Author Topic: How Much Is Enough To Retire?  (Read 3540 times)

nihilism122

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How Much Is Enough To Retire?
« on: May 07, 2018, 12:31:50 PM »
How much do you feel you need in your portfolio to retire?  500k?  750k?  $1 million?  More? 

Gone Fishing

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Re: How Much Is Enough To Retire?
« Reply #1 on: May 07, 2018, 12:36:19 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

RWD

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Re: How Much Is Enough To Retire?
« Reply #2 on: May 07, 2018, 12:42:10 PM »
You can retire on $0 if you can live off social security.

nihilism122

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Re: How Much Is Enough To Retire?
« Reply #3 on: May 07, 2018, 01:46:07 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young. 

thd7t

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Re: How Much Is Enough To Retire?
« Reply #4 on: May 07, 2018, 02:08:48 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.
Maybe incrementally safer, but not enough to make a difference for a lot of people here.

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Re: How Much Is Enough To Retire?
« Reply #5 on: May 07, 2018, 02:29:47 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.
Apparently you already know the answer so why bother asking?

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rxmurphy

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Re: How Much Is Enough To Retire?
« Reply #6 on: May 07, 2018, 03:13:31 PM »
It also helps to know when you are going to die.

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Re: How Much Is Enough To Retire?
« Reply #7 on: May 07, 2018, 03:18:33 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.
Apparently you already know the answer so why bother asking?

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maybe he was asking, like a poll.  How much do you need to retire?  Then people would chime in and say 1.5 million or whatever.  That's the only thing I can think of. 

DreamFIRE

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Re: How Much Is Enough To Retire?
« Reply #8 on: May 07, 2018, 05:07:48 PM »
How much do you feel you need in your portfolio to retire?  500k?  750k?  $1 million?  More?
We need more information to go on.

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Re: How Much Is Enough To Retire?
« Reply #9 on: May 07, 2018, 05:20:31 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.
Apparently you already know the answer so why bother asking?

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maybe he was asking, like a poll.  How much do you need to retire?  Then people would chime in and say 1.5 million or whatever.  That's the only thing I can think of.

If only there was a way to post a poll.....
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nereo

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Re: How Much Is Enough To Retire?
« Reply #10 on: May 07, 2018, 05:22:54 PM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.
Apparently you already know the answer so why bother asking?

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maybe he was asking, like a poll.  How much do you need to retire?  Then people would chime in and say 1.5 million or whatever.  That's the only thing I can think of.

If only there was a way to post a poll.....
...or a multi-year, multi-dozen-page thread outlining the pros and cons of various withdraw rates.
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the_fixer

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Re: How Much Is Enough To Retire?
« Reply #11 on: May 07, 2018, 05:43:11 PM »
Or 50 other threads with the same info....

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MrThatsDifferent

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Re: How Much Is Enough To Retire?
« Reply #12 on: May 08, 2018, 04:30:52 AM »
Or if only MMM had written several posts to address...

Finallyunderstand

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Re: How Much Is Enough To Retire?
« Reply #13 on: May 08, 2018, 04:34:18 AM »
sooo, you're tellin me there's a chance? 

Car Jack

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Re: How Much Is Enough To Retire?
« Reply #14 on: May 08, 2018, 09:26:12 AM »
50X normal expenses for me.  I say normal expenses because I'm in the middle of paying tuition for my 2 sons.  Just wrote the checks for $9k today to cover a month of one kid and a summer course for the other so he'll have the pre-req's for Finite Analysis in the fall.  August is when the big bill comes.  Once son #1 graduates college in a year, I'll give myself the go ahead to give it up, although I haven't made any firm commitments yet.  I'm a car guy and working another 6 months to buy a Nissan GT-R could be ok.

nereo

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Re: How Much Is Enough To Retire?
« Reply #15 on: May 08, 2018, 09:46:51 AM »
50X normal expenses for me.  I say normal expenses because I'm in the middle of paying tuition for my 2 sons.  Just wrote the checks for $9k today to cover a month of one kid and a summer course for the other so he'll have the pre-req's for Finite Analysis in the fall.  August is when the big bill comes.  Once son #1 graduates college in a year, I'll give myself the go ahead to give it up, although I haven't made any firm commitments yet.  I'm a car guy and working another 6 months to buy a Nissan GT-R could be ok.

