How much money do you want to retire?

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

Post by EnjoyIt »

Firemenot wrote: Sat Nov 21, 2020 5:49 pm
EnjoyIt wrote: Sat Nov 21, 2020 5:43 pm
Firemenot wrote: Sat Nov 21, 2020 5:01 pm
Marseille07 wrote: Sat Nov 21, 2020 4:56 pm
Firemenot wrote: Sat Nov 21, 2020 4:52 pm

I’m not saying there’s anything wrong with the financial plan. I came very close to pulling the plug in my mid/late 30s. Was living in a location I didn’t like (frozen tundra) and had bought into the siren song of the FIRE movement. Now approaching mid 40s I’m very happy I didn’t pull the plug.
That's interesting to hear. I'm somewhere similar and considering to retire mid-to-late next year, though it's possible I might regret. It's not easy to foresee what might happen.
Not sure if this applies to you or not, but be very careful about reading too many FIRE blogs/forums and thinking about it too much. It’s not a path to contentment in my experience. Even some of its biggest proponents have admitted as much (e.g., the Madfienist). Also, once you hit your 40s your professional situation can change a lot. Much more autonomy, more interesting projects, ability to delegate the dog work, being higher up and more respected in people structures, being at the cutting edge of an industry, etc. I’m so energized these days that I’ve even started a Covid side hustle.
I think that’s where the saying comes from “retire to something, not from something.”

We were on the path to FIRE as well, but I realize that I enjoy life more with some part time work. It gives structure to my week and allows me to socialize. Both of these make me happier. The extra cash does not hurt either. Knowing I can walk away anytime I please is more valuable than just FIRE on its own.
My dream situation would be 20-25 hours of interesting paid work a week for 40-45 weeks a year. One reason I’ve started a side company.
I’m lucky enough to find a job that has me working 36-46 hours every 2 weeks. So it’s either a long weekend every week or I can work one week straight and then have a week off. Every two weeks. It’s perfect.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ »

aktx97 wrote: Sat Nov 21, 2020 3:46 pm My "number" is $5 million between bank accounts, retirement and taxable accounts. I used an inflation calculator for the year 2070 to come to that amount. I figure I wouldn't ever run out of money using the 4% rule.
$200,000 a year is what you get from 4% from $5 million.

I'm glad that's enough for you. :oops:

FYI.. NO ONE knows what inflation will be in the years from 2020 to 2070... Whatever "calculator" you are using is almost certainly wrong.
Last edited by HomerJ on Sun Nov 22, 2020 12:06 am, 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.”
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ »

cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
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.”
Dicast
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Re: How much money do you want to retire?

Post by Dicast »

Initial goal was 45 with 2.5 mil.

I'm sitting at 1.5 mil at age 38 and I just don't see myself retiring at 45 anymore. I seriously don't know what I'd do with myself. Maybe I will just keep cutting back hours and have the goal be FI at 45.

Now the retirement goal is more like 5 million by something like 50-55 but that is just arbitrary because my expenses just don't need 5 million and I doubt my wife will ever stop working. I'm not sure I'll ever stop working.
flaccidsteele
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Re: How much money do you want to retire?

Post by flaccidsteele »

I’m in my 40s with almost $6m

$12m pretty reasonable if I do absolutely nothing, and live to age 65

I’ll set a stretch goal of $30m (UHNW)

NB: UHNW definition likely to change by then, but whatever
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
chipperd
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Re: How much money do you want to retire?

Post by chipperd »

HomerJ wrote: Sun Nov 22, 2020 12:04 am
cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
I find myself asking the same question. I think philosophically, I just live in a different world, choosing a life style that puts living over working rather than working over living.
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
kd2008
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Re: How much money do you want to retire?

Post by kd2008 »

This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Firemenot
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Re: How much money do you want to retire?

Post by Firemenot »

chipperd wrote: Sun Nov 22, 2020 5:55 am
HomerJ wrote: Sun Nov 22, 2020 12:04 am
cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
I find myself asking the same question. I think philosophically, I just live in a different world, choosing a life style that puts living over working rather than working over living.
For some people working their jobs is generally a lot of fun and rewarding. Purpose in life, contributing to society, mental challenges, socialization, structured life, etc,
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TomatoTomahto
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Re: How much money do you want to retire?

Post by TomatoTomahto »

Firemenot wrote: Sun Nov 22, 2020 8:10 am For some people working their jobs is generally a lot of fun and rewarding. Purpose in life, contributing to society, mental challenges, socialization, structured life, etc,
In addition to those features of work, I think for some (I mean you, darling wife) there is wanting to finally be treated with the respect and appreciation you should have received decades ago, in her particular case as a woman in a tech field.

I have stopped urging her to retire, although a spreadsheet would say she could have years ago. Who am I to deprive her of belated justice?
I get the FI part but not the RE part of FIRE.
cb122
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Re: How much money do you want to retire?

Post by cb122 »

HomerJ wrote: Sun Nov 22, 2020 12:04 am
cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
I live/rent in a LCOL Midwest city. Currently spend around $25k a year. I expect that number to go up as I move towards retirement though. No social security as the Non-COLA pension replaces that. Admittedly, I'm sure I am being overly conservative with my savings for future goals. Though, it won't be out of the realm of possibilities to spend $2m on farmland. Or, deploy my savings to move and live in the mountains.
chipperd wrote: Sun Nov 22, 2020 5:55 am

I find myself asking the same question. I think philosophically, I just live in a different world, choosing a life style that puts living over working rather than working over living.
I'd agree that we probably differ in this area. Could possibly stem from upbringings. I was tasked with responsibility beginning at age 12 by helping my dad on our family farm. Competitive sports and part-time job came along with that. I also enjoy being busy. I'm now starting to see the light, slow down a bit, and avoid the headaches of grinding in a profession. Grinding in a .gov job will leave you with a lot to be desired. :oops:

Using more energy into hobbies and personal life these days. :sharebeer
Firemenot wrote: Sun Nov 22, 2020 8:10 am

For some people working their jobs is generally a lot of fun and rewarding. Purpose in life, contributing to society, mental challenges, socialization, structured life, etc,
Agree, I enjoy the mental stimulation and productivity aspects of work. It's been quite a change to slow down.
chipperd
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Re: How much money do you want to retire?

Post by chipperd »

CB112
"I'd agree that we probably differ in this area. Could possibly stem from upbringings. I was tasked with responsibility beginning at age 12 by helping my dad on our family farm. Competitive sports and part-time job came along with that. I also enjoy being busy. I'm now starting to see the light, slow down a bit, and avoid the headaches of grinding in a profession. Grinding in a .gov job will leave you with a lot to be desired. :oops:"

Funny, sounds like we grew up in the same household as I started working on farms at age 12-16 as well (fruit and tobacco), then moved on to gas station type jobs and sweat a heck of a lot less. Many hours during high school. Competitive sports since age 10. Worked my way through college and grad school.
Now that I'm FI and very part time, I work for myself on my own property, which I find rewarding.
After 40 years of that at age 53 with a pension and "only" $850k, I just bask in the idea of work as an option every day for the rest of my life.
Some things change, and some things remain the same...
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
cb122
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Re: How much money do you want to retire?

