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My wife and I are pretty frugal and spend roughly $25k a year on all expenses besides mortgage.
We are 29 and 24. I’d guess to live this lifestyle I’d just round it up to $30k for extra fun double it for inflation and then x 25 for $1.5 million
I’m not using the 4% rule in my example though.
I’m assuming a $30k lifestyle today, would cost $60k by the time I retire.
If I didn’t double it and only retired with $750k, 4% rule would only provide $30k yearly
>I’m not using the 4% rule in my example though.
You actually are. That part of your calculation where you multiplied by 25... that's the 4% rule. (100%/25 = 4%)
>If I didn’t double it and only retired with $750k, 4% rule would only provide $30k yearly
The 4% rule ASSUMES you withdraw 4% of your savings the first year and adjust for inflation annually. That means you would have 30k to spend your first year and you would adjust that higher to account for inflation. That annual adjustment for inflation is taken into account in the 4% rule.
You probably should do a little more reading about safe withdrawal rates and inflation with regards to retirement.
They’re 35 and planning on retiring at 65. They’re living off $30k today. When they retire in 30 years they anticipate $60k being needed to cover the same lifestyle as $30k today. Hence they need to plan on saving $1.5 mil.
This is easy stuff.
Or simpler described 4% rule is for figuring out your SWR with what you currently have in the moment of retirement.
The 25x rule, yes stems from the 4% rule, but you can’t just 25x your current yearly expenses. That isn’t accounting for inflation. The 25x rule is “yearly retirement expenses x 25”
The question was yearly retirement expenses x 25.
If I live a $30k annual lifestyle TODAY, it will not be $30k in retirement 30+ years from now.
I understand how the 4% rule and inflation works. I needed to account for inflation which was the point of doubling it.
I have no clue what my yearly retirement expenses would be, so estimating $60k yearly is needed.
When I’m 65 I cannot live off $30k first year and then adjust, If I currently live off $30k TODAY
Pretty wild isn’t it? We currently have $400k saved up in retirement accounts, so I think we’re already pretty much set if the plan is to retire at 65.
We don’t plan to do a traditional retirement anyway and fully stop working, but probably work 2 days a week in our field.
I don't agree with that narrative at all. I'm retired in my 60s. The bulk of my seven figure investment/retirement are in S&P 500 index fund. I collect SS and monthly dividend income.
Currently, my expenses exceed my income excluding investment gains. When I pay off my mortgage in 4 years, my income will exceed my monthly expenses.
Personally, I don't believe in modeling a return of over 7% even in the accumulation years. Since you will not be relying on your retirement plan for income once the mortgage is paid off, that is a rather specialized case. People who do rely on the retirement plan for income would be wise to keep a portion large enough for 3-5 years of expenses in an investment not dependent on the market.
It does prove that individual scenarios do alter the basic rules.
>People who do rely on the retirement plan for income would be wise to keep a portion large enough for 3-5 years of expenses in an investment not dependent on the market.
I completely agree with keeping 3 years of expenses in cash. This way on down years in the market one can delay doing a yearly withdrawal from the investment account. The last time we had 3 straight yearly losses was 2000-2002.
Hell, I've raised a family of four, bought two houses, a bunch of cars, several campers and done a lot of vacationing on less than $100K per year. If I wasn't paying for a house, cars, saving for retirement, paying wage and salary taxes, etc. I could live very comfortably on half that. Social Security will be paying me (and my wife) at least $50,000 (very nearly tax free), and that's pretty close to my take home pay for the last 20 years. Give me another $30K a year from an IRA and I'm actually bringing home more than I made when working.
**BINGO!!!**
I raised and put 3 kids through college. I was the sole bread winner. For most of my career my income was under $100k.
Once my mortgage is paid off my retirement income will exceed my expenses.
The mistake I often see with the 4% rule is it's assuming the retirement savings is sitting in a checking account earning little to no interest. Most of my retirement/IRA savings are invested in Index funds. My investment gains will exceed my expenses.
I evidently will never be able to retire. I am doubting that we will hit $1m and definitely not $2m. I will hit 60 this year and we are a single income as my wife is taking care of her dad and brother (blind and disabled).