Forgive me, but this is a very weird and opaque way of presenting your FI-number.
50x expenses seemed extraordinarily high.... but then you explain that this is just because of large, short term and imminent expenses (namely college tuitions x2). But your first will be out of college before you pull the rip cord, so ...
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pecunia

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Re: How Much Is Enough To Retire?
« Reply #16 on: May 08, 2018, 03:43:05 PM »
You should go through all of your expenses for the past year, categorize them and add them up.  Some things may be less upon retirement.  You may not have a commute so you'll use less gasoline.  You may eat out less as you will have time to cook.  You will not have an employer providing health insurance so that may go up.  Once you've figured what it will really cost you to live a year, then multiply by 25.  You'll need that much. 

Maybe, you've got another source of income.  I'd still multiply by 25.  It doesn't hurt to have margin.  It could throw you into a higher tax bracket, but you will probably still be better off.

Most of these guys on this site say to put the money into low cost Fidelity or Vanguard index funds and take out no more than 4 % a year.  Cross your fingers that it will last.


Car Jack

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Re: How Much Is Enough To Retire?
« Reply #17 on: May 09, 2018, 06:35:33 AM »
50X normal expenses for me.  I say normal expenses because I'm in the middle of paying tuition for my 2 sons.  Just wrote the checks for $9k today to cover a month of one kid and a summer course for the other so he'll have the pre-req's for Finite Analysis in the fall.  August is when the big bill comes.  Once son #1 graduates college in a year, I'll give myself the go ahead to give it up, although I haven't made any firm commitments yet.  I'm a car guy and working another 6 months to buy a Nissan GT-R could be ok.

Forgive me, but this is a very weird and opaque way of presenting your FI-number.
50x expenses seemed extraordinarily high.... but then you explain that this is just because of large, short term and imminent expenses (namely college tuitions x2). But your first will be out of college before you pull the rip cord, so ...


Sure.....I'll clear it up, hopefully.

I'm already at 44 times expenses IF (that's a big if), I exclude college expenses.

So......I'm not waving bye bye to the job just yet.  Son #1 will hit a quarter mil by the time he graduates next year.  Son #2 may go a cheaper route.  (*may*)  I am a big believer in the best education that's appropriate for my kids' abilities.  So I'm keeping a reserve for maybe $300k for son #2 in case he goes on or transfers to a more expensive college.  (note: son #2 is in a specialized high school for a disability and while we fight with our home school district for support, it's $56k out of our pocket a year.  We hope to get half from the district.) 

Since these are large, unknown expenses (I don't know what the number will actually be), I continue to work.  Well, that and insurance. 

So by the time #1 graduates college (next spring) and #2 graduates high school (next spring), I'll set aside $300k and look to be sure we have 50X expenses available.  If not, I'll just stay in the job until we do.  50x is my own number.  I'm a big "safety net" guy.  If something goes wrong, I plan for plan B from the start.  With 50x, I think that's covered pretty well.

ender

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Re: How Much Is Enough To Retire?
« Reply #18 on: May 09, 2018, 07:28:52 AM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.

https://forum.mrmoneymustache.com/investor-alley/stop-worrying-about-the-4-rule/

nereo

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Re: How Much Is Enough To Retire?
« Reply #19 on: May 09, 2018, 07:54:32 AM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.

https://forum.mrmoneymustache.com/investor-alley/stop-worrying-about-the-4-rule/

30x is safer than 25x, and 40x is safer than 30x, and ...