Post by cb122 »

chipperd wrote: Sun Nov 22, 2020 8:54 am CB112
"I'd agree that we probably differ in this area. Could possibly stem from upbringings. I was tasked with responsibility beginning at age 12 by helping my dad on our family farm. Competitive sports and part-time job came along with that. I also enjoy being busy. I'm now starting to see the light, slow down a bit, and avoid the headaches of grinding in a profession. Grinding in a .gov job will leave you with a lot to be desired. :oops:"

Funny, sounds like we grew up in the same household as I started working on farms at age 12-16 as well (fruit and tobacco), then moved on to gas station type jobs and sweat a heck of a lot less. Many hours during high school. Competitive sports since age 10. Worked my way through college and grad school.
Now that I'm FI and very part time, I work for myself on my own property, which I find rewarding.
Some things change, and some things remain the same...
From what you describe, I think if we traded spots growing up we wouldn't know the difference. I think we are on a similar trajectory. I just moved to better hours, low stress, and extended weekends and will probably forego promotions, higher salary, and the future headaches that come along with it. Eventually I will use my energy to build up farmland and hunt....a lot. No debt and lbym towards financial independence has it's perks.
Firemenot
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Re: How much money do you want to retire?

Post by Firemenot »

cb122 wrote: Sun Nov 22, 2020 8:51 am
HomerJ wrote: Sun Nov 22, 2020 12:04 am
cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
I live/rent in a LCOL Midwest city. Currently spend around $25k a year. I expect that number to go up as I move towards retirement though. No social security as the Non-COLA pension replaces that. Admittedly, I'm sure I am being overly conservative with my savings for future goals. Though, it won't be out of the realm of possibilities to spend $2m on farmland. Or, deploy my savings to move and live in the mountains.
chipperd wrote: Sun Nov 22, 2020 5:55 am

I find myself asking the same question. I think philosophically, I just live in a different world, choosing a life style that puts living over working rather than working over living.
I'd agree that we probably differ in this area. Could possibly stem from upbringings. I was tasked with responsibility beginning at age 12 by helping my dad on our family farm. Competitive sports and part-time job came along with that. I also enjoy being busy. I'm now starting to see the light, slow down a bit, and avoid the headaches of grinding in a profession. Grinding in a .gov job will leave you with a lot to be desired. :oops:

Using more energy into hobbies and personal life these days. :sharebeer
Firemenot wrote: Sun Nov 22, 2020 8:10 am

For some people working their jobs is generally a lot of fun and rewarding. Purpose in life, contributing to society, mental challenges, socialization, structured life, etc,
Agree, I enjoy the mental stimulation and productivity aspects of work. It's been quite a change to slow down.
I think many/most people are wired to do productive work, and some level of it is necessary for contentment. A life can certainly be structured as such after retirement, but it takes a certain sort of personality type to do that. Many who desire to “retire to something”, ultimately retire to nothing — even though that wasn’t/isn’t what they aspired to do. I think in some ways it’s like working out. Most people want and intend to do it, but very few actually follow through on a regular basis.
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mrspock
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Re: How much money do you want to retire?

Post by mrspock »

Fun thread. Here's my number: $4M investable assets + 2 paid off HCOL houses, NW north of ~$7M+ by time I retire in 1-2 years in my mid 40s. Unmarried, no kids.

I'll probably retire with a bit more margin than this, but that's the plan. I'll probably use a SWR of 3.5-4% as if tail risk shows up or returns are lower than projected I have multiple mitigation options:

1. Reduce spending
2. Sell or rent a house
3. Move to a LCOL

I figure at 3.5% SWR this gets me >$10k/month spending which is honestly an absurd amount. I shouldn't come any where close to that most months. I plan to fly biz class, refresh the car to something nice (~$50k) every 8-10yrs, keep up to date on my tech toys and travel regularly. Life should be good.
AussieDad
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Re: How much money do you want to retire?

Post by AussieDad »

1.8M and a $1500 a month pension. No debts by retirement. I'm 55 now and hope to retire by 62.
MathIsMyWayr
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Re: How much money do you want to retire?

Post by MathIsMyWayr »

TomatoTomahto wrote: Sun Nov 22, 2020 8:20 am
Firemenot wrote: Sun Nov 22, 2020 8:10 am For some people working their jobs is generally a lot of fun and rewarding. Purpose in life, contributing to society, mental challenges, socialization, structured life, etc,
In addition to those features of work, I think for some (I mean you, darling wife) there is wanting to finally be treated with the respect and appreciation you should have received decades ago, in her particular case as a woman in a tech field.

I have stopped urging her to retire, although a spreadsheet would say she could have years ago. Who am I to deprive her of belated justice?
Or ask Hillary, I mean Sir Hillary of Everest.
flaccidsteele
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Re: How much money do you want to retire?

Post by flaccidsteele »

kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
+1 agree

It may not be a “quest to pad numbers”. After a certain point the wealth grows without supervision

The numbers pad themselves

At that point Life is just being lived
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
angelescrest
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Re: How much money do you want to retire?

Post by angelescrest »

7eight9 wrote: Thu Nov 19, 2020 2:40 pm My wife and I are planning to call it quits with $1.5+M and a paid-off condo (which will be rented). Moving overseas where healthcare is more affordable and overall cost of living is cheaper.
What locations are you considering, and how are you calculating the annual expenses? We are interested in this possibility, also at about 1.5-2 mil. But with kids, college, etc., not sure how realistic it is.
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aktx97
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Re: How much money do you want to retire?

Post by aktx97 »

HomerJ wrote: Sun Nov 22, 2020 12:01 am
aktx97 wrote: Sat Nov 21, 2020 3:46 pm My "number" is $5 million between bank accounts, retirement and taxable accounts. I used an inflation calculator for the year 2070 to come to that amount. I figure I wouldn't ever run out of money using the 4% rule.
$200,000 a year is what you get from 4% from $5 million.

I'm glad that's enough for you. :oops:

FYI.. NO ONE knows what inflation will be in the years from 2020 to 2070... Whatever "calculator" you are using is almost certainly wrong.
$5m in 2070 dollars. I realize inflation in 50 years may be different, but I have to start somewhere.
Keep calm and stay the course.
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ »

aktx97 wrote: Sun Nov 22, 2020 11:03 am
HomerJ wrote: Sun Nov 22, 2020 12:01 am
aktx97 wrote: Sat Nov 21, 2020 3:46 pm My "number" is $5 million between bank accounts, retirement and taxable accounts. I used an inflation calculator for the year 2070 to come to that amount. I figure I wouldn't ever run out of money using the 4% rule.
$200,000 a year is what you get from 4% from $5 million.

