How much money do you want to retire?

[joelly]

How would one know how much money we need to retire?

[wander]

I will never get what I want to retire. But I've got what I need.

[SQRT]

Im 70 ,retired for 14 years. My decision to retire wasn’t based on how much money I wanted versus how much I had. I retired when I stopped enjoying my high pressure job and wanted to do other things. I then adjusted my retirement spending to reflect my available funds (of course these were pretty substantial). I suspect that most people do it this way? Perhaps less common around here though.

[diydocwifejd]

Age 33. Houesehold income in high six figures. $7M by age 55 (will likely hit that number by 50).

[HomerJ]

How would one know how much money we need to retire?

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

[EnjoyIt]

How would one know how much money we need to retire?

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

[HomerJ]

How would one know how much money we need to retire?

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

[Wanderingwheelz]

How would one know how much money we need to retire?

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

[BV3273]

I want $10 million at 55.

[EnjoyIt]

How would one know how much money we need to retire?

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

Another way to think about it, if one did use HomerJ's example, taking $600k and using it for 10 years of expenses allowing the $1 million to keep growing may very well see that $1 million turn into $2 million. over 12 years, although that would require a 6% return on investments which is possible but unlikely.

[smitcat]

How would one know how much money we need to retire?

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

[Wanderingwheelz]

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

[Ramjet]

I will never get what I want to retire. But I've got what I need.

There is a song in there somewhere

[smitcat]

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

[HomerJ]

I will never get what I want to retire. But I've got what I need.

There is a song in there somewhere

If you try some times you just might find a way to turn it into a song.

[jsapiandante]

I want to retire with $100 million dollars. But, realistically, give me $1 million and a paid off house and I'd live very comfortably.

[willthrill81]

I will never get what I want to retire. But I've got what I need.

There is a song in there somewhere

"Oh, one day you get what you want
But it's not what you think
Then you get what you need

Well, oh, that's the way it is
You gotta roll with the punches
That's the way it goes
You gotta bend when the wind blows
You live you learn
You crash and burn
It's hit or miss
And that's the way it is"
-That's the Way, by Annie Leslie Roboff & Mary Holladay Lamar

[wander]

I will never get what I want to retire. But I've got what I need.

There is a song in there somewhere

That's my dream. A dream is only nice when it is still a dream.

[TheDDC]

It depends how much the health care-industrial complex wants to take of your hard earned income. Plan on up to 90% risk.

-TheDDC

[Wanderingwheelz]

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

[EnjoyIt]

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

Are you sure? I was in the store yesterday and the bread I like was selling for 50 cents less.

[smitcat]

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

After reading posts here for a while I am sure that many folks do not have a good feeling for inflations affect over a number of years.

[visualguy]

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

After reading posts here for a while I am sure that many folks do not have a good feeling for inflations affect over a number of years.

It's even worse because what really matters is the overall cost of the stuff that you actually spend money on. For me, at least, that has increased at a higher rate than the official rate of inflation.

[Wanderingwheelz]

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

Are you sure? I was in the store yesterday and the bread I like was selling for 50 cents less.

Hopefully you cleared the rack.

[Pinotage]

When we view the future portfolio value it is always within the context of inflation considerations as well. If the value did double in 12 years the real key would be what inflation did in that same timeframe.

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

After reading posts here for a while I am sure that many folks do not have a good feeling for inflations affect over a number of years.

Maybe they are hoping for a flat affect.

[Hub]

$4,000,000 at a 4% safe withdrawal rate is plenty for me at any age. Realistically $2.5M with some ongoing income north of zero will get it done at any point past 50 yrs old is my goal.

Current annual spend is around $125,000.

[EnjoyIt]

Duh

Good I am glad we agree , so this would be the modified statement for clarity.....

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low....of course that doubled amount at $3.2 million may only be worth 15-20% more than the original $1.6 million due to inflation even if you were to get there.

I think everyone here knows a loaf of bread goes up in price over a period of years.

Are you sure? I was in the store yesterday and the bread I like was selling for 50 cents less.

Hopefully you cleared the rack.

Almost, it was a little high for me, but I was able to jump right over it scraping a loaf of rye with my rear foot causing me to stumble on the landing.

[Keenobserver]

Make a guess for how much you'll spend a year in retirement, subtract what you will get from SS and/or pensions then multiply by 25 (if you plan to retire around 60-65).

If you plan to retire earlier (say like 50-55), just add in the amount of money you need for those 5-10 years to bridge the gap from, for example, 55 to 65 (when you start taking SS).