As ender indicated with the link, you are chasing ever smaller margins of safety, and while more is always safer, each of us has a finite amount of time and health.  Everyone has to decide what is 'safe enough' for themselves in their own particular circumstances.
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ChpBstrd

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Re: How Much Is Enough To Retire?
« Reply #20 on: May 09, 2018, 12:44:51 PM »
$1.25M, but I'm working to reduce that number.

moof

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Re: How Much Is Enough To Retire?
« Reply #21 on: May 09, 2018, 04:06:45 PM »
$1.65M to do it today, $1.4M needed at my planned date.  YMMV.

ender

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Re: How Much Is Enough To Retire?
« Reply #22 on: May 10, 2018, 06:45:19 AM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.

https://forum.mrmoneymustache.com/investor-alley/stop-worrying-about-the-4-rule/

30x is safer than 25x, and 40x is safer than 30x, and ...

As ender indicated with the link, you are chasing ever smaller margins of safety, and while more is always safer, each of us has a finite amount of time and health.  Everyone has to decide what is 'safe enough' for themselves in their own particular circumstances.

Yep.

If you think about it, there's a good percentage chance you succeed even if you blindly follow a 5% or 6% SWR plan too (ie never adjust). Making a few adjustments to your withdrawal plan, whether supplementing withdrawals with work or changing spending, etc, means it's pretty likely  to succeed even higher than 4%.

CorpRaider

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Re: How Much Is Enough To Retire?
« Reply #23 on: May 10, 2018, 07:33:34 AM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.

The student has promoted himself to master.

OurTown

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Re: How Much Is Enough To Retire?
« Reply #24 on: May 10, 2018, 07:55:25 AM »
$1m with a paid-for house.  YMMV.

nereo

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Re: How Much Is Enough To Retire?
« Reply #25 on: May 10, 2018, 07:55:48 AM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.

The student has promoted himself to master.
master of what?
"Do not confuse complexity with superiority"

thd7t

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Re: How Much Is Enough To Retire?
« Reply #26 on: May 10, 2018, 09:22:31 AM »
How much does it take to cover your expenses? Multiply that by 25.  That will get you in the ballpark.

True.  Although x 30 is safer if you want to retire young.
Master of working longer than necessary?  Master of a good SWR if you invest in high cost funds?  Master of prime number SWRs?  So many choices!

The student has promoted himself to master.
master of what?

Bateaux

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Re: How Much Is Enough To Retire?
« Reply #27 on: May 10, 2018, 08:39:48 PM »
1 million for yourself, 500k for each person you plan to support in same household.
 
You alone = 1 million 
You + partner = 1.5 million. 
You + partner + lifetime dependent = 2 million
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DreamFIRE

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Re: How Much Is Enough To Retire?
« Reply #28 on: May 10, 2018, 09:16:38 PM »
1.25M is 63X FIRE barebones for me.  That's where I'm at today.  That should be more than enough to allow extra travel/entertainment/discretionary beyond those bare bones.  But my planned FIRE date is a year away, so I hope the stash grows to an even greater excess.
« Last Edit: May 10, 2018, 09:24:27 PM by DreamFIRE »

pecunia

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Re: How Much Is Enough To Retire?
« Reply #29 on: May 11, 2018, 05:44:15 PM »
Quote
1.25M is 63X FIRE barebones for me.

1,250,000 /63 = $19,841 per year

$1,653.44 /month 

Yeh - I guess you could do it on that.

With the 4 percent rate , it's $50K a year.

I found this on a CNBC link from 2017 for median incomes by age.

    16 to 19 years: $422 weekly/$21,944 annually
    20 to 24 years: $525 weekly/$27,300 annually
    25 to 34 years: $776 weekly/$40,352 annually
    35 to 44 years: $976 weekly/$50,752 annually
    45 to 54 years: $975 weekly/$50,700 annually
    55 to 64 years: $966 weekly/$50,232 annually
    65 years and older: $904 weekly/$47,008 annually

Looks like the $50K a year will buy you a LOT of freedom.



DreamFIRE

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Re: How Much Is Enough To Retire?
« Reply #30 on: May 11, 2018, 09:16:26 PM »
Quote
1.25M is 63X FIRE barebones for me.

