Poll

You have kids and were left enough cash to retire 10 years earlier than planned, say age 52, do you?

Leaving the work place ASAP and will leave little $ for the kids.
126 (57%)
Keep working as nothing happend and build a larger legacy for the kids.
11 (5%)
Work just enough to cover daily living and let the nut grow for another 5-10 years.
48 (21.7%)
Work full time for another 5 years and call it 50/50
28 (12.7%)
Just drink better beer.
8 (3.6%)

Total Members Voted: 217

Author Topic: $500,000 found me, now what?  (Read 14231 times)

ImCheap

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$500,000 found me, now what?
« on: November 07, 2016, 11:20:43 AM »
This is somewhat a hypothetical what would you do, the monies are real, the people and names have been changed to protect the innocent:)

You are 50 years old and an old lost aunt just tossed you $500,000, if want to think about it the other way of leaving the $500,000 that's fine as well.

You have been saving and investing you whole life, house was paid off in you r 40's, have a couple of kids,  if the world hangs together you will be good to FIRE at 60 if not a few years before without the new $500,000 that just dropped in your lap.

Now the to the question at hand, do you keep on working so you can now leave you kids a much more sizable legacy or say screw it and pull plug at 50 and spend the new found dollars? To put it another way this extra dollars can buy you 10 years of freedom or you can pay it forward to your kids if you keep on working.

You were never planning on leaving your kids much of anything unless you become plant food much quicker than you may have wanted.

You have many other options in the middle like work part time etc., most likely what I would do but for discussion lets keep it at both ends of the scale as noted above.

What say you?







Shor

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Re: $500,000 found me, now what?
« Reply #1 on: November 07, 2016, 11:30:31 AM »
If you have normal, well-adjusted kids, they don't want a big(ger) pile of money left to them.
They want you to be happy, and they want to pursue their own happiness. Leaving a legacy fulfills neither of those goals.

I would go ahead and retire; spend that money. Live a comfortable sustainable lifestyle in retirement, and everyone's happy. If you're even partway mustachian then you'll quickly find out that spending more money won't make you any happier. More money is great, more money than you'll ever need or want in your lifetime just starts to get sad...

bacchi

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Re: $500,000 found me, now what?
« Reply #2 on: November 07, 2016, 11:34:52 AM »
I'd retire. The 4% rule will most likely leave your heirs a sizable amount anyway.

onlykelsey

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Re: $500,000 found me, now what?
« Reply #3 on: November 07, 2016, 11:37:49 AM »
I definitely would not work longer for my kid's inheritance (unless maybe they had serious special needs and would need care for decades after I was gone or something extreme like that).

Realistically, I would probably feel sort of morally obliged to keep working for a few years and earmark the money for charity.

I will 100% not inherit anything, but that seems to be my emotional response to realizing I could retire at 32 or 35: i've had it too easy, work more and give back.  We'll see what happens when I get a bit closer to that tipping point.

Guesl982374

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Re: $500,000 found me, now what?
« Reply #4 on: November 07, 2016, 11:42:44 AM »
Any 'golden handcuffs' at your job (medical? pension?)?

If not, I would probably pull the plug. With that being said, I will probably be earning money after I hit FIRE so the 'extra' legacy opportunity (or is it a problem?) will still most likely be there.

BTDretire

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Re: $500,000 found me, now what?
« Reply #5 on: November 07, 2016, 11:45:16 AM »
I say retire, but don't spend the money, only spend "part of the money earned"
after you have the money invested.

Slow&Steady

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Re: $500,000 found me, now what?
« Reply #6 on: November 07, 2016, 11:49:30 AM »
Windfalls that are a result of something we (DH & I) did would go directly to us retiring early.

Windfalls that are the result of something that somebody else did, I would feel obligated to pay it forward.  I would probably decide on an amount that will help my children but still allow us to speed up retirement plans.  Put the amount for them in a trust (or gift it to them depending on preference) and see how many years I can clock out early with what is left (plus what I have saved).

Daisy

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Re: $500,000 found me, now what?
« Reply #7 on: November 07, 2016, 11:54:02 AM »
What are your feelings about your current work situation? If you feel happy and feel like  you are contributing to society through your work, you could continue to work, but you can cut back on your hours.