For example, say you think you'll need $60,000 a year in retirement, and SS will give you $20,000 a year.

So at 65, you'll need $40,000 a year... Times 25, that's $1 million.

But if you want to retire at 55, you'll need another $600,000 (10 years times $60,000) to get you to 65 and Social Security...

So maybe you'll need $1.6 million if you retire at 55.

-------------

If you are young and/or with young kids, and lifestyle is still evolving, it may be hard to determine what your retirement expenses will be. So just save a good chunk each year, and use huge ballpark figures.

When you hit your 40s-50s, look at your current expenses, and you can probably have a pretty good idea what your retirement expenses will be. Try to have the house paid off by retirement. That will lower your expenses a lot, which means you'll need less saved.

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

Another way to think about it, if one did use HomerJ's example, taking $600k and using it for 10 years of expenses allowing the $1 million to keep growing may very well see that $1 million turn into $2 million. over 12 years, although that would require a 6% return on investments which is possible but unlikely.

Is a 6% return over 10 years really unlikely?

[EnjoyIt]

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

Another way to think about it, if one did use HomerJ's example, taking $600k and using it for 10 years of expenses allowing the $1 million to keep growing may very well see that $1 million turn into $2 million. over 12 years, although that would require a 6% return on investments which is possible but unlikely.

Is a 6% return over 10 years really unlikely?

Historically a 60/40 portfolio produced 8.7% with an average 3% inflation equaling 5.7% Real. So yeah, it is possible. Though all the pundits keep saying we should expect lower returns than average due to high valuations. Personally I use 4% as my long term growth for projecting my future. I used to use 5% over the last decade for my projections and have been pleasantly surprised at the better than expected results.

[TheCowbell]

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

Another way to think about it, if one did use HomerJ's example, taking $600k and using it for 10 years of expenses allowing the $1 million to keep growing may very well see that $1 million turn into $2 million. over 12 years, although that would require a 6% return on investments which is possible but unlikely.

Is a 6% return over 10 years really unlikely?

Historically a 60/40 portfolio produced 8.7% with an average 3% inflation equaling 5.7% Real. So yeah, it is possible. Though all the pundits keep saying we should expect lower returns than average due to high valuations. Personally I use 4% as my long term growth for projecting my future. I used to use 5% over the last decade for my projections and have been pleasantly surprised at the better than expected results.

This is all assuming covid-22 or the '23 asteroid don't throw a wrench in those best laid plans. </debbiedowner>

[EnjoyIt]

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

Another way to think about it, if one did use HomerJ's example, taking $600k and using it for 10 years of expenses allowing the $1 million to keep growing may very well see that $1 million turn into $2 million. over 12 years, although that would require a 6% return on investments which is possible but unlikely.

Is a 6% return over 10 years really unlikely?

Historically a 60/40 portfolio produced 8.7% with an average 3% inflation equaling 5.7% Real. So yeah, it is possible. Though all the pundits keep saying we should expect lower returns than average due to high valuations. Personally I use 4% as my long term growth for projecting my future. I used to use 5% over the last decade for my projections and have been pleasantly surprised at the better than expected results.

This is all assuming covid-22 or the '23 asteroid don't throw a wrench in those best laid plans. </debbiedowner>

I am officially prepared for both.

If I survive an asteroid blast that destroys civilization as we know it, I have certain skills that will be beneficial to the new society as well as a large store of ammunition though that store has dwindled some because of the run on ammo over the last few months.

If we do have COVID 22, I am prepared for that as well with a decent supply of PPE. COVID does not scare me. I am around it almost every work day and understand how to protect myself and my family.

Lastly, one can not mitigate all potentially rare possibilities that may come along. Eventually we need to decide that we are good enough and move on with life.

[nigel_ht]

So what happened between ages 40 and 50 to cause your required portfolio to bloat by 5M. Your expenses increase by $200K annually? That'd be an interesting midlife crisis...

What happened? Kids who developed health issues that could cost a lot (with cognitive co-morbidities that seriously reduce their earning potential); a president and controlling party hell bent on taking away preconditions their ability to receive care; a desire to not go bankrupt due to medical pre-conditions; understanding that past performance does not equal future results; seeing how the Boomers before me have a tendency to play "I got mine" and pull up the ladder behind them, saddling the younger generations with footing the bill; witnessing the massive expense of long term care for Alzheimer's for relatives of a spouse who may be genetically predisposed; a job that allows me to earn through my peak years at a rate that can mitigate a lot of these social costs; desire to have a completely passive and stable lifestyle once I stop earning.