I'm glad that's enough for you. :oops:

FYI.. NO ONE knows what inflation will be in the years from 2020 to 2070... Whatever "calculator" you are using is almost certainly wrong.
$5m in 2070 dollars. I realize inflation in 50 years may be different, but I have to start somewhere.
Ah my apologies then... $5 million in 2070 dollars is indeed different.

50 years is a long time... Are you a smart teenager? :) Or are you 30 and plan to retire at 80?
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.”
EnjoyIt
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Re: How much money do you want to retire?

Post by EnjoyIt »

flaccidsteele wrote: Sun Nov 22, 2020 9:42 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
+1 agree

It may not be a “quest to pad numbers”. After a certain point the wealth grows without supervision

The numbers pad themselves

At that point Life is just being lived
Today we are working for money we don’t need and just padding what we have. On good days the return of our portfolio can easily be 6+ months of expenses. On those days I sometimes wonder why I’m still putting in hours for someone else.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
flaccidsteele
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Re: How much money do you want to retire?

Post by flaccidsteele »

EnjoyIt wrote: Sun Nov 22, 2020 1:37 pm
flaccidsteele wrote: Sun Nov 22, 2020 9:42 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
+1 agree

It may not be a “quest to pad numbers”. After a certain point the wealth grows without supervision

The numbers pad themselves

At that point Life is just being lived
Today we are working for money we don’t need and just padding what we have. On good days the return of our portfolio can easily be 6+ months of expenses. On those days I sometimes wonder why I’m still putting in hours for someone else.
+1 that’s why I stopped working for a salary
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
chipperd
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Re: How much money do you want to retire?

Post by chipperd »

flaccidsteele wrote: Sun Nov 22, 2020 1:40 pm
EnjoyIt wrote: Sun Nov 22, 2020 1:37 pm
flaccidsteele wrote: Sun Nov 22, 2020 9:42 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
+1 agree

It may not be a “quest to pad numbers”. After a certain point the wealth grows without supervision

The numbers pad themselves

At that point Life is just being lived
Today we are working for money we don’t need and just padding what we have. On good days the return of our portfolio can easily be 6+ months of expenses. On those days I sometimes wonder why I’m still putting in hours for someone else.
+1 that’s why I stopped working for a salary
If that's the case wouldn't every day be a day where you wonder why you are working for someone else?
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
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aktx97
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Re: How much money do you want to retire?

Post by aktx97 »

HomerJ wrote: Sun Nov 22, 2020 1:00 pm
aktx97 wrote: Sun Nov 22, 2020 11:03 am
HomerJ wrote: Sun Nov 22, 2020 12:01 am
aktx97 wrote: Sat Nov 21, 2020 3:46 pm My "number" is $5 million between bank accounts, retirement and taxable accounts. I used an inflation calculator for the year 2070 to come to that amount. I figure I wouldn't ever run out of money using the 4% rule.
$200,000 a year is what you get from 4% from $5 million.

I'm glad that's enough for you. :oops:

FYI.. NO ONE knows what inflation will be in the years from 2020 to 2070... Whatever "calculator" you are using is almost certainly wrong.
$5m in 2070 dollars. I realize inflation in 50 years may be different, but I have to start somewhere.
Ah my apologies then... $5 million in 2070 dollars is indeed different.

50 years is a long time... Are you a smart teenager? :) Or are you 30 and plan to retire at 80?
I wish I were a smart teenager! I'm 31 and just started saving for retirement this year. When I was looking at that inflation calculator, I thought I should go out 20 years after my planned retirement age of 60 just to give myself more "room". I don't know if that's right, but I wanted to see what money might be worth then.
Keep calm and stay the course.
flaccidsteele
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Re: How much money do you want to retire?

Post by flaccidsteele »

chipperd wrote: Sun Nov 22, 2020 2:45 pm
flaccidsteele wrote: Sun Nov 22, 2020 1:40 pm
EnjoyIt wrote: Sun Nov 22, 2020 1:37 pm
flaccidsteele wrote: Sun Nov 22, 2020 9:42 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
+1 agree

It may not be a “quest to pad numbers”. After a certain point the wealth grows without supervision

The numbers pad themselves

At that point Life is just being lived
Today we are working for money we don’t need and just padding what we have. On good days the return of our portfolio can easily be 6+ months of expenses. On those days I sometimes wonder why I’m still putting in hours for someone else.
+1 that’s why I stopped working for a salary
If that's the case wouldn't every day be a day where you wonder why you are working for someone else?
Yes. That’s why I retired in my 40s

There was no point trading my Life for a salary when I didn’t even use the money that I made
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
texasdiver
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Re: How much money do you want to retire?

Post by texasdiver »

kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Retirement isn't just a question of account balances. It's also a question of timing. My wife and I are 7 years away from [hopefully] seeing our youngest child graduate from college. We have set that as our tentative retirement date. We don't want to pull the trigger too early while we still have dependents and children who are not launched. Based on our current retirement balance and contribution rate we are likely to wind up with a nest egg somewhere between $2.5 and $3.5 million in 7 years depending on what rate of return we get between then and now. Either number will meet our goal and will be more than adequate. If we get way ahead of the game we might dial back the working hours and such. But my wife is a physician and unlikely to walk away from the profession completely before that. She will be 57 in 7 years so that is already early retirement for the average physician. She might well decide to continue for another decade with part-time locum work just to keep her feet wet, not for the money, while we travel and relax the other 6 or so months out of the year.

I'm doing part time teaching which I actually enjoy. So I'm in no hurry to hang that up and will continue as long as my wife is working as well, just to have something to do and get out of the house.

Our actual plan is to test-drive our retirement in year 8 when we are free of children by cutting back the work hours and spending to the exact amount that our portfolio will provide. Or at least cutting our spending to that amount. So, for example, if our portfolio is $2.5 million then we will spend a year living on exactly 4% of that or $100,000 as a test drive of our retirement budget (before pulling the plug on careers). Because we will be [hopefully] moving from supporting kids to supporting just ourselves at the same time we plan to retire and we won't really have a good idea of how our spending is going to look until we have a year or two of empty nest lifestyle under our belts.
Wannaretireearly
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Re: How much money do you want to retire?

Post by Wannaretireearly »

$3M in 8 years @ age 50. Got some catching up to do!
A more tangible goal is $1M in taxable accounts at age 50, which should get me from 50 to 60. After 60 it'll be easier to tap retirement accounts.

