How much money do you want to retire?

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

Post by visualguy » Mon Oct 22, 2018 2:15 pm

The Wizard wrote:
Mon Oct 22, 2018 1:42 pm
visualguy wrote:
Mon Oct 22, 2018 1:35 pm
Not sure - I never actually met anyone who retired truly voluntarily....
You're kidding, right?
Not kidding... I don't personally know anyone who retired truly voluntarily. I'm sure they exist, but not among the retired people I actually know. The ones I know all retired because they pretty much had to - layoffs followed by inability to continue their career, other changes at their jobs or businesses, health issues, reaching mandatory retirement age, etc. I can't think of a single one who retired just because they had enough money and didn't need to work anymore. On the other hand, I know many who could retire based on finances, but don't.

I do know one person who almost did this, but not quite... I "retired" voluntarily a few years ago, but then went back to work, so I don't think that counts. I guess I needed a sabbatical to do some things I couldn't do while working, not permanent retirement.

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

Post by Sandi_k » Tue Oct 23, 2018 1:35 pm

3wood wrote:
Sat Oct 20, 2018 3:23 pm
Sandi_k wrote:
Sat Oct 20, 2018 12:28 pm
3wood wrote:
Sat Oct 20, 2018 9:49 am
wrongfunds wrote:
Sun Sep 30, 2018 3:35 pm
I came across this one while surfing. I think this is reasonable argument for front loading the expenses early years given the actual chance of running out of money while still being alive. I would have thought that this particular article would have been already ripped to shreds in the past but my limited memory does not recall any discussion about it.

How To Spend More Now, Less Later
https://assetbuilder.com/knowledge-cent ... less-later
I've read this a while ago and I think it can work for many. I would have no problem doing this myself if the numbers fell that way. Obviously a bad sequence of returns would have an amplified negative effect if you are pulling over 6% like he suggests. Maybe a higher constant withdrawal with some flexibility based on sequence of returns?
Or you set aside the 6% of the investment portfolio for years 1-10 in bonds, TIPs, CDs, etc., long before you retire. The Sequence of Return risk won't make any difference. You can leave the invested portion alone, and draw down only from your set aside. SoR is most dangerous in the first 10 years - so that will solve the problem.

Our example: We're assuming an investment portfolio of $1.3M on my retirement date. I will have $250k set aside in cash/TIPs/CDs/bonds by that date, leaving an investment portfolio of ~$1M.

In years 1-5 of my retirement, I'll use the $50k each year (of that $250k pot) to live on (5 years x $50k). Plus disperse 3.75% of the remaining portfolio for additional income at a SWR . Thus 3.75% x $1M = Another $37k annually.

In years 6-10, our mortgage is paid off - so that's $30k to the good annually. DH files for Social Security: another $25k per year in income. And 3.75% SWR of ~ $800k = another $30k annually to play with each year.

That gets me to age 70, with my filing for Social Security, and RMDs plus discretionary withdrawals of 4%+ annually from the investment portfolio.

So we plan on at least an extra $50k each year in the first 10 years - which will allow travel, cars, entertainment, etc. that we're sure will be harder and less appealing once we're over 70. And if we're wrong, and we still want to do more at 70? We'll be able to take 4-5% and still be in the SWR territory, since our timeline is now 20 years, instead of 30...
Sounds like a decent bucket strategy approach. I think most gurus recommend a total return approach. Kitces wrote something about it I remember reading. There was no advantage to the buckets. The buckets aren’t really an actual thing. More of a mental construct to help us understand and get comfortable. If it allows you to stick to your plan than I guess it’s fine but it isn’t necessary. I’m sure someone smarter than me can comment further.
Yep, it is a bucket strategy, combined with a Variable Percentage Withdrawal strategy, given my baseline pension. But for me:

- It means I can model it in a simple spreadsheet to share with DH.
- It deals with my fears over Sequence of Return risk by "lockboxing" what we WANT in our early retirement spending bucket.
- It's easy for DH to implement, in case anything happens to me.
- It means we have more money to play with in years 1-10, when we really want to be playing instead of worrying about spending.
- It allows us some possible room for Roth conversions.
- It doesn't rely on any magical thinking, or inheritances.