I see all these FIRE people entering their 40s who are making very large assumptions about expenses, tax rates, and the cost of healthcare, not to mention rates of return. The biggest mistake I see is the assumption that real returns being greater than expenses means everything is good--but failing to take into account that real returns need to be marked down by taxes first, and that expenses compound too.

I also see relatives with multiple bankruptcies entering their 50s with zero retirement savings who are going to end up having to have society pick up the bills for their future care and income. Who's going to pay to keep social security solvent? Companies that got big tax breaks?

I think you're pretty much correct. The number for retiring truly safely at 50 is quite high, particularly if you have some family circumstances that lead to consuming significant extra funds. However, for people who don't have such circumstances, the number should be lower than $10M...

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 think there’s a big difference in how some people define upper middle class lifestyle. 5 million is more than enough for most people to have an extremely nice retirement and not have to ever worry.

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

[Dave55]

Just enough plus a tad bit more.

Dave

[JimmyD]

$3.5M + a paid off home and we're good. On target to peace out from work at age 60 (earlier if there's an inheritance). Currently 38.

[ripvanwinklesf]

My number is $4mm liquid and a paid off primary residence. I am 44 and wife 46. We met and exceeded the liquid target with $4.65mm. Overall net worth of $5.75mm [$5.95mm when counting home appreciation], but house is $1.6mm [$1.8mm] with $0.5mm of debt on it.

So, I don't have a paid off primary residence. While I am early retired, rather than paying down house debt by reducing liquid assets of $4.65mm, we are paying down the $0.5mm using wife's residual income during her remaining work career and whatever small consulting income I make to do so. If she gets laid off / sick of the corporate slog, we will pay off remainder using liquid assets.

[jerrysmith]

I don't have a number.
Wife is 20+ years into a pension job, likely to do around 30y.
I'm 3 years into a pension job, plan is to do the 20, although I'll be vested at 10 and will look around just for due diligence.

We'll retire no later than 62 for me and 58ish for her.
Plan is no debt, and live off pensions and SS with an IRA from various rollovers and 403B determining the 'fun' part of it.

Looking to relocate overseas for many reasons, cost is one.

[Marseille07]

1.6MM+ and a paid off house. Imo the key is to withdraw small and grow your portfolio over time. Flexing spending is a lot easier when a house is fully paid off.

[Escapevelocity]

Plan to retire at 55 in 1 year from now targeting $1.75M plus a paid off house worth $350k. My wife is same age and does not work.

[EnjoyIt]

So what happened between ages 40 and 50 to cause your required portfolio to bloat by 5M. Your expenses increase by $200K annually? That'd be an interesting midlife crisis...

What happened? Kids who developed health issues that could cost a lot (with cognitive co-morbidities that seriously reduce their earning potential); a president and controlling party hell bent on taking away preconditions their ability to receive care; a desire to not go bankrupt due to medical pre-conditions; understanding that past performance does not equal future results; seeing how the Boomers before me have a tendency to play "I got mine" and pull up the ladder behind them, saddling the younger generations with footing the bill; witnessing the massive expense of long term care for Alzheimer's for relatives of a spouse who may be genetically predisposed; a job that allows me to earn through my peak years at a rate that can mitigate a lot of these social costs; desire to have a completely passive and stable lifestyle once I stop earning.

I see all these FIRE people entering their 40s who are making very large assumptions about expenses, tax rates, and the cost of healthcare, not to mention rates of return. The biggest mistake I see is the assumption that real returns being greater than expenses means everything is good--but failing to take into account that real returns need to be marked down by taxes first, and that expenses compound too.

I also see relatives with multiple bankruptcies entering their 50s with zero retirement savings who are going to end up having to have society pick up the bills for their future care and income. Who's going to pay to keep social security solvent? Companies that got big tax breaks?

I think you're pretty much correct. The number for retiring truly safely at 50 is quite high, particularly if you have some family circumstances that lead to consuming significant extra funds. However, for people who don't have such circumstances, the number should be lower than $10M...

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 think there’s a big difference in how some people define upper middle class lifestyle. 5 million is more than enough for most people to have an extremely nice retirement and not have to ever worry.

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

That is so out of touch from reality.
$5 million and a paid off house anywhere in the US buys a very comfortable life including spending on electronics or whatever you desire. One doesn’t even need that much.