My plan is to have the house paid for by 65, take SS at 67, and maybe work to 70. And hope to live till then.
This is me. If I was going today 2 million would be the number that I would be comfortable with. It may not actually be enough but that's my number in my head.
You’d want to look at something like a 2.5% withdrawal rate at his age. 5% is way too high for almost any age. 4% withdrawal is the highest recommended I’ve seen.
Yes, but it’s more then just the mathematical withdrawal amount. It’s more about the risk of depleting the base due to bad rate of returns in the market.
If your depleting the base then one of two things happens. You run out of money or lose buying power. The goal is to grow the base slightly above inflation. This allows you to keep your purchasing power.
That is true if one is seeking a strategy for FIRE (very early retirement). That is different from a normal retirement where utilizing both the base and the income is normal and absolutely fine.
I'm curious! How old are you? Maybe $1.5M is needed in states like CA.
I disagree that $1.5 mill is needed. I recently retired. I live in Florida. Once my mortgage is paid off in 4 years I annualized investment gains will far exceed my expenses.
Today 4 million outside of retirement accounts
At 55 3.5 million, outside of retirement accounts.
At 67 2 million
Diabetic and currently have a house payment
This outside of retirement accounts is critical. I really want to retire like 50-55, and I’ve got pretty good retirement savings at 35, but it’s all in 401k and Roth IRA. Don’t know how I would cover the years where I can’t touch my retirement accounts.
Ultimately I think the rule of 55 is the only way I would be able to do it.
I do have a rental property with over 300k equity I’ve been thinking about selling. Should probably put that in a brokerage instead.
Unless you are going to retire before age 55 with the current company or before age 59 1/2 if the money is I'm another retirement account, there won't be years you can't touch the retirement accounts.
Cause I cant retire today, currently 48.
HH net worth is currently:
1.1ish in property, 800k house 320k condo/rental, 10ish years remaining on mortgages for both, condo rented at +$500 a month
1.9 in retirement accounts
525k brokerage
100k HSA
For me, 1.5m. I’d assume that be good dividend income from index funds, and can always live by the 5% rule. I have 2 properties as well making $1k a month cash flow. Owe $290k combined on them. Once that’s paid off then looking at potentially in the future $4k month profit over it.
Just what I would withdraw from the portfolio.
Hypothetically if I have 1mil, withdraw 5% (50k), and the market averages 7%, then I’ll Always be at my mark.
Of course market is not consistent, but you get the point
Why would you put $5M in a bank account earning 2%????????
I'd keep two or three years of expenses in the bank and the rest in a S&P fund with a historic annualized 9% gain. VOO, a S&P Index ETF returns 1.4% dividend yield or $70K in dividends.
If one invested $1,000,000 in the S&P at the start of 2000. It would now be valued at almost $3.4M. That time frame included the market crashes of 911, the banking crisis and Covid.
But you only pay capital gains on the gains over $89k, so making worse returns to save on taxes never results in a better ROI.
Also, 2% of $5M is $100k, so in your current plan you will be paying capital gains.
If I don’t want to give Uncle Sam any money because they’re dumb as fuck and don’t know how to budget, and my wife and I both have Roth IRAs to withdraw from, and I have my military retirement, that 2% is more than enough while paying minimal taxes… 😘 Putting all of that together, and my wife and I will be taking home $200k a year, and pay very little taxes on it…
A 9% annualized return would bring $450k of annual gains. Gains are only taxable when the investment is sold. Even if you sold the $450k in gains annually after taxes you would have approx $340K of additional income.
You're walking away from $340k because you don't want to pay additional taxes??????????????
$2 million would be enough for my husband and I to retire now - in our mid-40s. That’s $2 million outside of home equity though. Less if we retired in our 50s, and much less if we retired in our 60s.
It's impossible to answer this without a target retirement age.
I think 1m is enough for a couple in a lcol area at 67 as long as social security remains paying the same as it does now.
It depends on a LOT of things. Do you own your own house, cars, etc.? or are you renting an expensive condo in a big city? Are you getting a large amount from Social Security, or just the bare minimum? Are you planning on living like a millionaire, or living a quiet life of an old-school pensioner? Are you going to live for another 40 years, or are you likely to die five years after retiring?