If not, RETIRE NOW!

Your kids may still get a sizable inheritance due to the 4% rule as mentioned above.

You might be more able to contribute to your kids well being by being FIREd and be able to spend more time with them and potential grandchildren. Also, you will have time to do positive things in your community with your new free time. It isn't just about the money...

tonysemail

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Re: $500,000 found me, now what?
« Reply #8 on: November 07, 2016, 11:56:58 AM »
i would retire earlier

swick

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Re: $500,000 found me, now what?
« Reply #9 on: November 07, 2016, 12:01:33 PM »
Which would be more beneficial to your kids? Having you home, not ever stressed out about going to work? All the awesome opportunities you would have to do things and grow and learn as a family? Or a little more money in the bank way in the future? They have time to amass their own fortunes. You only have so long to spend with them and teach them the life skills they need to do so.

MandalayVA

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Re: $500,000 found me, now what?
« Reply #10 on: November 07, 2016, 12:07:23 PM »
As a couple of windfalls directly contributed to me being able to FIRE sometime next year, I say pull the trigger.  Your kids will be fine without you working your ass off for their inheritance.  :D

ImCheap

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Re: $500,000 found me, now what?
« Reply #11 on: November 07, 2016, 12:08:03 PM »
OP here, good replies thus far.

We both like our jobs most of the time (depends on the day:) The older I get the less crap I can deal with, also the less I could care about most things material (that's more a common theme in our lives).

Current thinking is make enough to live on and just keep the nut intact to grow, that would mean cutting back a good 40-50%. Seems to be the best of both worlds.

 

FINate

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Re: $500,000 found me, now what?
« Reply #12 on: November 07, 2016, 12:10:52 PM »
Retire. Life is too short to waste a lot of time working just to leave more money for your kids. You have an opportunity to live life with much less stress, with plenty of time to cook healthy meals at home and to workout more consistently. In other words, you can live a much healthier life and give your kids the irreplaceable gift of more time with you, both because you have more free time but also because you'll likely be healthier.

ImCheap

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Re: $500,000 found me, now what?
« Reply #13 on: November 07, 2016, 12:14:11 PM »
Retire. Life is too short to waste a lot of time working just to leave more money for your kids. You have an opportunity to live life with much less stress, with plenty of time to cook healthy meals at home and to workout more consistently. In other words, you can live a much healthier life and give your kids the irreplaceable gift of more time with you, both because you have more free time but also because you'll likely be healthier.

Have been thinking about this a lot the past couple of years, just had a day off to myself. Got up had a great simple breakfast, nice long walk and just did whatever I wanted, reason for this thread.

TrMama

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Re: $500,000 found me, now what?
« Reply #14 on: November 07, 2016, 12:15:02 PM »
Windfalls that are a result of something we (DH & I) did would go directly to us retiring early.

Windfalls that are the result of something that somebody else did, I would feel obligated to pay it forward.  I would probably decide on an amount that will help my children but still allow us to speed up retirement plans.  Put the amount for them in a trust (or gift it to them depending on preference) and see how many years I can clock out early with what is left (plus what I have saved).

This is my view exactly. In fact, we're in a similar situation to the OP, except we're 10 years younger. Our windfall is now in it's 3rd generation.

Since we've benefited immensely from generational "wealth" we would feel like complete tools if we spent it on ourselves and left our kids to fend for themselves.

So we're spending some now so that our kids can have some great experiences before they launch. The rest will be used to ensure we retire early (but not today) and we'll still leave enough so they can either inherit when we croak, or we'll give them large gifts in their 30s or 40s.

Go reread MMMs post on the money wave. With $500K, plus whatever you're already saved, you have enough to be way out in front of the wave yourself, plus you can help your kids get in front of the wave too.

In the meantime, do nothing for a year. Use the time to ruminate on the best use of the cash. You'll be surprised at how your ideas change over time.