It gives me a lot of peace every time I update the numbers, and so I feel that it meets the criteria of not taking risk when we don't need to.

47Percent
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Re: How much money do you want to retire?

Post by 47Percent » Tue Oct 23, 2018 1:45 pm

The main deterrent I see for FIRE (Other than the money itself) is peer pressure and not really knowing what to do with one's time.


In most social conversations, the second or third question that comes up is "what do you do".. If you tell them anything other than a position and a company name, the conversation hits a dirt-track right away. But if you tell them you are retired and you are obviously healthy enough to be chugging a few beers, then it hits a wall.


After they come to grips with the fact that it is really true, the first thing they want to know is how do you spend your time. After a while I started asking them what they do on weekends. And then ask them what they do on three-day weekends. And then ask them what they do on four day weekends. They usually get the idea and move on.

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

Post by visualguy » Tue Oct 23, 2018 2:01 pm

47Percent wrote:
Tue Oct 23, 2018 1:45 pm
The main deterrent I see for FIRE (Other than the money itself) is peer pressure and not really knowing what to do with one's time.


In most social conversations, the second or third question that comes up is "what do you do".. If you tell them anything other than a position and a company name, the conversation hits a dirt-track right away. But if you tell them you are retired and you are obviously healthy enough to be chugging a few beers, then it hits a wall.


After they come to grips with the fact that it is really true, the first thing they want to know is how do you spend your time. After a while I started asking them what they do on weekends. And then ask them what they do on three-day weekends. And then ask them what they do on four day weekends. They usually get the idea and move on.
Just curious - what are the occasions for these social conversations? Are these random people you meet at a bar (you mentioned beers)? Anyway, not sure why saying that you're retired would be a conversation killer any more than saying that you work for an insurance company or whatever.

I agree that the money aspect and what to do with your time are issues with early retirement. Peer pressure less so...

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

Post by Elena » Tue Oct 23, 2018 8:24 pm

Lieutenant.Columbo wrote:
Sun Oct 21, 2018 6:33 pm
mmcmonster wrote:
Sat Oct 20, 2018 11:53 am
A couple years ago my wife told me that she could retire if we had $5M in investments. :oops:

She told me yesterday that we could retire if we win the Powerball drawing ($1Billion) tomorrow. So I guess that's something. :beer
poor mmcmonster, his wife will never retire...
Elena wrote:
Sat Oct 20, 2018 1:00 pm
[...]I would like to retire at 1.5M [...] I would not like to retire at the top of the market value.
willthrill81 wrote:
Sat Oct 20, 2018 1:32 pm
Once you reach your number, you might have to wait a while for a bear market, and that may send you below your desired number.
So this mean one's desired number is only relevant if attained during a bear market, isn't it?
I guess so, because many retire at the top of the market, all happy, only to see the decline while there is no longer new money to invest while it gets cheaper. I remember reading about it some 10 years ago, when the last crisis hit. However, since no one knows when the top or bottom will be, I just go by general trend. I would definitely not want to retire right now even if I had hit my number. I put my number on a "stress test" of -25%-ish.

bradshaw1965
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Re: How much money do you want to retire?

Post by bradshaw1965 » Tue Oct 23, 2018 8:41 pm

Elena wrote:
Tue Oct 23, 2018 8:24 pm
Lieutenant.Columbo wrote:
Sun Oct 21, 2018 6:33 pm
mmcmonster wrote:
Sat Oct 20, 2018 11:53 am
A couple years ago my wife told me that she could retire if we had $5M in investments. :oops:

She told me yesterday that we could retire if we win the Powerball drawing ($1Billion) tomorrow. So I guess that's something. :beer
poor mmcmonster, his wife will never retire...
Elena wrote:
Sat Oct 20, 2018 1:00 pm
[...]I would like to retire at 1.5M [...] I would not like to retire at the top of the market value.
willthrill81 wrote:
Sat Oct 20, 2018 1:32 pm
Once you reach your number, you might have to wait a while for a bear market, and that may send you below your desired number.
So this mean one's desired number is only relevant if attained during a bear market, isn't it?
I guess so, because many retire at the top of the market, all happy, only to see the decline while there is no longer new money to invest while it gets cheaper. I remember reading about it some 10 years ago, when the last crisis hit. However, since no one knows when the top or bottom will be, I just go by general trend. I would definitely not want to retire right now even if I had hit my number. I put my number on a "stress test" of -25%-ish.
I know SWR's lack real retirement utility but a "stress test" of 25% just means 4% is probably back to pretty darn safe and that 3.5% you were being conservative with is in the ballpark number anyway.