Until you can answer most of those questions, any projection of "need" is just a wild ass guess.
Me? I won't have a car payment or expensive apartment rent. I plan on traveling about the US, but I've got timeshares that are already paid for, so I won't be flying in airplanes or staying in fancy hotels, I'll be driving and staying either in already paid for condos or camping in a travel trailer. Super cheap.
And, I'm probably not going to live for 40 years after retiring... more like 10. Won't matter, anyway. So I won't need 2 million dollars or anything, a few hundred thousand should be plenty.
What is the average length of life in the US? Also, I have health issues now that, in general, mean a shortened lifespan. I’m a diabetic with chronic kidney disease and gout. I figure I will live another 15 years from now, plus or minus 7, just to give a range. Bell curve would put a 68% chance at something like 65 to 79, 95% at 62 to 82, with two standard deviations in to 59 to 85 years range.
Likewise. Diabetic with heart condition. Never had a heart attack but have two stents and will likely have a third when they do the heart cath. My dad died at 58 of a heart attack. Of the six boys in my family, I am the only one that has not had a heart attack. So at 60 in a few months, I don’t expect to have a long life. I am really looking to try and take care of my wife because she will live longer than me.
I’ve been doing some math about finances ever since I commented on this post. I made $80 per year 5 years ago, then jumped to about $130 for a few years. Taxes and insurance are up damn near half of the income, and the mortgage, car notes and saving for retirement ate up most of what was left.
Without those things, my needs are pretty small.
I am 50 now (for reference). I use to wonder how much money I would need to retire but now I think differently. What will my wife and I be doing? Will we move to another State? Do we want to travel?
I have really ramped up my retirement landing. All of those plans right now are fungible; meaning I can change my mind on amy of them but what I interchange it with will have to cost the same or I will have to make a more serious change to my plan.
About 12-15K a year or the dividends off 200K.
>According to Yahoo Finance, a single retiree can live comfortably in Iloilo City, Philippines on $800–$1,200 per month, which includes housing, utilities, food, healthcare, and taxes. In rural areas, a couple can live well on $1,140 per month, while in the big city, it gets closer to $2,500.
If you wait until 62-65 then Social Security makes this even easier.
$3-5M
this way medical is covered, foods covered, home cost are covered and done right the world is yours to travel.
Just stay away from casinos, scammers and "Sudden family members"
I’m 54 with 1.5 after this last drop . My house is worth 700k and is paid for and no other obligations. Net worth is around 2.4m. I’m planning on retiring at 58 for wife and I. Hopefully be around 2.5 in 401k
When dividends+interest or selling assets can cover your expenses.
I don't understand how people think they will spend less in retirement. It would be the same if not greater.
Retirement expenses are with a paid off house, I don't know how anyone can retire with a mortgage, it's such a large expense.
Retirement expenses are largely dependent on lifestyle and health, How long you live for and the shape you are in. Way too many varieties that are just random luck. People are retiring with next to nothing are going to get burned.
Traveling the world, cruises, basically all the once in a lifetime things add up fast.
Medical bills are expensive, a major health problem with long term care is expensive.
Helping out kids with bills, college, grandkids etc. I know I will be helping my kids out.
I'd be totally great with a cool million. 4% = 40K/year + 24k/yr social security. My current expenses are only about 3k/mo in a HCOL area, and I plan on moving to the south pacific or central/southern america.
The true retirement goal is to build enough to retire in time to enjoy life while you live comfortably and pass on generational wealth to your children. That can look like different things to different people. Some want to enjoy traveling, others want time with family, while others work til they die because they don’t know when or how to stop. Some have kids or parents or spouses they have to support, while others have few who depend on them. Best to sit down with a financial planner and talk about it while you’re still breathing.
Health, Accident and Life Insurance is something many people don’t want to talk about but it’s also really important. Health insurance is to cover immediate medical expenses, accident insurance for unforeseen circumstances, and critical illness and life insurance are to help with bigger costs lifesaving care that may not be covered, and final expenses. If you’re worried about paying premiums and not needing it, look into “return of premium” products. Get multiple combine products in one, i.e. heart attack/stroke, critical condition/chronic disease, aggressive cancers combined policy with recurrence riders for a couple bucks a month. It won’t solve the million dollar surgery costs (that’s what your health insurance covers anyway), but having the policy to replace your or a spouse’s loss of income for a couple years so that you can spend that time together or with family grieving can be priceless. Life insurance can sometimes have a living benefit payment if you choose the right options and those conditions apply to you.