FINate

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Re: $500,000 found me, now what?
« Reply #15 on: November 07, 2016, 12:15:29 PM »
Makes me think of something a wise man once said:



EDIT: While I think this is true in general, not saying it's necessarily applicable to you. This was just something on my mind when I finally decided to pull the trigger on RE.
« Last Edit: November 07, 2016, 12:36:50 PM by FINate »

golfreak12

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Re: $500,000 found me, now what?
« Reply #16 on: November 07, 2016, 12:21:07 PM »
I'd go part time in a job that gives me the flexibility to take time off when necessary.

Cassie

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Re: $500,000 found me, now what?
« Reply #17 on: November 07, 2016, 01:16:11 PM »
No generational wealth for me so don't feel obligated to leave my kids any. WE have helped them when younger and needed it.  I would do whatever it is that I wanted to do.

charis

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Re: $500,000 found me, now what?
« Reply #18 on: November 07, 2016, 01:17:13 PM »
If you have normal, well-adjusted kids, they don't want a big(ger) pile of money left to them.
They want you to be happy, and they want to pursue their own happiness. Leaving a legacy fulfills neither of those goals.

I think this goes a little far.  I consider myself to be normal and well-adjusted,  I don't want for anything, and I would much rather my parents be retired than trying to increase their "legacy," but I would certainly be delighted with any size pile of money that I might be lucky enough to receive.  Pursuing one's own happiness, ie FIRE, can certainly be helped with a windfall. 

I certainly vote, however, for not worrying about how much money you are leaving your kids.

FireHiker

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Re: $500,000 found me, now what?
« Reply #19 on: November 07, 2016, 01:38:39 PM »
I would absolutely retire, and then find something to do that will make me happy. I don't hate my job, but I don't love it. It brings me very little personal fulfillment or satisfaction beyond the stability and relative affluence it provides for my family. There are plenty of other things that interest me that WOULD bring me more happiness, but don't make enough money to consider right now. If I suddenly came into a large sum of money that would make my job no longer be a necessity for the family's bottom line, I would definitely ship and do something that would bring me more joy and satisfaction!

ImCheap

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Re: $500,000 found me, now what?
« Reply #20 on: November 07, 2016, 01:51:35 PM »
I went and added a poll for S&G's, a lot of fun and interesting takes on this.

FiguringItOut

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Re: $500,000 found me, now what?
« Reply #21 on: November 07, 2016, 02:00:40 PM »
I would switch to some sort of part time work, probably still in my field though, to cover my day to day expenses and let the honey pot sit and grow for a little while.  In my case it would be about 6 years.  Then I would move to a LCOL area, may be still do some part time work, travel, enjoy my free time, and also very much enjoy my children's financial aid packages from colleges since I will have minimum income.  (And yes, I know, non retirement savings count towards FAFSA, but not as much as earned income).

MishMash

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Re: $500,000 found me, now what?
« Reply #22 on: November 07, 2016, 02:03:38 PM »
Actually happened to us this past year.  Both still working, DH is chained to pension/healthcare for 5 more years (military) I'm just apparently a glutton for punishment.  We've done a bunch of "fun" stuff this year though, cut back the savings rate to about 50% and spent the difference on a trip to Europe, several tuna fishing trips (longtime goal and we found a head boat), a few trips to see family, and we definetely upgraded our beer ;-)  I woudn't wish what we went through prior to receiving the inheritance on anyone though. 2015 was  BITCH of a year that involved multiple family losses, accidents, suicides etc.  I think a part of the "still working" is a feeling of guilt frankly.

boarder42

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Re: $500,000 found me, now what?
« Reply #23 on: November 07, 2016, 02:07:48 PM »
i dont think your options are correct.  a mix of all of them is possible.  i mean what is your spending level at that after saving really well as you put it that 500k doesnt make you closer than 10 years away from FIRE.

Spitfire

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Re: $500,000 found me, now what?
« Reply #24 on: November 07, 2016, 02:11:19 PM »
I'd retire and spend more time with my kids (and grandkids if you have em!).

MrSal

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Re: $500,000 found me, now what?
« Reply #25 on: November 07, 2016, 02:20:14 PM »
Windfalls that are a result of something we (DH & I) did would go directly to us retiring early.