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

Post by MichDad » Tue Oct 23, 2018 11:04 pm

visualguy wrote:
Mon Oct 22, 2018 2:15 pm
The Wizard wrote:
Mon Oct 22, 2018 1:42 pm
visualguy wrote:
Mon Oct 22, 2018 1:35 pm
Not sure - I never actually met anyone who retired truly voluntarily....
You're kidding, right?
Not kidding... I don't personally know anyone who retired truly voluntarily. I'm sure they exist, but not among the retired people I actually know. The ones I know all retired because they pretty much had to - layoffs followed by inability to continue their career, other changes at their jobs or businesses, health issues, reaching mandatory retirement age, etc. I can't think of a single one who retired just because they had enough money and didn't need to work anymore. On the other hand, I know many who could retire based on finances, but don't.

I do know one person who almost did this, but not quite... I "retired" voluntarily a few years ago, but then went back to work, so I don't think that counts. I guess I needed a sabbatical to do some things I couldn't do while working, not permanent retirement.
For the record, I retired a few months ago -- truly voluntarily. I felt then (and still feel) we have enough money saved/invested. If the domestic and international equities markets drop by 90 percent overnight, I still feel we'll be ok. I wouldn't be happy about such a rapid decline but I believe we could withstand it.

MichDad

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

Post by visualguy » Tue Oct 23, 2018 11:20 pm

MichDad wrote:
Tue Oct 23, 2018 11:04 pm
For the record, I retired a few months ago -- truly voluntarily. I felt then (and still feel) we have enough money saved/invested. If the domestic and international equities markets drop by 90 percent overnight, I still feel we'll be ok. I wouldn't be happy about such a rapid decline but I believe we could withstand it.

MichDad
That's awesome. There are definitely truly voluntary retirees on this forum. I just never met one in "the real world", so I think it isn't all that common.

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

Post by spreadsheetguy » Wed Oct 24, 2018 12:38 am

We want about $60-70k per year from our retirement portfolio in our mid 40s. We have some real-estate that will provide some additional income as well. So about $2M is enough for us to retire.

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

Post by TheTimeLord » Wed Jan 02, 2019 2:47 pm

bump.
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bhsince87
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Re: How much money do you want to retire?

Post by bhsince87 » Wed Jan 02, 2019 5:15 pm

About $3 million did it for me. Today is my first day!
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

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

Post by bligh » Wed Jan 02, 2019 5:23 pm

How much money I want to retire is a function of my age. At 60 I'd do it with $2 million in todays dollars. At my current age (late 30s) I would need about twice that amount to pull the plug. My current plan is to retire around 50-55 with ~$3 million.

Based on that, it looks like each decade of retirement costs about $1million in my case.

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

Post by goodenyou » Wed Jan 02, 2019 5:54 pm

How much are you willing to give?
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wander
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Re: How much money do you want to retire?

Post by wander » Wed Jan 02, 2019 6:39 pm

At 60 with insurance and enough 25 years of expenses + SS + Pension.

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

Post by Leif » Wed Jan 02, 2019 11:56 pm

wander wrote:
Wed Jan 02, 2019 6:39 pm
At 60 with insurance and enough 25 years of expenses + SS + Pension.
How do you determine what is enough for 25 years of expenses? A serious question. Last year * 25 or a more detailed analysis?

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

Post by letsgobobby » Thu Jan 03, 2019 1:52 am

Deleted
Last edited by letsgobobby on Mon Apr 22, 2019 2:14 am, edited 1 time in total.

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

Post by Glockenspiel » Thu Jan 03, 2019 7:15 am

I want $3 million in today’s dollars for wife and I to comfortably retire early (early-mid 50s). Currently 33 with ~650k net worth.