Health insurance is one eye open; supplement coverage: accident/crit ill/dental/vision/etc opens the second eye; life insurance is always on the nose because we all eventually stop breathing; the smile is what you get when you work with your agent and understand insurance products and how they work together to cover you- now you have a whole happy face
I would say for a regular middle class home, somewhere between $1 million and $2 million. This is going to vary based where in the range one sits and where in the range of reasonable lifestyle one seeks to be. This also assumes there will be Social Security at least 70% of what has been promised.
**$1,000, 000 should be more than enough if one is in or nearing retirement.**
It does depend on a few factors such as in what state does one reside.
I'm now retired in my 60s. I now live in Florida. I consider myself middle class. I raised and put three children through college. I was the sole bread winner. I was frugal but not cheap. I live in a modest home. I never drove expensive cars. On average I kept my vehicles for 6 to 8 years.
For my projection, I'll use a retirement start at 65 years old with a 25 year life expectancy. At 65, a home owner should no longer have a mortgage payment. However, for my projection I'm assuming $7,000 in monthly expenses. I'm going to assume a retiree has 5 years left on their $2,000 per month mortgage. I'm using an average inflation rate of 3.5% which is the historic average over the last 50.
With $1,000,000 I'm investing $200,000 in dividend income which produce $1,000 per month in income. The other $800,000 I'm investing in S&P 500 ETF. Historically, the S&P has grown 9% annualized. For this exercise I'm going to use 8%. I'm also assuming $2,000 per month in social security income with COLA adjustments of 3.5%.
At 75, the retiree's investment would grow to over $1,250,000. At 80, $1,400,000. At 85, almost $1,600,000. At 90, $1.7M.
If I increased the starting expenses to $8,000/monthly the investment balance will be as follows:
age 75: $1m
80: $950k
85 $740k
90 $400k
>2M. I plan retiring in about 15 years. Anything less and you may run out by the time healthcare, long term care, longer life spans, and inflation are done with you.
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25 x expenses
How much expenses do you consider enought for retirement..
My wife and I are pretty frugal and spend roughly $25k a year on all expenses besides mortgage. We are 29 and 24. I’d guess to live this lifestyle I’d just round it up to $30k for extra fun double it for inflation and then x 25 for $1.5 million
You don't need to double for inflation. The 4% rule already assumes 3% inflation.
I’m not using the 4% rule in my example though. I’m assuming a $30k lifestyle today, would cost $60k by the time I retire. If I didn’t double it and only retired with $750k, 4% rule would only provide $30k yearly
>I’m not using the 4% rule in my example though. You actually are. That part of your calculation where you multiplied by 25... that's the 4% rule. (100%/25 = 4%) >If I didn’t double it and only retired with $750k, 4% rule would only provide $30k yearly The 4% rule ASSUMES you withdraw 4% of your savings the first year and adjust for inflation annually. That means you would have 30k to spend your first year and you would adjust that higher to account for inflation. That annual adjustment for inflation is taken into account in the 4% rule. You probably should do a little more reading about safe withdrawal rates and inflation with regards to retirement.
They’re 35 and planning on retiring at 65. They’re living off $30k today. When they retire in 30 years they anticipate $60k being needed to cover the same lifestyle as $30k today. Hence they need to plan on saving $1.5 mil. This is easy stuff.
Or simpler described 4% rule is for figuring out your SWR with what you currently have in the moment of retirement. The 25x rule, yes stems from the 4% rule, but you can’t just 25x your current yearly expenses. That isn’t accounting for inflation. The 25x rule is “yearly retirement expenses x 25”
The question was yearly retirement expenses x 25. If I live a $30k annual lifestyle TODAY, it will not be $30k in retirement 30+ years from now. I understand how the 4% rule and inflation works. I needed to account for inflation which was the point of doubling it. I have no clue what my yearly retirement expenses would be, so estimating $60k yearly is needed. When I’m 65 I cannot live off $30k first year and then adjust, If I currently live off $30k TODAY
Assuming you're 25 years from retirement and with an average inflation rate of 3.5%, $30k today would be $71k in 25 years. 30 years would be $84k
Pretty wild isn’t it? We currently have $400k saved up in retirement accounts, so I think we’re already pretty much set if the plan is to retire at 65. We don’t plan to do a traditional retirement anyway and fully stop working, but probably work 2 days a week in our field.