This site is great at keeping us focused on good sound goals!
Buy Low, Sell High
just1question
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Re: How much money do you want to retire?

Post by just1question »

kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
I don't believe that those people seeking to "pad numbers" are in all cases on quests to reach a number with no "marginal utility." Rather, I suspect many people (including myself) have a "want" magic number that factors in the possibility of a market decline or recession. For example, someone who projects that $2.4 M is enough to live on for their rest of their lives might want $3 M in order to safeguard against a 20% decline/recession in the market. That is not an unreasonable assumption.
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ »

just1question wrote: Mon Nov 23, 2020 8:34 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
I don't believe that those people seeking to "pad numbers" are in all cases on quests to reach a number with no "marginal utility." Rather, I suspect many people (including myself) have a "want" magic number that factors in the possibility of a market decline or recession. For example, someone who projects that $2.4 M is enough to live on for their rest of their lives might want $3 M in order to safeguard against a 20% decline/recession in the market. That is not an unreasonable assumption.
You make a good point.

We're a very conservative group here on Bogleheads.
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.”
Dennisl
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Re: How much money do you want to retire?

Post by Dennisl »

I’m hoping for 2.5-3 when I tap out at 65. May need to work longer depending on how much support parents and kids end up needing. Seriously, being FI is one of the best gifts you can give to your children. It’s been a much bigger drag on savings and preparing for the future than school loans.
spreadsheetguy
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Re: How much money do you want to retire?

Post by spreadsheetguy »

47 now and would like $2million+ by 52 (about 2/3 of the way there now!)
goos_news
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Re: How much money do you want to retire?

Post by goos_news »

HomerJ wrote: Mon Nov 23, 2020 10:27 am
just1question wrote: Mon Nov 23, 2020 8:34 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
I don't believe that those people seeking to "pad numbers" are in all cases on quests to reach a number with no "marginal utility." Rather, I suspect many people (including myself) have a "want" magic number that factors in the possibility of a market decline or recession. For example, someone who projects that $2.4 M is enough to live on for their rest of their lives might want $3 M in order to safeguard against a 20% decline/recession in the market. That is not an unreasonable assumption.
You make a good point.

We're a very conservative group here on Bogleheads.
This^^^ Everytime we've run an analysis or simulation, the spouse wants all the numbers dialed back (growth, inflation, age etc) to overfund a target minimum spend (which is above expenses, so it is padded). It ends up being to a point, however, where we 3x funded to expenses, even at those assumptions. It is the price of lack of stress in future variation that will be nice.
nguy44
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Re: How much money do you want to retire?

Post by nguy44 »

just1question wrote: Mon Nov 23, 2020 8:34 am
I don't believe that those people seeking to "pad numbers" are in all cases on quests to reach a number with no "marginal utility." Rather, I suspect many people (including myself) have a "want" magic number that factors in the possibility of a market decline or recession. For example, someone who projects that $2.4 M is enough to live on for their rest of their lives might want $3 M in order to safeguard against a 20% decline/recession in the market. That is not an unreasonable assumption.
This is very true. This is how I approached my retirement. All the calculators and advisors said we would be fine with $2 million, but in my analysis I wanted to achieve a SWR (safe withdrawal rate) closer to 2%. Also, even though I have a good pension from a strong company, I did not want to take it entirely for granted. So I set our target to $2.5 million. 2.5 years in retirement, working a little longer to reach that level was worth it.
eldinerocheapo
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Re: How much money do you want to retire?

Post by eldinerocheapo »

63 with $2 M. I've got a wife, two kids and a bartender to support, not to mention greens fees at numerous local golf courses. I'm having a great time going broke slowly.
"Do, or do not." Yoda
nigel_ht
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Re: How much money do you want to retire?

Post by nigel_ht »

eldinerocheapo wrote: Mon Nov 23, 2020 2:35 pm 63 with $2 M. I've got a wife, two kids and a bartender to support, not to mention greens fees at numerous local golf courses. I'm having a great time going broke slowly.
Better these folks than your cardiologist...
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luminous
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Re: How much money do you want to retire?

Post by luminous »

kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
For my part, my desire to have more than $2M at retirement is because of a few things, but all of it comes down to being cautious and conservative so I can sleep well at night:
  • I want to semi-retire in my late-40s.
  • After a few years away from my very high paying job it will be hard to get back into that industry at the same pay.
  • We may need to support our parents with long term care costs in the future. One of our grandparents just passed away at 101 after 10 years with dementia. Another grandparent is about to go into assisted living at 90.
  • We want to pay for college for our children.
  • We want to be able to self-support our own possible long term care costs.
50/20/30 US stock/international stock/bonds. Hope to semi-retire in 2022.
EnjoyIt
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Re: How much money do you want to retire?

Post by EnjoyIt »

flaccidsteele wrote: Sun Nov 22, 2020 10:56 pm
chipperd wrote: Sun Nov 22, 2020 2:45 pm
flaccidsteele wrote: Sun Nov 22, 2020 1:40 pm
EnjoyIt wrote: Sun Nov 22, 2020 1:37 pm
flaccidsteele wrote: Sun Nov 22, 2020 9:42 am

+1 agree

It may not be a “quest to pad numbers”. After a certain point the wealth grows without supervision

The numbers pad themselves

At that point Life is just being lived
Today we are working for money we don’t need and just padding what we have. On good days the return of our portfolio can easily be 6+ months of expenses. On those days I sometimes wonder why I’m still putting in hours for someone else.
+1 that’s why I stopped working for a salary
If that's the case wouldn't every day be a day where you wonder why you are working for someone else?
Yes. That’s why I retired in my 40s

There was no point trading my Life for a salary when I didn’t even use the money that I made
We still receive a significant life benefit from our part time work, plus we get paid to do it. Interestingly enough, we can always find a way to spend a little extra cash. The key is spending more without getting into unsustainable lifestyle creep and finding that all of a sudden we no longer have 25x expenses and now need to work. For example, this year between contributions and growth our portfolio has grown and we are seeing ourselves splurge just a little bit on some luxuries. Interestingly the recent increase in spending was totally negated by the natural decrease in spending we had when the markets were down back in Feb-June.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
EnjoyIt
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Re: How much money do you want to retire?

Post by EnjoyIt »

kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Yes and no. I can tell you that plenty of people retire relatively well if they have no debt and decent social security payments. My parents for example can live very comfortably on just SS alone. Lucky for them they have much more than that and can splurge on some wants.

If we follow the 4% withdrawal, $2 million is $80k/yr. I can tell you that I could be pretty darn happy spending no money at all just going to the gym, riding a bike, putzing around the garden, watching TV, playing some video games, and reading. Out of the $80k I would probably have $40k left over (thanks to ACA subsidies.) But alas, I am even happier when we travel to visit friends and family, when we have guests over and can create a fun time for everyone. When we going skiing or scuba diving. So, we will be spending more than $40k a year. There is always a place to spend more money if you got it.