Bacchus01
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Re: How much money do you want to retire?

Post by Bacchus01 » Thu Jan 03, 2019 8:08 am

bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
Awesome. Congrats!

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

Post by snackdog » Thu Jan 03, 2019 1:43 pm

I counted 106 valid entries (current age, retirement age, target amount). Some mixed investments and net worth.

A typical (median) BH is age 46 planning to retire at age 57 with $2.5MM.
A badass would be someone retiring age before age 40 with under $1MM.

Below are percentiles P1-10-50-90-99 for the attributes.

Current age 27-32-46-60-67
Retirement age 40-50-57-65-67
Target $MM 0.6-1.0-2.5-5.0-6.0

Rus In Urbe
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Re: How much money do you want to retire?

Post by Rus In Urbe » Thu Jan 03, 2019 1:51 pm

About $3 million did it for me. Today is my first day!
CONGRATULATIONS! ENJOY!

I'm in the same bucket, and following you in another 12 months.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

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

Post by WhiteMaxima » Thu Jan 03, 2019 2:13 pm

base on 3% withdraw rule, or 3% dividend i expected. My budget is 100k/year I would need 3.3 mil for safe retire.

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Time2Quit
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Re: How much money do you want to retire?

Post by Time2Quit » Thu Jan 03, 2019 2:23 pm

bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
Congrats! :sharebeer May I ask your age?
"It is not the man who has too little, but the man who craves more, that is poor." --Seneca

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

Post by Hikes_With_Dogs » Thu Jan 03, 2019 2:49 pm

bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
CONGRATS!!! :sharebeer

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

Post by visualguy » Thu Jan 03, 2019 2:54 pm

WhiteMaxima wrote:
Thu Jan 03, 2019 2:13 pm
base on 3% withdraw rule, or 3% dividend i expected. My budget is 100k/year I would need 3.3 mil for safe retire.
What happens with long-term care? Would you rely on some kind of insurance for that? For example, say your spouse needs to go into a facility, and you still live independently. Suddenly the expenses are much higher.

bhsince87
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Re: How much money do you want to retire?

Post by bhsince87 » Thu Jan 03, 2019 2:55 pm

letsgobobby wrote:
Thu Jan 03, 2019 1:52 am
bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
Congratulations! And happy New year (it's almost like you planned it that way)!
Thanks! As the old saying goes, "I love it when a plan comes together!"
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

bhsince87
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Re: How much money do you want to retire?

Post by bhsince87 » Thu Jan 03, 2019 2:55 pm

Bacchus01 wrote:
Thu Jan 03, 2019 8:08 am
bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
Awesome. Congrats!
Thanks!
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

bhsince87
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Re: How much money do you want to retire?

Post by bhsince87 » Thu Jan 03, 2019 2:56 pm

Rus In Urbe wrote:
Thu Jan 03, 2019 1:51 pm
About $3 million did it for me. Today is my first day!
CONGRATULATIONS! ENJOY!

I'm in the same bucket, and following you in another 12 months.

My original plan was for January 2020, but I asked for an early buy-out and got it!
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

bhsince87
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Re: How much money do you want to retire?

Post by bhsince87 » Thu Jan 03, 2019 2:57 pm

Time2Quit wrote:
Thu Jan 03, 2019 2:23 pm
bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
Congrats! :sharebeer May I ask your age?
Thanks! A few months shy of age 54.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

bhsince87
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Re: How much money do you want to retire?

Post by bhsince87 » Thu Jan 03, 2019 2:57 pm

Hikes_With_Dogs wrote:
Thu Jan 03, 2019 2:49 pm
bhsince87 wrote:
Wed Jan 02, 2019 5:15 pm
About $3 million did it for me. Today is my first day!
CONGRATS!!! :sharebeer
Thanks!
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

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

Post by marcopolo » Thu Jan 03, 2019 3:07 pm

bhsince87 wrote:
Thu Jan 03, 2019 2:56 pm
Rus In Urbe wrote:
Thu Jan 03, 2019 1:51 pm
About $3 million did it for me. Today is my first day!
CONGRATULATIONS! ENJOY!