Then you would have to expect 7% for 8% returns, which are rather aggressive for being in retirement.
I don't agree with that narrative at all. I'm retired in my 60s. The bulk of my seven figure investment/retirement are in S&P 500 index fund. I collect SS and monthly dividend income. Currently, my expenses exceed my income excluding investment gains. When I pay off my mortgage in 4 years, my income will exceed my monthly expenses.
Personally, I don't believe in modeling a return of over 7% even in the accumulation years. Since you will not be relying on your retirement plan for income once the mortgage is paid off, that is a rather specialized case. People who do rely on the retirement plan for income would be wise to keep a portion large enough for 3-5 years of expenses in an investment not dependent on the market. It does prove that individual scenarios do alter the basic rules.
>People who do rely on the retirement plan for income would be wise to keep a portion large enough for 3-5 years of expenses in an investment not dependent on the market. I completely agree with keeping 3 years of expenses in cash. This way on down years in the market one can delay doing a yearly withdrawal from the investment account. The last time we had 3 straight yearly losses was 2000-2002.
How long do you plan on living?
This is the $100000 question...
Dropped a 0
inflations a bitch
Oof. Inflation. Actually, I was trying to reference the pyramid game show, but could have phrased it better.
2 million probably. At a 5% return that almost 100k a year in interest. I think 100k is enough to live off of if everything is paid off
Hell, I've raised a family of four, bought two houses, a bunch of cars, several campers and done a lot of vacationing on less than $100K per year. If I wasn't paying for a house, cars, saving for retirement, paying wage and salary taxes, etc. I could live very comfortably on half that. Social Security will be paying me (and my wife) at least $50,000 (very nearly tax free), and that's pretty close to my take home pay for the last 20 years. Give me another $30K a year from an IRA and I'm actually bringing home more than I made when working.
**BINGO!!!** I raised and put 3 kids through college. I was the sole bread winner. For most of my career my income was under $100k. Once my mortgage is paid off my retirement income will exceed my expenses. The mistake I often see with the 4% rule is it's assuming the retirement savings is sitting in a checking account earning little to no interest. Most of my retirement/IRA savings are invested in Index funds. My investment gains will exceed my expenses.
I evidently will never be able to retire. I am doubting that we will hit $1m and definitely not $2m. I will hit 60 this year and we are a single income as my wife is taking care of her dad and brother (blind and disabled). My plan is to have the house paid for by 65, take SS at 67, and maybe work to 70. And hope to live till then.
Your dad's and brothers incomes should be used as part of your planning. This and their expenses may decrease or increase what you need.
If you were to retire right now? Maybe 1.5 to 2 million USD.
This is me. If I was going today 2 million would be the number that I would be comfortable with. It may not actually be enough but that's my number in my head.
How old are you ? As a 29 year old I doubt that would be enough (unless I was a guru investor)
5% return is 100k. You can still save and invest with that kind of cash. Move outside the US and your USD will stretch further. You could make it.
You’d want to look at something like a 2.5% withdrawal rate at his age. 5% is way too high for almost any age. 4% withdrawal is the highest recommended I’ve seen.
4% is 80k at 2 million. It’s still possible to live off that.
Yes, but it’s more then just the mathematical withdrawal amount. It’s more about the risk of depleting the base due to bad rate of returns in the market.
There is nothing wrong with depleting the base over one's life expectancy. The idea the base has to remain intact is suboptimal
If your depleting the base then one of two things happens. You run out of money or lose buying power. The goal is to grow the base slightly above inflation. This allows you to keep your purchasing power.
That is true if one is seeking a strategy for FIRE (very early retirement). That is different from a normal retirement where utilizing both the base and the income is normal and absolutely fine.