BTW, this is also why I am so comfortable with a 4% withdrawal. It would take little to no effort to cut that back to 3% or even 2% for a couple of years if needed.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
EnjoyIt
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Re: How much money do you want to retire?

Post by EnjoyIt »

texasdiver wrote: Mon Nov 23, 2020 12:14 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Retirement isn't just a question of account balances. It's also a question of timing. My wife and I are 7 years away from [hopefully] seeing our youngest child graduate from college. We have set that as our tentative retirement date. We don't want to pull the trigger too early while we still have dependents and children who are not launched. Based on our current retirement balance and contribution rate we are likely to wind up with a nest egg somewhere between $2.5 and $3.5 million in 7 years depending on what rate of return we get between then and now. Either number will meet our goal and will be more than adequate. If we get way ahead of the game we might dial back the working hours and such. But my wife is a physician and unlikely to walk away from the profession completely before that. She will be 57 in 7 years so that is already early retirement for the average physician. She might well decide to continue for another decade with part-time locum work just to keep her feet wet, not for the money, while we travel and relax the other 6 or so months out of the year.

I'm doing part time teaching which I actually enjoy. So I'm in no hurry to hang that up and will continue as long as my wife is working as well, just to have something to do and get out of the house.

Our actual plan is to test-drive our retirement in year 8 when we are free of children by cutting back the work hours and spending to the exact amount that our portfolio will provide. Or at least cutting our spending to that amount. So, for example, if our portfolio is $2.5 million then we will spend a year living on exactly 4% of that or $100,000 as a test drive of our retirement budget (before pulling the plug on careers). Because we will be [hopefully] moving from supporting kids to supporting just ourselves at the same time we plan to retire and we won't really have a good idea of how our spending is going to look until we have a year or two of empty nest lifestyle under our belts.
I want to comment regarding your test drive statement. Why wait 8 years? Aren't you test-driving it today. You are spending $x every year right now. Why not based on your example above try and spend $100k this year and the next. If there are some expense that will be going away in 8 years, then add that into the calculation. We have been doing this for years. For example, we know what our expenses are every year and we have kids that will eventually be on their own (they better be.) Our expenses are 4% our number plus the child related expenses. We have been "test driving" for a few years now. This test drive has included a lot of lumpy reality spending that you can only really see by doing the test drive for many years and not just 1 year prior to retirement.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
texasdiver
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Re: How much money do you want to retire?

Post by texasdiver »

EnjoyIt wrote: Tue Nov 24, 2020 1:47 am
texasdiver wrote: Mon Nov 23, 2020 12:14 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Retirement isn't just a question of account balances. It's also a question of timing. My wife and I are 7 years away from [hopefully] seeing our youngest child graduate from college. We have set that as our tentative retirement date. We don't want to pull the trigger too early while we still have dependents and children who are not launched. Based on our current retirement balance and contribution rate we are likely to wind up with a nest egg somewhere between $2.5 and $3.5 million in 7 years depending on what rate of return we get between then and now. Either number will meet our goal and will be more than adequate. If we get way ahead of the game we might dial back the working hours and such. But my wife is a physician and unlikely to walk away from the profession completely before that. She will be 57 in 7 years so that is already early retirement for the average physician. She might well decide to continue for another decade with part-time locum work just to keep her feet wet, not for the money, while we travel and relax the other 6 or so months out of the year.

I'm doing part time teaching which I actually enjoy. So I'm in no hurry to hang that up and will continue as long as my wife is working as well, just to have something to do and get out of the house.

Our actual plan is to test-drive our retirement in year 8 when we are free of children by cutting back the work hours and spending to the exact amount that our portfolio will provide. Or at least cutting our spending to that amount. So, for example, if our portfolio is $2.5 million then we will spend a year living on exactly 4% of that or $100,000 as a test drive of our retirement budget (before pulling the plug on careers). Because we will be [hopefully] moving from supporting kids to supporting just ourselves at the same time we plan to retire and we won't really have a good idea of how our spending is going to look until we have a year or two of empty nest lifestyle under our belts.
I want to comment regarding your test drive statement. Why wait 8 years? Aren't you test-driving it today. You are spending $x every year right now. Why not based on your example above try and spend $100k this year and the next. If there are some expense that will be going away in 8 years, then add that into the calculation. We have been doing this for years. For example, we know what our expenses are every year and we have kids that will eventually be on their own (they better be.) Our expenses are 4% our number plus the child related expenses. We have been "test driving" for a few years now. This test drive has included a lot of lumpy reality spending that you can only really see by doing the test drive for many years and not just 1 year prior to retirement.
We have 2 high school kids and a recently returned college kid in the house at the moment.

So cell phone plans, utilities, food bills, travel expenses, car expenses, clothing budgets, streaming plans, travel and vacation expenses (5 plane tickets, two hotel rooms) piano lessons, college costs, sorority bills, plane tickets home for Christmas and Thanksgiving, etc. etc. etc. are nearly endless. Not to mention we are basically paying college expenses out of cash flow. We did it for the kid who just graduated and it is what we will mostly do for the current HS senior and HS freshman.

It's really impossible for us to even imagine what our monthly costs are going to look like when we finally hit the empty nest stage. I expect there will be some lingering expenses like kids staying on the family cell phone plan, and continuing to drive vehicles we are paying insurance on and so forth, at least until they are properly launched.

I suppose there are more sophisticated budgeters who can manage to figure it out. But frankly we figure it will be good to live for a year as empty nesters before really understanding what our cash flow is going to look like with the kids out of the house. What are our grocery bills going to look like? Our car insurance? Will we dine out more or less? I'm not really even sure. I expect we will travel more. But the travel will be cheaper.

That's why when the last kid leaves the nest we plan to keep going a bit longer to get a better sense of what it is going to be like to live on our projected retirement income. It may well be the case that by the time we get there we will have enough of a surplus to not worry about it at all. But if we are right on the margin of what we think we are going to need then it will be good to test-drive that assumption for a while before completely pulling the plug.
EnjoyIt
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Re: How much money do you want to retire?

