was away? I thought we had a bet going on and I might owe him a beer or two if he actually did.
I think he is doing just One More Year :beer
To my knowledge he is still working. No longer doing OMYs though since he has reached all his goals. Just working on enjoying his life and the benefits of FI without RE.
Opinions vary...

wrongfunds
Posts: 2013
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Re: How much money do you want to retire?

Post by wrongfunds » Tue Apr 16, 2019 8:29 pm

Opinions vary...
Can you explain your comment? I did not get it.

bltn
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Re: How much money do you need to retire?

Post by bltn » Tue Apr 16, 2019 10:10 pm

visualguy wrote:
Thu Jan 31, 2019 12:00 am
bltn wrote:
Wed Jan 30, 2019 9:54 pm
visualguy wrote:
Sun Jan 27, 2019 12:44 am
bltn wrote:
Sun Jan 27, 2019 12:19 am
Equating HCOL to a nice climate (as someone in the thread suggested) would include the southern portion of the country in HCOL, and eliminate NYC, Chicago , and Boston. Unless one prefers cold weather. Probably not a good idea to relate climate to COL.
I haven't seen anyone equating it (there's obviously HCOL without a good climate). The statement was that the areas in the US with a good year-round climate are HCOL. Basically, it's areas in coastal California and Hawaii. An unfortunate aspect of the US is that almost the entire country has a bad climate at least part of the year, and in many places most of the year. If you want good year-round climate, you're stuck with HCOL.
I see. ??!!? So a good climate, however most define it, mandates a high cost of living. But there can also be HCOL with bad climates. And good year round climates are coastal California and Hawaii. Where should we put Florida? East Texas coast ?
If climate is that important, one could move 50 miles outside of town or away from the coast and have great weather with less cost. And all the benefits of rural living. Uh oh. What did I say now?
.
Hot and very humid in Florida and East Texas coast, not to mention the storms - forget it.

You can't really escape the high cost in the areas I mentioned. If the climate is good year-round and the town/neighborhood is nice, it's very expensive - limited supply and a lot of demand. It doesn't sound like you really know these areas based on your "50 miles" comment, but if you can list nice inexpensive areas to live with good year-round weather in the US that would be very enlightening. I'm yet to encounter them, and I've spent most of my life in the (few) good-climate parts of the country, and traveled to all states and most metro areas.
I forgot about the humidity. And I forgot that some people prefer cold weather. And some people like a marked change in the seasons.
I m still having a hard time relating climate to hcol. My simplistic view thought that hcol was primarily due to high real estate costs and high local taxes.
That s why I like this forum so much. Always finding interesting points of view.

confusedinvestor
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Re: How much money do you want to retire?

Post by confusedinvestor » Wed Apr 17, 2019 12:40 am

Currently 43, Need 2M at 55 (w/o SS ) with 3.5 SWR

NYCwriter
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Re: How much money do you want to retire?

Post by NYCwriter » Wed Apr 17, 2019 2:34 am

I'm at 500K at 52. Not great, but with my retirement contributions I'm currently in a 12% tax bracket, except for periods where I earn extra with writing (I earned more at a job I hated when younger, but thankfully invested.)

I rent middle-income housing in Manhattan. It's very expensive here, but I pay less than half market rate. I'd like to live in Delaware, MD, or Minn post-retirement as I have friends there, but may end up staying in NYC. I enjoy living here, and would get a tax exemption on retirement withdrawals if I stay.

My plan in the next 3-5 years is to purchase a middle-income coop here in the city (wait list) which would give me a lower monthly payment and full principal return should I sell. The other option was always a condo or coop out in NJ or Bronx, but the taxes + fees make this less attractive at my age.

I now budget one "nice" vacation a year but I'm pretty frugal, so hoping that compounding works for retirement. I contribute more than half my income to tax-deferred retirement. Pension, 403b, 457b, Roth, taxable.

FYI, my next-door neighbor is in her mid-80s, does yoga at the Y 3x a week, and has lived all over the world. She doesn't have a cush retirement fund, but she's healthy and happy.

StealthRabbit
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Re: How much money do you need to retire?

Post by StealthRabbit » Wed Apr 17, 2019 3:31 am

HomerJ wrote:
Wed Jan 30, 2019 1:06 pm
....
The few areas in the US with a good year-round climate are HCOL. Moving from good climate to bad climate is a sacrifice.

...
As far as climate, one can EASILY own 2 (nicer) homes far cheaper than one home in the HCOL areas that require $5-$10 million to retire. This cheaper option allows one to enjoy good climate all year round as well, with a nice change of activities and scenery every 6 months. We plan to spend our summers and falls at the lake, and our winters and springs in Phoenix with the mountains and city life to explore.