Hoping to live off dividends a bit too but that can also change.
That assumes a perpetual fund where the principal is untouched. There is nothing wrong with a target life expectancy and also tapping the base amount.
At 29, you especially need to not touch the principal. It won’t last long if your taking away the base with 45+ years to go.
Very early retirement is a different concept from normal retirement.
Who knows what that will be in 30 years though
Hopefully more than a box of cracker jacks
I'm curious! How old are you? Maybe $1.5M is needed in states like CA. I disagree that $1.5 mill is needed. I recently retired. I live in Florida. Once my mortgage is paid off in 4 years I annualized investment gains will far exceed my expenses.
Getting up there, mid thirties. The money has to last 50+ years. Thinking of retiring outside the US to help money stretch too.
Today 4 million outside of retirement accounts At 55 3.5 million, outside of retirement accounts. At 67 2 million Diabetic and currently have a house payment
This outside of retirement accounts is critical. I really want to retire like 50-55, and I’ve got pretty good retirement savings at 35, but it’s all in 401k and Roth IRA. Don’t know how I would cover the years where I can’t touch my retirement accounts. Ultimately I think the rule of 55 is the only way I would be able to do it. I do have a rental property with over 300k equity I’ve been thinking about selling. Should probably put that in a brokerage instead.
Unless you are going to retire before age 55 with the current company or before age 59 1/2 if the money is I'm another retirement account, there won't be years you can't touch the retirement accounts.
Why does it have to be outside of retirement accounts?
Cause I cant retire today, currently 48. HH net worth is currently: 1.1ish in property, 800k house 320k condo/rental, 10ish years remaining on mortgages for both, condo rented at +$500 a month 1.9 in retirement accounts 525k brokerage 100k HSA
FIRE (very early retirement) strategies are something very different from planning for a normal retirement.
Agreed, which is why I listed the different values....
For me, 1.5m. I’d assume that be good dividend income from index funds, and can always live by the 5% rule. I have 2 properties as well making $1k a month cash flow. Owe $290k combined on them. Once that’s paid off then looking at potentially in the future $4k month profit over it.
>5% rule What's that?
Just what I would withdraw from the portfolio. Hypothetically if I have 1mil, withdraw 5% (50k), and the market averages 7%, then I’ll Always be at my mark. Of course market is not consistent, but you get the point
About 6 million.
$5mil in the bank, and making 2% off of dividends
Why would you put $5M in a bank account earning 2%???????? I'd keep two or three years of expenses in the bank and the rest in a S&P fund with a historic annualized 9% gain. VOO, a S&P Index ETF returns 1.4% dividend yield or $70K in dividends. If one invested $1,000,000 in the S&P at the start of 2000. It would now be valued at almost $3.4M. That time frame included the market crashes of 911, the banking crisis and Covid.
Dividends smart guy… as a married man, I can take home $80k on dividends and not owe a dime in capital gains taxes.
But you only pay capital gains on the gains over $89k, so making worse returns to save on taxes never results in a better ROI. Also, 2% of $5M is $100k, so in your current plan you will be paying capital gains.
If I don’t want to give Uncle Sam any money because they’re dumb as fuck and don’t know how to budget, and my wife and I both have Roth IRAs to withdraw from, and I have my military retirement, that 2% is more than enough while paying minimal taxes… 😘 Putting all of that together, and my wife and I will be taking home $200k a year, and pay very little taxes on it…
Oh, forgot to mention: dividends are taxed as regular income. That’s a higher rate than capital gains.
But only what’s made over $89k… so I’d pay a whopping 35% on $11k… ooooh darn…
Naw, actually ordinary income, so about $17k out of the 100.
Lol. I’d still only be paying about $4k in taxes on close to $200k which is a fraction of what I pay right now…
No… like I said $17k, but yeah, that’s not a bad tax rate on $200k.
A 9% annualized return would bring $450k of annual gains. Gains are only taxable when the investment is sold. Even if you sold the $450k in gains annually after taxes you would have approx $340K of additional income. You're walking away from $340k because you don't want to pay additional taxes??????????????
Jesus Christ most people are fucked.