Post by EnjoyIt »

texasdiver wrote: Tue Nov 24, 2020 1:58 am
EnjoyIt wrote: Tue Nov 24, 2020 1:47 am
texasdiver wrote: Mon Nov 23, 2020 12:14 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Retirement isn't just a question of account balances. It's also a question of timing. My wife and I are 7 years away from [hopefully] seeing our youngest child graduate from college. We have set that as our tentative retirement date. We don't want to pull the trigger too early while we still have dependents and children who are not launched. Based on our current retirement balance and contribution rate we are likely to wind up with a nest egg somewhere between $2.5 and $3.5 million in 7 years depending on what rate of return we get between then and now. Either number will meet our goal and will be more than adequate. If we get way ahead of the game we might dial back the working hours and such. But my wife is a physician and unlikely to walk away from the profession completely before that. She will be 57 in 7 years so that is already early retirement for the average physician. She might well decide to continue for another decade with part-time locum work just to keep her feet wet, not for the money, while we travel and relax the other 6 or so months out of the year.

I'm doing part time teaching which I actually enjoy. So I'm in no hurry to hang that up and will continue as long as my wife is working as well, just to have something to do and get out of the house.

Our actual plan is to test-drive our retirement in year 8 when we are free of children by cutting back the work hours and spending to the exact amount that our portfolio will provide. Or at least cutting our spending to that amount. So, for example, if our portfolio is $2.5 million then we will spend a year living on exactly 4% of that or $100,000 as a test drive of our retirement budget (before pulling the plug on careers). Because we will be [hopefully] moving from supporting kids to supporting just ourselves at the same time we plan to retire and we won't really have a good idea of how our spending is going to look until we have a year or two of empty nest lifestyle under our belts.
I want to comment regarding your test drive statement. Why wait 8 years? Aren't you test-driving it today. You are spending $x every year right now. Why not based on your example above try and spend $100k this year and the next. If there are some expense that will be going away in 8 years, then add that into the calculation. We have been doing this for years. For example, we know what our expenses are every year and we have kids that will eventually be on their own (they better be.) Our expenses are 4% our number plus the child related expenses. We have been "test driving" for a few years now. This test drive has included a lot of lumpy reality spending that you can only really see by doing the test drive for many years and not just 1 year prior to retirement.
We have 2 high school kids and a recently returned college kid in the house at the moment.

So cell phone plans, utilities, food bills, travel expenses, car expenses, clothing budgets, streaming plans, travel and vacation expenses (5 plane tickets, two hotel rooms) piano lessons, college costs, sorority bills, plane tickets home for Christmas and Thanksgiving, etc. etc. etc. are nearly endless. Not to mention we are basically paying college expenses out of cash flow. We did it for the kid who just graduated and it is what we will mostly do for the current HS senior and HS freshman.

It's really impossible for us to even imagine what our monthly costs are going to look like when we finally hit the empty nest stage. I expect there will be some lingering expenses like kids staying on the family cell phone plan, and continuing to drive vehicles we are paying insurance on and so forth, at least until they are properly launched.

I suppose there are more sophisticated budgeters who can manage to figure it out. But frankly we figure it will be good to live for a year as empty nesters before really understanding what our cash flow is going to look like with the kids out of the house. What are our grocery bills going to look like? Our car insurance? Will we dine out more or less? I'm not really even sure. I expect we will travel more. But the travel will be cheaper.

That's why when the last kid leaves the nest we plan to keep going a bit longer to get a better sense of what it is going to be like to live on our projected retirement income. It may well be the case that by the time we get there we will have enough of a surplus to not worry about it at all. But if we are right on the margin of what we think we are going to need then it will be good to test-drive that assumption for a while before completely pulling the plug.
Its kind of funny, but you just named all the extra expenses you won't have to pay when empty nesters. To be honest, I simply estimated how much we pay for the kids based on current spending, put in a little fudge factor and go from there. But, I get it. With 3 kids it may look daunting. We use one of those spending trackers like Mint or Personal Capital so its pretty easy to tease out the big expenses and then fudge the smaller one's at the end of the year.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
texasdiver
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Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

Re: How much money do you want to retire?

Post by texasdiver »

EnjoyIt wrote: Tue Nov 24, 2020 2:10 am
texasdiver wrote: Tue Nov 24, 2020 1:58 am
EnjoyIt wrote: Tue Nov 24, 2020 1:47 am
texasdiver wrote: Mon Nov 23, 2020 12:14 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
Retirement isn't just a question of account balances. It's also a question of timing. My wife and I are 7 years away from [hopefully] seeing our youngest child graduate from college. We have set that as our tentative retirement date. We don't want to pull the trigger too early while we still have dependents and children who are not launched. Based on our current retirement balance and contribution rate we are likely to wind up with a nest egg somewhere between $2.5 and $3.5 million in 7 years depending on what rate of return we get between then and now. Either number will meet our goal and will be more than adequate. If we get way ahead of the game we might dial back the working hours and such. But my wife is a physician and unlikely to walk away from the profession completely before that. She will be 57 in 7 years so that is already early retirement for the average physician. She might well decide to continue for another decade with part-time locum work just to keep her feet wet, not for the money, while we travel and relax the other 6 or so months out of the year.

I'm doing part time teaching which I actually enjoy. So I'm in no hurry to hang that up and will continue as long as my wife is working as well, just to have something to do and get out of the house.

Our actual plan is to test-drive our retirement in year 8 when we are free of children by cutting back the work hours and spending to the exact amount that our portfolio will provide. Or at least cutting our spending to that amount. So, for example, if our portfolio is $2.5 million then we will spend a year living on exactly 4% of that or $100,000 as a test drive of our retirement budget (before pulling the plug on careers). Because we will be [hopefully] moving from supporting kids to supporting just ourselves at the same time we plan to retire and we won't really have a good idea of how our spending is going to look until we have a year or two of empty nest lifestyle under our belts.
I want to comment regarding your test drive statement. Why wait 8 years? Aren't you test-driving it today. You are spending $x every year right now. Why not based on your example above try and spend $100k this year and the next. If there are some expense that will be going away in 8 years, then add that into the calculation. We have been doing this for years. For example, we know what our expenses are every year and we have kids that will eventually be on their own (they better be.) Our expenses are 4% our number plus the child related expenses. We have been "test driving" for a few years now. This test drive has included a lot of lumpy reality spending that you can only really see by doing the test drive for many years and not just 1 year prior to retirement.
We have 2 high school kids and a recently returned college kid in the house at the moment.

So cell phone plans, utilities, food bills, travel expenses, car expenses, clothing budgets, streaming plans, travel and vacation expenses (5 plane tickets, two hotel rooms) piano lessons, college costs, sorority bills, plane tickets home for Christmas and Thanksgiving, etc. etc. etc. are nearly endless. Not to mention we are basically paying college expenses out of cash flow. We did it for the kid who just graduated and it is what we will mostly do for the current HS senior and HS freshman.

It's really impossible for us to even imagine what our monthly costs are going to look like when we finally hit the empty nest stage. I expect there will be some lingering expenses like kids staying on the family cell phone plan, and continuing to drive vehicles we are paying insurance on and so forth, at least until they are properly launched.