I'm in the same bucket, and following you in another 12 months.

My original plan was for January 2020, but I asked for an early buy-out and got it!
Congrats!!
I did the same about a year ago.
Enjoy your retirement.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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

Post by wander » Thu Jan 03, 2019 4:33 pm

Leif wrote:
Wed Jan 02, 2019 11:56 pm
wander wrote:
Wed Jan 02, 2019 6:39 pm
At 60 with insurance and enough 25 years of expenses + SS + Pension.
How do you determine what is enough for 25 years of expenses? A serious question. Last year * 25 or a more detailed analysis?
Every year, we receive spending report from our credit cards. That's our starting point. We add all the checks written and cash withdrawals during the years (this can be done easily with online checking search function). We then multiply with 1.1 for the unexpected spending for next year.

Thegame14
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Re: How much money do you want to retire?

Post by Thegame14 » Thu Jan 03, 2019 5:47 pm

I am 38, have about $500K in assets, looking at another $550-$750K in inheritance hopefully many many years from now, hoping to semi-retire at 55 with $2-3M in invested assets and run a side business in retirement that hopefully one of my sons will want to inherit from me and we can work together.

Rus In Urbe
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Re: How much money do you want to retire?

Post by Rus In Urbe » Thu Jan 03, 2019 5:47 pm

Rus In Urbe wrote: ↑Thu Jan 03, 2019 2:51 pm
About $3 million did it for me. Today is my first day!
CONGRATULATIONS! ENJOY!

I'm in the same bucket, and following you in another 12 months.

My original plan was for January 2020, but I asked for an early buy-out and got it!
Early Buy Out? WOOOOOO-HOOOOOOO! I'm not getting one of those, alas, but I'm counting the hours/minutes/seconds.
Enjoy, my friend!
I'd like to live as a poor man with lots of money. ~Pablo Picasso

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

Post by LadyGeek » Thu Jan 03, 2019 7:19 pm

For those who will retire this year, feel free to post the details here: Roll Call for the Retirement Class of 2019!
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KJVanguard
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Re: How much money do you want to retire?

Post by KJVanguard » Thu Jan 03, 2019 11:17 pm

Have a net worth of $2.9M. Don't really have a choice regarding how much I want to retire with as I am disabled and unable to earn income, so I have to make due with what I have.

Vettel Leclerc
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Re: How much money do you want to retire?

Post by Vettel Leclerc » Fri Jan 04, 2019 9:58 am

My wife and I just hit 3M in investable assets. We also have a paid for house worth 1.2M. (Only us and our dog.)

I am 46.5, and my wife is 44. I am the sole breadwinner. I've had an original plan of early retirement for quite some time. At the beginning of 2018, I had a discussion with my wife and we agreed that the rat race as it stands is killing me, and the plan needed to be moved up.

We decided to drastically reduce our spending and hoard money away. Fortunately, we had a good year financially and actually put 440k into retirement savings in 2018. We plan to try to keep this up until the day I turn 49, when I will then go 1/2 time. Hope to have around 4.25M by then.

I plan to then work 1/2 time until age 55, during which time we plan to only fund tax advantaged accounts / profit sharing / HSA, and let loose a bit on the spending and giving. Hope to have 7-8M at actual retirement, but the actual number is irrelevant. NOT going past 55!

I know that this is fairly heavy FAT FIRE, but unfortunately some of our tastes are more expensive than I'd like. It is going to be a bit of a balancing act from this point as to where we choose to end up financially.

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

Post by TheTimeLord » Fri Jan 04, 2019 10:23 am

Since the question is "want", I would say another $150,000-$250,000. But I chronically reset the goalposts and believe I could retire comfortably today.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

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

Post by Leif » Fri Jan 04, 2019 2:23 pm

wander wrote:
Thu Jan 03, 2019 4:33 pm
Leif wrote:
Wed Jan 02, 2019 11:56 pm
wander wrote:
Wed Jan 02, 2019 6:39 pm
At 60 with insurance and enough 25 years of expenses + SS + Pension.
How do you determine what is enough for 25 years of expenses? A serious question. Last year * 25 or a more detailed analysis?
Every year, we receive spending report from our credit cards. That's our starting point. We add all the checks written and cash withdrawals during the years (this can be done easily with online checking search function). We then multiply with 1.1 for the unexpected spending for next year.
I built a spreadsheet for 20 years. Expected Income and sources at the top, followed by major expense categories, from that I get cash flow, and lastly Assets. I added a cell for inflation/growth factor.