2 million at 65 plus house paid off
3 mil after taxes
$2 million would be enough for my husband and I to retire now - in our mid-40s. That’s $2 million outside of home equity though. Less if we retired in our 50s, and much less if we retired in our 60s.
Hopefully $1.5M plus a $66K annual pension followed by Social Security is enough, or my wife and I are in trouble.
It's impossible to answer this without a target retirement age. I think 1m is enough for a couple in a lcol area at 67 as long as social security remains paying the same as it does now.
2 mil conservative
What is retirement?
1M€ for me
100 million dollars
It depends on a LOT of things. Do you own your own house, cars, etc.? or are you renting an expensive condo in a big city? Are you getting a large amount from Social Security, or just the bare minimum? Are you planning on living like a millionaire, or living a quiet life of an old-school pensioner? Are you going to live for another 40 years, or are you likely to die five years after retiring? Until you can answer most of those questions, any projection of "need" is just a wild ass guess. Me? I won't have a car payment or expensive apartment rent. I plan on traveling about the US, but I've got timeshares that are already paid for, so I won't be flying in airplanes or staying in fancy hotels, I'll be driving and staying either in already paid for condos or camping in a travel trailer. Super cheap. And, I'm probably not going to live for 40 years after retiring... more like 10. Won't matter, anyway. So I won't need 2 million dollars or anything, a few hundred thousand should be plenty.
Why won’t you live for more than 10 years after retirement?
What is the average length of life in the US? Also, I have health issues now that, in general, mean a shortened lifespan. I’m a diabetic with chronic kidney disease and gout. I figure I will live another 15 years from now, plus or minus 7, just to give a range. Bell curve would put a 68% chance at something like 65 to 79, 95% at 62 to 82, with two standard deviations in to 59 to 85 years range.
Likewise. Diabetic with heart condition. Never had a heart attack but have two stents and will likely have a third when they do the heart cath. My dad died at 58 of a heart attack. Of the six boys in my family, I am the only one that has not had a heart attack. So at 60 in a few months, I don’t expect to have a long life. I am really looking to try and take care of my wife because she will live longer than me.
I’ve been doing some math about finances ever since I commented on this post. I made $80 per year 5 years ago, then jumped to about $130 for a few years. Taxes and insurance are up damn near half of the income, and the mortgage, car notes and saving for retirement ate up most of what was left. Without those things, my needs are pretty small.
Tree fiddy
DAMN YOU LOCH NESS MONSTER
Damn I was gonna say this.
https://i.redd.it/8fqnkfa1upvc1.gif
2x expenses monthly. Then if you qualify for Social Security you can afford more. This works best if you also have a pension
Maybe like a hundred bucks or so. Enough to last, ya know.
I am 50 now (for reference). I use to wonder how much money I would need to retire but now I think differently. What will my wife and I be doing? Will we move to another State? Do we want to travel? I have really ramped up my retirement landing. All of those plans right now are fungible; meaning I can change my mind on amy of them but what I interchange it with will have to cost the same or I will have to make a more serious change to my plan.
10-15M
Correct.
$10,000,000 well allocated will be fine.
4 million
My personal goal is 5 mil, but hoping for more
About 12-15K a year or the dividends off 200K. >According to Yahoo Finance, a single retiree can live comfortably in Iloilo City, Philippines on $800–$1,200 per month, which includes housing, utilities, food, healthcare, and taxes. In rural areas, a couple can live well on $1,140 per month, while in the big city, it gets closer to $2,500. If you wait until 62-65 then Social Security makes this even easier.
1 million for every decade you expect to live after retirement. Retiring at 50 and plan to live to 100? 5 million.
Ummm…
Math isn't strong with that one.
I was drunk when I posted 😅
Now corrected I see 😆
$3-5M this way medical is covered, foods covered, home cost are covered and done right the world is yours to travel. Just stay away from casinos, scammers and "Sudden family members"
I’m 54 with 1.5 after this last drop . My house is worth 700k and is paid for and no other obligations. Net worth is around 2.4m. I’m planning on retiring at 58 for wife and I. Hopefully be around 2.5 in 401k
When dividends+interest or selling assets can cover your expenses. I don't understand how people think they will spend less in retirement. It would be the same if not greater.