I suppose there are more sophisticated budgeters who can manage to figure it out. But frankly we figure it will be good to live for a year as empty nesters before really understanding what our cash flow is going to look like with the kids out of the house. What are our grocery bills going to look like? Our car insurance? Will we dine out more or less? I'm not really even sure. I expect we will travel more. But the travel will be cheaper.

That's why when the last kid leaves the nest we plan to keep going a bit longer to get a better sense of what it is going to be like to live on our projected retirement income. It may well be the case that by the time we get there we will have enough of a surplus to not worry about it at all. But if we are right on the margin of what we think we are going to need then it will be good to test-drive that assumption for a while before completely pulling the plug.
Its kind of funny, but you just named all the extra expenses you won't have to pay when empty nesters. To be honest, I simply estimated how much we pay for the kids based on current spending, put in a little fudge factor and go from there. But, I get it. With 3 kids it may look daunting. We use one of those spending trackers like Mint or Personal Capital so its pretty easy to tease out the big expenses and then fudge the smaller one's at the end of the year.
I'm honestly not worried about it at all. I'm pretty sure we will have more than enough to retire in comfort and will be able to adjust our lifestyle as necessary. We also aren't in a giant hurry to retire so this isn't a big preoccupation. But I do have a psychological barrier to retiring while we still have dependents. It's maybe just psychological. But you never really know what stupid stuff your kids are going to get into or what costs they might incur. I just feel better about dropping out of the workforce when we are finally down to just my wife and me. If we were desperate to leave the workforce, and looking at razors edge finances I'd be more fussy. But I don't expect going another year or two is going to be any big deal. Especially as both my wife and I can dial back our hours as much as we want pretty easily.
EnjoyIt
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Re: How much money do you want to retire?

Post by EnjoyIt »

texasdiver wrote: Tue Nov 24, 2020 2:22 am
EnjoyIt wrote: Tue Nov 24, 2020 2:10 am
texasdiver wrote: Tue Nov 24, 2020 1:58 am
EnjoyIt wrote: Tue Nov 24, 2020 1:47 am
texasdiver wrote: Mon Nov 23, 2020 12:14 am

Retirement isn't just a question of account balances. It's also a question of timing. My wife and I are 7 years away from [hopefully] seeing our youngest child graduate from college. We have set that as our tentative retirement date. We don't want to pull the trigger too early while we still have dependents and children who are not launched. Based on our current retirement balance and contribution rate we are likely to wind up with a nest egg somewhere between $2.5 and $3.5 million in 7 years depending on what rate of return we get between then and now. Either number will meet our goal and will be more than adequate. If we get way ahead of the game we might dial back the working hours and such. But my wife is a physician and unlikely to walk away from the profession completely before that. She will be 57 in 7 years so that is already early retirement for the average physician. She might well decide to continue for another decade with part-time locum work just to keep her feet wet, not for the money, while we travel and relax the other 6 or so months out of the year.

I'm doing part time teaching which I actually enjoy. So I'm in no hurry to hang that up and will continue as long as my wife is working as well, just to have something to do and get out of the house.

Our actual plan is to test-drive our retirement in year 8 when we are free of children by cutting back the work hours and spending to the exact amount that our portfolio will provide. Or at least cutting our spending to that amount. So, for example, if our portfolio is $2.5 million then we will spend a year living on exactly 4% of that or $100,000 as a test drive of our retirement budget (before pulling the plug on careers). Because we will be [hopefully] moving from supporting kids to supporting just ourselves at the same time we plan to retire and we won't really have a good idea of how our spending is going to look until we have a year or two of empty nest lifestyle under our belts.
I want to comment regarding your test drive statement. Why wait 8 years? Aren't you test-driving it today. You are spending $x every year right now. Why not based on your example above try and spend $100k this year and the next. If there are some expense that will be going away in 8 years, then add that into the calculation. We have been doing this for years. For example, we know what our expenses are every year and we have kids that will eventually be on their own (they better be.) Our expenses are 4% our number plus the child related expenses. We have been "test driving" for a few years now. This test drive has included a lot of lumpy reality spending that you can only really see by doing the test drive for many years and not just 1 year prior to retirement.
We have 2 high school kids and a recently returned college kid in the house at the moment.

So cell phone plans, utilities, food bills, travel expenses, car expenses, clothing budgets, streaming plans, travel and vacation expenses (5 plane tickets, two hotel rooms) piano lessons, college costs, sorority bills, plane tickets home for Christmas and Thanksgiving, etc. etc. etc. are nearly endless. Not to mention we are basically paying college expenses out of cash flow. We did it for the kid who just graduated and it is what we will mostly do for the current HS senior and HS freshman.

It's really impossible for us to even imagine what our monthly costs are going to look like when we finally hit the empty nest stage. I expect there will be some lingering expenses like kids staying on the family cell phone plan, and continuing to drive vehicles we are paying insurance on and so forth, at least until they are properly launched.

I suppose there are more sophisticated budgeters who can manage to figure it out. But frankly we figure it will be good to live for a year as empty nesters before really understanding what our cash flow is going to look like with the kids out of the house. What are our grocery bills going to look like? Our car insurance? Will we dine out more or less? I'm not really even sure. I expect we will travel more. But the travel will be cheaper.

That's why when the last kid leaves the nest we plan to keep going a bit longer to get a better sense of what it is going to be like to live on our projected retirement income. It may well be the case that by the time we get there we will have enough of a surplus to not worry about it at all. But if we are right on the margin of what we think we are going to need then it will be good to test-drive that assumption for a while before completely pulling the plug.
Its kind of funny, but you just named all the extra expenses you won't have to pay when empty nesters. To be honest, I simply estimated how much we pay for the kids based on current spending, put in a little fudge factor and go from there. But, I get it. With 3 kids it may look daunting. We use one of those spending trackers like Mint or Personal Capital so its pretty easy to tease out the big expenses and then fudge the smaller one's at the end of the year.
I'm honestly not worried about it at all. I'm pretty sure we will have more than enough to retire in comfort and will be able to adjust our lifestyle as necessary. We also aren't in a giant hurry to retire so this isn't a big preoccupation. But I do have a psychological barrier to retiring while we still have dependents. It's maybe just psychological. But you never really know what stupid stuff your kids are going to get into or what costs they might incur. I just feel better about dropping out of the workforce when we are finally down to just my wife and me. If we were desperate to leave the workforce, and looking at razors edge finances I'd be more fussy. But I don't expect going another year or two is going to be any big deal. Especially as both my wife and I can dial back our hours as much as we want pretty easily.
I have no way of stressing how amazing it is to dial back hours in a job you enjoy. You actually enjoy it more while having more time with family outside of work. As the saying goes "if you have the means, I highly recommend it." We did that even while having kids at home with college quite a few years away. One additional benefit of doing this is every year we work is another year we don't have to save to pay for open market health insurance and another year we don't have to save for child expenses. That is easily worth 10s of thousands a year. I think there is a almost 100% chance that we will retire before the kids are off our bankroll.