We have family and friends in both places.

Or one could rent or travel during the poor climate months. Maybe instead of buying in Phoenix we could rent in the Caribbean or Mexico or Florida or even California for a few months in the winter.

Far cheaper than owning an $1 million small house in CA.

...if your immediate current location is where you want to stay in retirement, then there's nothing wrong with working longer and saving more in order to afford the extra millions and millions of dollars to stay there in retirement.

But note that could be considered a sacrifice too.

Re: How much money do you need to retire?(OT... $<3m net pre FRA) all from a single earner / night shift hourly wages (and a few investments along the way + working 3 jobs at once from age 15 - 49). Most of our wealth went to charity in our 30's, we just keep enough to 'get by', doing fine. DAF is very happy (nice tax tool for last 30+ yrs. Good place to stash appreciated equities) No inheritance planned... kids can distribute the DAF.

Plan C...(while active (traveling) retiree age 49 - age 70+)
We have multiple rural view homes on acreages in desirable 'destination' locations with opposite climates* in USA.(All 'Main Homes' are rented out FT with spare places for us or friends whenever we happen to be nearby (Free for us..kinda - much maint on rural places), ) Will add homes in Southern hemisphere for dead of winter, maybe Spain / France / Italy due to available Healthcare for USA medical refugees.

All properties... (total of 8, total combined cost is under $1m capital investment) - ~ $10k / month gross income. FMV ~$2.5m (way too much 'unrealized' equity in primary residence (in a National Scenic protected area - tough to sell / unable to replicate the view and convenience). + to sell... would lead to divorce :(
1) Each has a separate living space (or more than 2 living spaces) including extra RV spots and shops for traveling friends. (bunk houses, cabins, apartment in shop - most are out of view of main home (which rents for more money, than our 'downsized' qtrs))
2) Near airports (20 min - 30 min)
3) Keep a cheap car in each location (Evil Diesel VW can sit idle for YRS and not harm them, they will still run great and deliver 50+ mpg on free fuel)
4) Each property cash flows positive (some 12% positive, but others in high property tax areas (Californicated property taxes in Colorado and Washington (and other western states) - Property taxes up 600% in my locations due to 200+ new CA residents per month for last 30 yrs) other states don't enjoy the advantages of Prop 13)
5) Most of my thousands of CA coworkers who came to CO, WA, OR, CA, ID with their CA wages (allowed to keep high wages), retained their CA props as retirement Prop 13 meccas) They kept their 'western states' props or downsized to cabins / beach cottages for rentals / and future periodic escapes from CA..
6) Some retain domicile in Income tax free NV and WA (be careful, CA is greedy and will seek you out if you are not legit on domicile.) Most of us just travel a lot (at least 50% of the time out of state / country).
7) Car / trucks / tractors/... Flights (transport) and 1/2 food cost is deductible against rental income (as allowed). Keep good records!

By age 75, I intend to sell extra props on contract, or 1031 into a commercial NNN. I have a 94 YO friend who enjoys $14k / month income on a NNN tire shop building in Atlanta that he has owned for 20 yrs and has never even been to Atlanta! Doesn't intend to ever go... Just collect the checks on 7 yr lease, 3 months in advance. (from Japanese ownership of franchise). No repairs, no taxes, no utilities :sharebeer

My future Primary residence.
I expect to be renting / shared equity ownership post-age 75 (hopefully in a rural cottage community of age 50+ with shared shop / garden / livestock / craft and community building + caregiver apartments / cars / care). Visited some really nice small communities in MN, WI, and CA (near Davis).

After selling rural pros... I will have PLENTY of spare tools, trucks, tractors, and dozers for senior village!

Someone (not me) will have the 'mother-of-all' estate sales! Woo-hoo!

*Opposite climates -
simple... Hill Country TX (200 wonderful days / temps / yr) is nearly direct opposite season of PNW (we_tside) (80 wonderful days / yr) 280 days of drizzle (but plenty of WATER!)

NEVER in TX in August / Sept!
Never in WA in Nov, or Jan-Feb)
Colorado is NICE (there often (shoulder seasons)
CA, we're there a lot too, Very close to PNW ($60 flights) No INCOME from CA!!!

Both CA and CO can be reached enroute PNW > TX (seldom drive between PNW and TX, only if I need to move a dozer or motorcycle / antiques).
Salmon fly free on SWA (100# / passenger baggage.) Salmon trades REAL well for Brisket and REAL ranch meat!!!
Definitely in TX every 3rd Sunday (Country / Ranch Church Potluck!) Yum!

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