Since I'm retired I just keep separate income/expense accounts and investment accounts. I then just track any movement between the two types of accounts (about once every 2-3 months). Then I can compute my withdrawal rate, versus expected from my spreadsheet.

But current year, adjusted for exception expenses, and not yet realized income (like SS), with a factor for future years is a reasonable way to go. 10% might be too high. That means your expenses will double every 7.2 years.
Last edited by Leif on Fri Jan 04, 2019 11:29 pm, edited 1 time in total.

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

Post by gluskap » Fri Jan 04, 2019 7:07 pm

My goal is $2-2.5M and a paid off house.

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

Post by JimMolony » Fri Jan 04, 2019 8:02 pm

$2-2.5M, paid off house.

SS roughly $3k a month
Pension roughly $3k a month

This will be more than enough for our needs.

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

Post by boglemania » Fri Jan 04, 2019 8:25 pm

investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.

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

Post by HomerJ » Fri Jan 04, 2019 9:13 pm

boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Some people here are super conservative, shooting for 3% withdrawals and completely ignoring Social Security.

It's a bit over the top conservative, BUT these are people who are young, making a ton of money, and it's really not a huge sacrifice to work a few years longer (since they are in their late 40s or early 50s) to give themselves a bigger buffer that they almost certainly won't need.
Last edited by HomerJ on Fri Jan 04, 2019 9:16 pm, edited 1 time in total.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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

Post by Soundwall » Fri Jan 04, 2019 9:15 pm

I just want us to be healthy at retirement. The x amount means nothing if you can't enjoy it or be with your significant other

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

Post by marcopolo » Fri Jan 04, 2019 9:18 pm

HomerJ wrote:
Fri Jan 04, 2019 9:13 pm
boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Some people here are super conservative, shooting for 3% withdrawals and completely ignoring Social Security.

It's quite a bit over the top conservative, BUT these are people who are young, making a ton of money, and it's really not a huge sacrifice to work a few years longer (since they are in their late 40s or early 50s) to give themselves a bigger buffer that they almost certainly won't need.
While that is most likely true, I would also think it would be prudent to be more conservative than the 4% withdrawal rate for young retirees that have a much longer retirement to consider than the 30 years modeled in the Trinity, Bengen, and other studies. Not only does the money need to last longer, but the dispersion of returns is also wider as the time horizon is extended.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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

Post by radiowave » Fri Jan 04, 2019 9:21 pm

boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Don't forget that all tax-deferred funds, e.g. 401k, IRA, etc. you'll have to pay federal and maybe state income tax on withdrawal.
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ » Fri Jan 04, 2019 9:23 pm

marcopolo wrote:
Fri Jan 04, 2019 9:18 pm
HomerJ wrote:
Fri Jan 04, 2019 9:13 pm
boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Some people here are super conservative, shooting for 3% withdrawals and completely ignoring Social Security.

It's quite a bit over the top conservative, BUT these are people who are young, making a ton of money, and it's really not a huge sacrifice to work a few years longer (since they are in their late 40s or early 50s) to give themselves a bigger buffer that they almost certainly won't need.
While that is most likely true, I would also think it would be prudent to be more conservative than the 4% withdrawal rate for young retirees that have a much longer retirement to consider than the 30 years modeled in the Trinity, Bengen, and other studies. Not only does the money need to last longer, but the dispersion of returns is also wider as the time horizon is extended.
That is a good point, but 3% AND completely ignoring SS (which for high earners will be a fairly big chunk of that $120k) is probably more conservative than necessary.