1,250,000 /63 = $19,841 per year

$1,653.44 /month 

Yeh - I guess you could do it on that.

With the 4 percent rate , it's $50K a year.

Looks like the $50K a year will buy you a LOT of freedom.
That looks right.  That's a few hundred per month more than my current barebones due to healthcare coverage changes during FIRE, but it's pretty complete of all short term / long term expenses averaged out.  I've got a nice spreadsheet with my different age ranges and how I expect to fund the spending during each time period as I juggle to optimize for ACA and minimize taxes.  It looks like my long term average federal taxes will be a little over $1300/yr based on today's tax law, so I hope to have close to $30K/yr extra over barebones to play with when I FIRE, whether for fun/travel/discretionary or to allow me to cut back on my spending if I feel the need.  It's pretty comforting to have that cushion - not sure I'll really ever spend that much since 2010 was that last year I spent $20K or more, and that was including my regular expenses.  But FIRE will give me the time/freedom to do more things.

Malkynn

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Re: How Much Is Enough To Retire?
« Reply #31 on: May 12, 2018, 07:03:09 AM »
We don’t really have a goal, but we expect ~50X annual expenses. We each will have ~25X annual expenses saved separately. I like the idea of each of us being independently FIRE. I have a thing about total self sufficiency.

2Birds1Stone

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Re: How Much Is Enough To Retire?
« Reply #32 on: May 12, 2018, 01:22:05 PM »
How much do you need to eat to feel full?

beer-man

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Re: How Much Is Enough To Retire?
« Reply #33 on: May 12, 2018, 09:53:08 PM »
500K but only so low because of our low expenses and the fact that i don't plan on completely retiring just downshifting when the time comes. 10k a yr in part time work can add 250k to your portfolio.

alanB

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Re: How Much Is Enough To Retire?
« Reply #34 on: May 15, 2018, 12:35:39 PM »
How much do you need to eat to feel full?

Approx 1 liter, but you might want to bump it up to 1.5 L just to be safe

thd7t

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Re: How Much Is Enough To Retire?
« Reply #35 on: May 15, 2018, 12:41:52 PM »
How much do you need to eat to feel full?

Approx 1 liter, but you might want to bump it up to 1.5 L just to be safe
That's a lot of blood...

Dicey

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Re: How Much Is Enough To Retire?
« Reply #36 on: May 15, 2018, 01:08:36 PM »
You guys are funny.

Here's a twist: We have plenty of money to retire, but DH's mom has ALZ and lives with us. We can't travel easily and DH would go nuts without enough to do, so he still works. He has a great job with wonderful benefits, and a sweet pension due in a few years, so why not?

Be sure to enjoy life along the way. We did that, therefore we don't resent that we are temporarily (5+ years now and counting) "trapped". Don't put everything off until "X" happens. Be smart about how you do it, but be sure to allow for the good things in the here and now.
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mjones1234

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Re: How Much Is Enough To Retire?
« Reply #37 on: May 17, 2018, 08:55:21 PM »
my uncle and aunt paid cash (75k) for a modular home in a beautiful park in florida. they have about 50k in their IRA, work 10 hours a week and collect social security. they live a wonderful life, don't want for anything no worries.

Malkynn

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Re: How Much Is Enough To Retire?
« Reply #38 on: May 18, 2018, 04:31:10 AM »
You guys are funny.

Here's a twist: We have plenty of money to retire, but DH's mom has ALZ and lives with us. We can't travel easily and DH would go nuts without enough to do, so he still works. He has a great job with wonderful benefits, and a sweet pension due in a few years, so why not?

Be sure to enjoy life along the way. We did that, therefore we don't resent that we are temporarily (5+ years now and counting) "trapped". Don't put everything off until "X" happens. Be smart about how you do it, but be sure to allow for the good things in the here and now.

Damn bloody wise words.
No one can save their way to a guaranteed lifestyle later on, plans change, life happens, and living for tomorrow can make you crazy.