Windfalls that are the result of something that somebody else did, I would feel obligated to pay it forward.  I would probably decide on an amount that will help my children but still allow us to speed up retirement plans.  Put the amount for them in a trust (or gift it to them depending on preference) and see how many years I can clock out early with what is left (plus what I have saved).

This is my view exactly. In fact, we're in a similar situation to the OP, except we're 10 years younger. Our windfall is now in it's 3rd generation.

Since we've benefited immensely from generational "wealth" we would feel like complete tools if we spent it on ourselves and left our kids to fend for themselves.

So we're spending some now so that our kids can have some great experiences before they launch. The rest will be used to ensure we retire early (but not today) and we'll still leave enough so they can either inherit when we croak, or we'll give them large gifts in their 30s or 40s.

Go reread MMMs post on the money wave. With $500K, plus whatever you're already saved, you have enough to be way out in front of the wave yourself, plus you can help your kids get in front of the wave too.

In the meantime, do nothing for a year. Use the time to ruminate on the best use of the cash. You'll be surprised at how your ideas change over time.

As a kid that didn't get my family's wealth because my previous generation screwed it up, I agree with that. My family is very wealthy, however I am the first to say that my father and his uncles weren't brought up the best way. They were the typical royal blood, fancy pants teens and didnt do much in terms of academics. Even though they didnt spend their way, they did some incredible mistakes to make all the wealth disappear - my family had castles in Europe for f*cks sake and building complexes in the main avenues of the main european capitals, and as story goes ( I was 2 years old when this happened) they did something where everything was sold off at like 2 cents on the dollar or less.

Its painful walking by these landmarks even though I know I shouldn't feel any type of entitlement to those material things. I think in my opinion, is just a sadness of something that was my family's legacy that had been in "our" hands for 600+ years end up in complete strangers' hands.

TheInsuranceMan

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Re: $500,000 found me, now what?
« Reply #26 on: November 07, 2016, 02:37:11 PM »
Yep, I'm the odd ball.  I'd keep working, not really to build my legacy and increase the wealth my kids would inherit, but because I enjoy my job.  Now, I'd probably slow down a bit, take some unpaid days a week, farm a bit more.  But, I certainly wouldn't just up and retire (given, I'm only 28)

ImCheap

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Re: $500,000 found me, now what?
« Reply #27 on: November 07, 2016, 02:56:36 PM »
i dont think your options are correct.  a mix of all of them is possible.  i mean what is your spending level at that after saving really well as you put it that 500k doesnt make you closer than 10 years away from FIRE.

It can be a mix of any of them, just pick what seems the best today.

On a personal level in simple math, inflation be dammed $500,000 is a tad more than our current burn rate of about $40k/year (we still have kids at home) to get to that 10 year early bet. If we kept what we have now not counting the extra $500k and did not add to it for another 10+ years I think we would be ok and zero out at the end!

ImCheap

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Re: $500,000 found me, now what?
« Reply #28 on: November 07, 2016, 03:01:57 PM »
Yep, I'm the odd ball.  I'd keep working, not really to build my legacy and increase the wealth my kids would inherit, but because I enjoy my job.  Now, I'd probably slow down a bit, take some unpaid days a week, farm a bit more.  But, I certainly wouldn't just up and retire (given, I'm only 28)
]

That struck a chord, if we won the lottery we would spend all farming! Would be so nice to buy the family farm back!

Secretly Saving

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Re: $500,000 found me, now what?
« Reply #29 on: November 07, 2016, 03:48:28 PM »
We are in our 30s and just received a significant inheritance.   We plan to keep everything (relatively) the same for at least a year.   By relatively, I mean that we're not planning on spending much right now.  Just doing things like rebalancing accounts for our age and setting things for growth where previously that money was less aggressively being invested due to the age of the owner.   We'll have to take RMDs, though, so maybe we'll spend a bit of that money on something family related.  I feel really strongly about not moving too fast too soon.