Again, I don't fault them at all... If I had kids at home, was in my early 50s, and had 25x expenses with a decent job, I wouldn't retire either... Another few years to get the kids out of the house, and get to 33x expenses is no huge sacrifice, and DOES give one more peace of mind.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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

Post by HomerJ » Fri Jan 04, 2019 9:26 pm

radiowave wrote:
Fri Jan 04, 2019 9:21 pm
boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Don't forget that all tax-deferred funds, e.g. 401k, IRA, etc. you'll have to pay federal and maybe state income tax on withdrawal.
Taxes are almost always lower in retirement. Especially if you have any money in taxable accounts or the bank.

A couple hundred thousand outside your 401k and IRAs lets you easily game the tax system for the first 5-10 years.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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

Post by schachtw » Fri Jan 04, 2019 9:29 pm

My wife and I retired mid 2016, shortly after we turned 65. We had accumulated 4.2MM at that time, so our retirement was totally voluntary.

Our retirement investments (an offshoot of the 3 fund portfolio) have grown to 5MM. BTW, our AA is 50/50.

marcopolo
Posts: 3054
Joined: Sat Dec 03, 2016 10:22 am

Re: How much money do you want to retire?

Post by marcopolo » Fri Jan 04, 2019 9:30 pm

HomerJ wrote:
Fri Jan 04, 2019 9:23 pm
marcopolo wrote:
Fri Jan 04, 2019 9:18 pm
HomerJ wrote:
Fri Jan 04, 2019 9:13 pm
boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Some people here are super conservative, shooting for 3% withdrawals and completely ignoring Social Security.

It's quite a bit over the top conservative, BUT these are people who are young, making a ton of money, and it's really not a huge sacrifice to work a few years longer (since they are in their late 40s or early 50s) to give themselves a bigger buffer that they almost certainly won't need.
While that is most likely true, I would also think it would be prudent to be more conservative than the 4% withdrawal rate for young retirees that have a much longer retirement to consider than the 30 years modeled in the Trinity, Bengen, and other studies. Not only does the money need to last longer, but the dispersion of returns is also wider as the time horizon is extended.
That is a good point, but 3% AND completely ignoring SS (which for high earners will be a fairly big chunk of that $120k) is probably more conservative than necessary.

Again, I don't fault them at all... If I had kids at home, was in my early 50s, and had 25x expenses with a decent job, I wouldn't retire either... Another few years to get the kids out of the house, and get to 33x expenses is no huge sacrifice, and DOES give one more peace of mind.
Agreed. I was just pointing out that going below 4% is not unreasonably conservative for someone relying on their portfolio as their only source of income in their 40s/early 50s.
Once in a while you get shown the light, in the strangest of places if you look at it right.

marcopolo
Posts: 3054
Joined: Sat Dec 03, 2016 10:22 am

Re: How much money do you want to retire?

Post by marcopolo » Fri Jan 04, 2019 9:33 pm

radiowave wrote:
Fri Jan 04, 2019 9:21 pm
boglemania wrote:
Fri Jan 04, 2019 8:25 pm
investingdad wrote:
Wed Jun 06, 2018 8:28 am
I'm happy with our current lifestyle. Our expenses are between 120k and 130k. That includes two kids in the house. When they move out (both middle school age right now), I envision the same level of expenses which should give us a small lifestyle bump.

I think 4.5 million will pay for that over a 40 year retirement.

So we need to accumulate another two million in the next 9 years. Time will tell.
You are the second poster to use those terms (4+ mil for 120-130) .We were going to retire with 3.5mil for 130K/yr (not basic but all we want to do). We thought 4% of 3.5 is 140 K , plus soc security, we would be ok. Are we estimating incorrectly? (no pension).House paid off. No debt. No kids.Retire in 2 yrs so maybe have a little more or little less. Can live off 90 easy though.
Don't forget that all tax-deferred funds, e.g. 401k, IRA, etc. you'll have to pay federal and maybe state income tax on withdrawal.
The withdrawal rates are almost always stated with taxes included. That is, if you are withdrawing 4% SWR, you need to pay taxes out that 4% and live on the rest. You don't get to withdraw more, pay taxes, and live then on 4%. That would result in a slightly higher SWR scenario.

That being said, if you plan properly, you can keep your taxes quite low, even with a fairly generous annual budget.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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