[EnjoyIt]

What happened? Kids who developed health issues that could cost a lot (with cognitive co-morbidities that seriously reduce their earning potential); a president and controlling party hell bent on taking away preconditions their ability to receive care; a desire to not go bankrupt due to medical pre-conditions; understanding that past performance does not equal future results; seeing how the Boomers before me have a tendency to play "I got mine" and pull up the ladder behind them, saddling the younger generations with footing the bill; witnessing the massive expense of long term care for Alzheimer's for relatives of a spouse who may be genetically predisposed; a job that allows me to earn through my peak years at a rate that can mitigate a lot of these social costs; desire to have a completely passive and stable lifestyle once I stop earning.

I see all these FIRE people entering their 40s who are making very large assumptions about expenses, tax rates, and the cost of healthcare, not to mention rates of return. The biggest mistake I see is the assumption that real returns being greater than expenses means everything is good--but failing to take into account that real returns need to be marked down by taxes first, and that expenses compound too.

I also see relatives with multiple bankruptcies entering their 50s with zero retirement savings who are going to end up having to have society pick up the bills for their future care and income. Who's going to pay to keep social security solvent? Companies that got big tax breaks?

I think you're pretty much correct. The number for retiring truly safely at 50 is quite high, particularly if you have some family circumstances that lead to consuming significant extra funds. However, for people who don't have such circumstances, the number should be lower than $10M...

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 think there’s a big difference in how some people define upper middle class lifestyle. 5 million is more than enough for most people to have an extremely nice retirement and not have to ever worry.

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

$3million in the Bay Area with a paid off house is a pretty comfortable lifestyle. The key is “paid off house.”

[marcopolo]

What happened? Kids who developed health issues that could cost a lot (with cognitive co-morbidities that seriously reduce their earning potential); a president and controlling party hell bent on taking away preconditions their ability to receive care; a desire to not go bankrupt due to medical pre-conditions; understanding that past performance does not equal future results; seeing how the Boomers before me have a tendency to play "I got mine" and pull up the ladder behind them, saddling the younger generations with footing the bill; witnessing the massive expense of long term care for Alzheimer's for relatives of a spouse who may be genetically predisposed; a job that allows me to earn through my peak years at a rate that can mitigate a lot of these social costs; desire to have a completely passive and stable lifestyle once I stop earning.

I see all these FIRE people entering their 40s who are making very large assumptions about expenses, tax rates, and the cost of healthcare, not to mention rates of return. The biggest mistake I see is the assumption that real returns being greater than expenses means everything is good--but failing to take into account that real returns need to be marked down by taxes first, and that expenses compound too.

I also see relatives with multiple bankruptcies entering their 50s with zero retirement savings who are going to end up having to have society pick up the bills for their future care and income. Who's going to pay to keep social security solvent? Companies that got big tax breaks?

I think you're pretty much correct. The number for retiring truly safely at 50 is quite high, particularly if you have some family circumstances that lead to consuming significant extra funds. However, for people who don't have such circumstances, the number should be lower than $10M...

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 think there’s a big difference in how some people define upper middle class lifestyle. 5 million is more than enough for most people to have an extremely nice retirement and not have to ever worry.

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

That is so out of touch from reality.
$5 million and a paid off house anywhere in the US buys a very comfortable life including spending on electronics or whatever you desire. One doesn’t even need that much.

I was thinking the same thing.

If the house is paid off, no longer need to save for retirement, and lower taxes on capital than income. The $5M @3% WR supporting $150/yr, would probably be similar lifestyle to someone earning $400-$500k/yr. during accumulation phase.
I guess to some that is barely scraping by....

[nigel_ht]

I think you're pretty much correct. The number for retiring truly safely at 50 is quite high, particularly if you have some family circumstances that lead to consuming significant extra funds. However, for people who don't have such circumstances, the number should be lower than $10M...

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 think there’s a big difference in how some people define upper middle class lifestyle. 5 million is more than enough for most people to have an extremely nice retirement and not have to ever worry.

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

$3million in the Bay Area with a paid off house is a pretty comfortable lifestyle. The key is “paid off house.”

Lol, can you have a paid off house in the Bay Area with under a $3M net worth?

[EnjoyIt]

I think there’s a big difference in how some people define upper middle class lifestyle. 5 million is more than enough for most people to have an extremely nice retirement and not have to ever worry.

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

$3million in the Bay Area with a paid off house is a pretty comfortable lifestyle. The key is “paid off house.”

Lol, can you have a paid off house in the Bay Area with under a $3M net worth?

That's funny. I meant $3 mil invested.

[rockstar]

Ideally, $5 million. Then, I wouldn't have to look at my portfolio at all.