BallerOnABudget

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Re: $500,000 found me, now what?
« Reply #30 on: November 07, 2016, 04:01:24 PM »
I was a little late to the MMM game, so $500k falling into my lap would not mean instant retirement. But, I definitely would consider it "FU money." I'd let it build and keep working until we hit our magic number. With that extra money in the stash, though, work would be a whole hell of a lot less stressful. I wouldn't get pushed into projects I don't want, I would not work into the evening and on Sundays like I occasionally do now, and if at any point I feel like I just cant do it anymore, I'll coast into a pay-the-bills job while the stash grows.

SeaEhm

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Re: $500,000 found me, now what?
« Reply #31 on: November 07, 2016, 07:33:19 PM »
Where is the "keep working like nothing happened, invest the money, and then spend it all on future self?"

I hope that my children don't expect any cash from me when I die.  (given that I die when they are adults in their 40s+)

If I die early, they will receive money ...

Awesome story MrSal!  Sorry to hear about the outcome, but I think it's amazing to hear about family heritage extending multiple times that of the length of the US!

pdxmonkey

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Re: $500,000 found me, now what?
« Reply #32 on: November 07, 2016, 08:32:11 PM »
I chose drink better beer. Really though, that's just a starter while thinking about the other 4. In addition to drinking better beer I'd go to a 4 day week if possible to ease my way into more free time. Filling up all 3 free days and still have more things you want to do? Cut work back to 3 days if possible.

SwordGuy

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Re: $500,000 found me, now what?
« Reply #33 on: November 07, 2016, 09:45:08 PM »
So, you have enough to FIRE now, correct?

How old are your kids and how much do you make a year?

Let's say you and your wife take home $50k a year and your kids are 5 and 3 years old.

Work one extra year and put $50,000 in Vanguard's VTSAX for your 5 year old.
Work one more year and put $50,000 in for your 3 year old.

The kids funds will grow to be about $140,000 in today's dollars by the time they turn 20.  That should be enough to get them a good education or a house in a low cost of living area.

If you work one more year and split it 50-50 between the two kids, they'll both have a nest egg to get them going.  By the time they are 40 it should be worth around $210k each.   

That plus whatever you leave behind should serve them very well.

FYI - never, ever, ever let the kids know that money is there for them until they are grown up enough to use it responsibly.   Let them grow up thinking that they will be responsible for funding their own education.   Let them start their own yard business or some other way of making money.  Ditto for good grades for scholarships.   Otherwise they might just slack off and turn into losers.  I've seen it happen.



Villanelle

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Re: $500,000 found me, now what?
« Reply #34 on: November 08, 2016, 03:16:30 AM »
I'd retire immediately.  Actually, I'd wait at least 4-6 months, in order to make sure it's what I truly wanted, but I can't imagine my mind would change.  If down the road I wanted to work at a job I found fulfilling, so be it. 

I don't have kids, but if I did, I'd likely set up somewhat modest college funds for them before quitting, if I hadn't already done so. 

boarder42

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Re: $500,000 found me, now what?
« Reply #35 on: November 08, 2016, 03:30:09 AM »
i dont think your options are correct.  a mix of all of them is possible.  i mean what is your spending level at that after saving really well as you put it that 500k doesnt make you closer than 10 years away from FIRE.

It can be a mix of any of them, just pick what seems the best today.

On a personal level in simple math, inflation be dammed $500,000 is a tad more than our current burn rate of about $40k/year (we still have kids at home) to get to that 10 year early bet. If we kept what we have now not counting the extra $500k and did not add to it for another 10+ years I think we would be ok and zero out at the end!


You need to do the actual numbers bc 500k invested in equities turns into 1MM in 10 years and that's in today dollars.  So you either have very little saved outside of this or spend much more than 40k or don't abide by the 4% rule. Or just haven't done the math.

ltt

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Re: $500,000 found me, now what?
« Reply #36 on: November 08, 2016, 04:28:51 AM »
It really depends on the ages of the kids----still in school, college, or grown?

boarder42

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Re: $500,000 found me, now what?
« Reply #37 on: November 08, 2016, 06:31:28 AM »
It really depends on the ages of the kids----still in school, college, or grown?

not relevant.  spending is relevant. if its a baby and you spend 200k a year on your kid vs a kid putting himself thru college the only relevant part is what you're spending on your kids. vs a baby you're spending 4k a year on and a college kid you're putting thru harvard.  or a grown kid who is dependent and has high cost disabilities you still must support.

spend is relevant age of kids not so much.