Either way, sounds like you have all your ducks in a row and won't have any issues. What was nice is running cfiresim with expected kids expenses expiring in certain years, healthcare expenses adjusting once hitting 65, and social security coming in at 70 paints a very interesting picture that is far better than expected. This holds true even if you are expecting future returns being worse than the past.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
Firemenot
Posts: 140
Joined: Wed Apr 01, 2020 8:48 pm

Re: How much money do you want to retire?

Post by Firemenot »

kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
You must live in a very low cost of living area, live a very simple life, and/or not have school age kids. BHers throw the 2%-4% SWR numbers around. At 4% (assuming the 2 million doesn’t include equity) that’s only 80K. There’s a lot of marginal utility for the incremental money beyond 80K for most people, especially if some of that 80K is required for housing.

Sorry, but I’d rather live a life of abundance in retirement. And I actually see work has having a lot of positives beyond the paycheck. I’m not trading my life for dollars as many seem to frame it.

At traditional retirement age with social security in the mix, I agree with your analysis. I don’t agree for people in their 40s like me.
visualguy
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Re: How much money do you want to retire?

Post by visualguy »

Firemenot wrote: Tue Nov 24, 2020 7:42 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
You must live in a very low cost of living area, live a very simple life, and/or not have school age kids. BHers throw the 2%-4% SWR numbers around. At 4% (assuming the 2 million doesn’t include equity) that’s only 80K. There’s a lot of marginal utility for the incremental money beyond 80K for most people, especially if some of that 80K is required for housing.

Sorry, but I’d rather live a life of abundance in retirement. And I actually see work has having a lot of positives beyond the paycheck. I’m not trading my life for dollars as many seem to frame it.

At traditional retirement age with social security in the mix, I agree with your analysis. I don’t agree for people in their 40s like me.
Agreed. For a healthy/non-smoker/non-overweight couple in their 40s, there's a high likelihood that at least one will live for another 45+ years. That's a very long time. 40s is a radically different situation than traditional retirement age.
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HomerJ
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Re: How much money do you want to retire?

Post by HomerJ »

Firemenot wrote: Tue Nov 24, 2020 7:42 am
kd2008 wrote: Sun Nov 22, 2020 8:03 am This is my observation from reading this thread: People reporting numbers north of 2 million will most likely never ever come close to spending it, their heirs will inherit many times that amount.

To each his own. Some people see it as a quest to pad numbers in their pile that simply cannot realistically provide any marginal utility.

While many may be underfunding retirement, a few may not be able to understand enough.

It brings to light that personal finance is so very behavioral.
You must live in a very low cost of living area, live a very simple life, and/or not have school age kids. BHers throw the 2%-4% SWR numbers around. At 4% (assuming the 2 million doesn’t include equity) that’s only 80K. There’s a lot of marginal utility for the incremental money beyond 80K for most people, especially if some of that 80K is required for housing.

Sorry, but I’d rather live a life of abundance in retirement. And I actually see work has having a lot of positives beyond the paycheck. I’m not trading my life for dollars as many seem to frame it.

At traditional retirement age with social security in the mix, I agree with your analysis. I don’t agree for people in their 40s like me.
What makes you think he was talking about people retiring in their 40s?
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.”
Financologist
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Re: How much money do you want to retire?

Post by Financologist »

chipperd wrote: Sun Nov 22, 2020 5:55 am
HomerJ wrote: Sun Nov 22, 2020 12:04 am
cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
I find myself asking the same question. I think philosophically, I just live in a different world, choosing a life style that puts living over working rather than working over living.
Many enjoy work as an essential aspect of good living. In other words.. work and life go hand in hand. For some it's not either or.

For me, work is not the enemy. Financial reliance on it is.
chipperd
Posts: 780
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Re: How much money do you want to retire?

Post by chipperd »

Financologist wrote: Wed Nov 25, 2020 1:58 am
chipperd wrote: Sun Nov 22, 2020 5:55 am
HomerJ wrote: Sun Nov 22, 2020 12:04 am
cb122 wrote: Sat Nov 21, 2020 4:27 pm Goal is to retire at 52 (18 years to go) and have savings in the $3-$4 million range without any debt. Family and kids along the way. This would be in addition to an annual $80k to $100k pension. The pension should cover living expenses for a majority of retirement. I have no desire to live in a HCOL area unless I'm near the mountains and able to walk out my door to hunt. Possibly deploy some of the accumulated savings into farmland (640 acres or so) that I can manage and hunt whenever I want. Life usually doesn't go as planned so I expect these numbers to have adjustments as I go.
What in the world are you spending now?

$80k-$100k pension plus $100k or so from 3% from $3-$4 million? Plus Social Security?

And you are NOT living in HCOL area?

Seriously, what are you people spending money on?
I find myself asking the same question. I think philosophically, I just live in a different world, choosing a life style that puts living over working rather than working over living.
Many enjoy work as an essential aspect of good living. In other words.. work and life go hand in hand. For some it's not either or.

For me, work is not the enemy. Financial reliance on it is.
Yup agreed.
My response you quoted is in response to those stating work was a means to solely a financial goal's end. If one wants to work for the satisfaction or joy it brings, then good on ya. Someone's got to fund social security!
"A portfolio is like a bar of soap, the more it's handled, the less there is." Dr. William Bernstein
soccerrules
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Re: How much money do you want to retire?

Post by soccerrules »

This was a tweet from Rick Ferri a few month back

Goals for Retirees based on 385 clients
< $2M - not run out of money
2-5M - live comfy, travel, tax efficiency
5-10M -live, comfy, travel, tax eff, legacy for heirs, charity, low tax
>10M - philanthropy, legacy for heirs and low tax

when asked about Spending for these groups

"Ironically I don't see much difference between the groups. Roughly $60K spending up to $2M and then maybe $100K to $10M. $150K beyond if you exclude gifting/charity. Rarely do I see spending over $250K"
Don't let your outflow exceed your income or your upkeep will be your downfall.
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Hawaiishrimp
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Re: How much money do you want to retire?

Post by Hawaiishrimp »

flaccidsteele wrote: Sun Nov 22, 2020 1:19 am I’m in my 40s with almost $6m

$12m pretty reasonable if I do absolutely nothing, and live to age 65

I’ll set a stretch goal of $30m (UHNW)

NB: UHNW definition likely to change by then, but whatever
I agree to this one.

I think I need $2.5M
I have $12.5M
I want: $30M+

With $30M+ in investable assets, I think I can finally afford the dream house I’ve always want. Even $12M is not enough for that.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.
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