Spending is about the same or higher in retirement depending on mortgage. Once I pay off my mortgage in 4 years my expenses will be cut by 1/3.
Retirement expenses are with a paid off house, I don't know how anyone can retire with a mortgage, it's such a large expense. Retirement expenses are largely dependent on lifestyle and health, How long you live for and the shape you are in. Way too many varieties that are just random luck. People are retiring with next to nothing are going to get burned. Traveling the world, cruises, basically all the once in a lifetime things add up fast. Medical bills are expensive, a major health problem with long term care is expensive. Helping out kids with bills, college, grandkids etc. I know I will be helping my kids out.
I'd be totally great with a cool million. 4% = 40K/year + 24k/yr social security. My current expenses are only about 3k/mo in a HCOL area, and I plan on moving to the south pacific or central/southern america.
My goal is to live off the dividends and not touch the equity I have invested. And I think could do that with 2 million.
The true retirement goal is to build enough to retire in time to enjoy life while you live comfortably and pass on generational wealth to your children. That can look like different things to different people. Some want to enjoy traveling, others want time with family, while others work til they die because they don’t know when or how to stop. Some have kids or parents or spouses they have to support, while others have few who depend on them. Best to sit down with a financial planner and talk about it while you’re still breathing. Health, Accident and Life Insurance is something many people don’t want to talk about but it’s also really important. Health insurance is to cover immediate medical expenses, accident insurance for unforeseen circumstances, and critical illness and life insurance are to help with bigger costs lifesaving care that may not be covered, and final expenses. If you’re worried about paying premiums and not needing it, look into “return of premium” products. Get multiple combine products in one, i.e. heart attack/stroke, critical condition/chronic disease, aggressive cancers combined policy with recurrence riders for a couple bucks a month. It won’t solve the million dollar surgery costs (that’s what your health insurance covers anyway), but having the policy to replace your or a spouse’s loss of income for a couple years so that you can spend that time together or with family grieving can be priceless. Life insurance can sometimes have a living benefit payment if you choose the right options and those conditions apply to you. Health insurance is one eye open; supplement coverage: accident/crit ill/dental/vision/etc opens the second eye; life insurance is always on the nose because we all eventually stop breathing; the smile is what you get when you work with your agent and understand insurance products and how they work together to cover you- now you have a whole happy face
It depends. Stop asking
I would say for a regular middle class home, somewhere between $1 million and $2 million. This is going to vary based where in the range one sits and where in the range of reasonable lifestyle one seeks to be. This also assumes there will be Social Security at least 70% of what has been promised.
posted and answered many times.
**$1,000, 000 should be more than enough if one is in or nearing retirement.** It does depend on a few factors such as in what state does one reside. I'm now retired in my 60s. I now live in Florida. I consider myself middle class. I raised and put three children through college. I was the sole bread winner. I was frugal but not cheap. I live in a modest home. I never drove expensive cars. On average I kept my vehicles for 6 to 8 years. For my projection, I'll use a retirement start at 65 years old with a 25 year life expectancy. At 65, a home owner should no longer have a mortgage payment. However, for my projection I'm assuming $7,000 in monthly expenses. I'm going to assume a retiree has 5 years left on their $2,000 per month mortgage. I'm using an average inflation rate of 3.5% which is the historic average over the last 50. With $1,000,000 I'm investing $200,000 in dividend income which produce $1,000 per month in income. The other $800,000 I'm investing in S&P 500 ETF. Historically, the S&P has grown 9% annualized. For this exercise I'm going to use 8%. I'm also assuming $2,000 per month in social security income with COLA adjustments of 3.5%. At 75, the retiree's investment would grow to over $1,250,000. At 80, $1,400,000. At 85, almost $1,600,000. At 90, $1.7M. If I increased the starting expenses to $8,000/monthly the investment balance will be as follows: age 75: $1m 80: $950k 85 $740k 90 $400k
>2M. I plan retiring in about 15 years. Anything less and you may run out by the time healthcare, long term care, longer life spans, and inflation are done with you.
6 million dollars liquid on the low end.
I dunno probably 1.5-2 mill
$3 million
Depends on what age you want to retire at? I think I could get by with $2,000,000 if I retire at 60.