[visualguy]

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

I didn't say "normal middle class". I said that even at $5M and retiring at 50, you need to make compromises. Money is not so plentiful that you can live without giving up on stuff, and this stuff isn't really extravagant. Not talking about giving up on yachts, charter planes, vacation homes, etc. You're not going to be living in HCOL, flying business class, driving BMWs, keeping your house nicely renovated, buying the latest toys regularly, buying the best organic food, having enough stashed away for LTC, etc. You can do some of those things, but not all of them.

In San Jose that you mentioned, just property taxes, ACA, and utilities will likely eat over $50K annually. The $90K that you mentioned for a couple won't go far at all. This doesn't mean that you can't retire at 50 on $5M (of course you can), but compromises in lifestyle need to be made. It's not a financially worry-free have-it-all kind of situation, and you have to give up on things that aren't really specific to the lives of the truly rich. Some of the things you have to give up include quite likely things that you got used to while working with a high income, but now you have to think twice about whether you can really afford them anymore or not. It's not all that exciting.

[HomerJ]

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

I didn't say "normal middle class". I said that even at $5M and retiring at 50, you need to make compromises. Money is not so plentiful that you can live without giving up on stuff, and this stuff isn't really extravagant. Not talking about giving up on yachts, charter planes, vacation homes, etc. You're not going to be living in HCOL, flying business class, driving BMWs, keeping your house nicely renovated, buying the latest toys regularly, buying the best organic food, having enough stashed away for LTC, etc. You can do some of those things, but not all of them.

In San Jose that you mentioned, just property taxes, ACA, and utilities will likely eat over $50K annually. The $90K that you mentioned for a couple won't go far at all. This doesn't mean that you can't retire at 50 on $5M (of course you can), but compromises in lifestyle need to be made. It's not a financially worry-free have-it-all kind of situation, and you have to give up on things that aren't really specific to the lives of the truly rich. Some of the things you have to give up include quite likely things that you got used to while working with a high income, but now you have to think twice about whether you can really afford them anymore or not. It's not all that exciting.

Hmmm.. maybe we're using different definitions here.. Are you talking about $5 million net worth where a $2 million home is part of the $5 million? Or $5 million in investments OUTSIDE a paid-off home?

I can only imagine that you are talking about $3 million in investable assets (with a paid off $2 million house) in a HCOL area. I still think you wouldn't have to scrimp much, but I'll defer to your experience...

But $5 million in investable assets (with a paid off house) even in a HCOL area means you give up nothing. Sure, property taxes are higher, but you can fly business class, drive a BMW or high-end Tesla, keep your house nicely renovated, and buy the latest toys regularly.

Because I know I can do that with even $2.5 million (with a paid-off house) in a LCOL area.

[flaccidsteele]

So you don’t expect that $1.6 million to grow at all while your waiting for SS to kick in? That doesn’t sound like the homerJ I’m used to.

I thought that would be too complicated

But yeah, one could probably go with $1.5 million or even $1.4 million assuming SOME growth.

Just in the last week a classic balanced portfolio of $1.6 million is up right @ $100,000. It wouldn’t be outside the realm of possibilities to have a portfolio of $1.6 million double from 50-62 if expenses are low.

Another way to think about it, if one did use HomerJ's example, taking $600k and using it for 10 years of expenses allowing the $1 million to keep growing may very well see that $1 million turn into $2 million. over 12 years, although that would require a 6% return on investments which is possible but unlikely.

Is a 6% return over 10 years really unlikely?

Not from my experience

[GKSD]

Have $5M.

48 and wife 36, both are working.

May be go up $8M+ by the time I am 60 and then start to think about retiring.

[goos_news]

Been lurking on this thread for a bit, going back through the recent posts and then rethinking things, especially regarding whether $5M is enough. We are moving into 2x that, and our annual spend is 120K or less. Spouse keeps pushing out that date, and we're kind of in a high earning phase that makes things harder to step away. The "want" is getting harder to discern.

[MathIsMyWayr]

At $5M and retiring at 50 you already need to make some compromises such as moving away from an HCOL area, reducing travel, driving less nice cars, not budgeting much for LTC for the first person to need it, not being able to do much house renovation over those decades, not buying the latest toys regularly (electronics, computers), etc. You can't have it all with that nest egg, you need to drop stuff.

Depends on the number of people. Solo with $3M @ 3% is $90K. Maybe not live in the Bay Area but Portland, San Jose, Sacramento, Denver, Philly are all a notch down and still nice.

Even as a couple $90K a year isn’t bad. I dunno...seems overwrought to say less than $5M means compromising compared to a normal middle class lifestyle...

Isn't San Jose a part of the Bay Area? It is in the South Bay.