ImCheap

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Re: $500,000 found me, now what?
« Reply #38 on: November 08, 2016, 06:55:52 AM »
i dont think your options are correct.  a mix of all of them is possible.  i mean what is your spending level at that after saving really well as you put it that 500k doesnt make you closer than 10 years away from FIRE.

It can be a mix of any of them, just pick what seems the best today.

On a personal level in simple math, inflation be dammed $500,000 is a tad more than our current burn rate of about $40k/year (we still have kids at home) to get to that 10 year early bet. If we kept what we have now not counting the extra $500k and did not add to it for another 10+ years I think we would be ok and zero out at the end!


You need to do the actual numbers bc 500k invested in equities turns into 1MM in 10 years and that's in today dollars.  So you either have very little saved outside of this or spend much more than 40k or don't abide by the 4% rule. Or just haven't done the math.

I don't abide by the 4% rule for a 40 year horizon (that's what I'm looking at now), I think its too steep for even a 30 year horizon. I happen to like Wade Phau take on it, I agree with him in one regard (yeah my crystal ball is foggy) but I don't see the same growth in the next 60 years to be same as the last 60.  I do think he maybe on the low side however, 3% give or a take for a 30 year horizon seems like a sane number for a very rough guess where one may want to shoot for. The following is nice write up of it if anyone cares, he has a 40 year horizon at 1.49%.

http://www.fa-mag.com/userfiles/stories/whitepapers/2015/WealthVest_Sept_2015_Whitepaper/12040-Pfau-Sustainable-Withdrawal-Rates-Whitepaper-.pdf
Quote
As a preview of the findings, we estimate that a 40% stock allocation and a 30-year planning horizon would support a 2.1% sustainable initial spending rate, provided one is willing to accept a 10% chance for failure [with a volatile investment portfolio, there
is no such thing as a guaranteed spending rate]. Extending the horizon to 40 years, with the same asset allocation and acceptable failure probability, drops the sustainable spending rate to 1.49%. A more realistic assessment of sustainable spending from a
volatile investment portfolio does suggest that the 4%  rule-of-thumb for retirement spending is considerably
more risky than many realize. These numbers may seem low, and it is true that there is still upside potential for these strategies to end up doing better  with the investments in the volatile portfolio, but this is the reality for clients self-managing market and longevity risks, paying fees, and entering retirement in the current market environment.


Like I noted we don't need to really add much more to what we currently have, just need to hang on to what we have.

I don't understand what you are saying "500k invested in equities turns into 1MM in 10 years and that's in today dollars" today its worth $500k that is the today number I would be working with.
« Last Edit: November 08, 2016, 06:58:43 AM by ImCheap »

Mississippi Mudstache

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Re: $500,000 found me, now what?
« Reply #39 on: November 08, 2016, 07:08:43 AM »
Wow, talk about some terrible poll questions. Why on earth would you frame the choices around the size of the inheritance that you would leave your children? If that's what you're interested in, then just ask questions about the size of inheritance that we wish to leave to our children.

For the record, I don't give a shit about my children's inheritance, because I expect them to be retired long before I croak. Likewise, I don't give a shit about my own inheritance, because I hope to be retired well before my Dad kicks the bucket. It will have little effect on my lifestyle or happiness, so why on earth should my Dad work longer to leave me more money? He can spend every dime to his name, for all I care.

boarder42

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Re: $500,000 found me, now what?
« Reply #40 on: November 08, 2016, 07:11:35 AM »
500k invested over 10 years at 7% ROI taking out 3% for inflation is worth 1MM dollars.

3.5% has never failed in history of the us stock market ... so waiting for a 3% SWR is utterly absurd IMO.

1.49% spending rate is laughable whats the asset allocation 20/80 stocks/bonds. sorry it was 40% stocks.  i didnt see that part.  no one here is advocating a 4% SWR on 40% stocks closer to 80/20 or higher.

though still if you had nothing saved now you'd be able to pull out 30k at your SWR in 10 years ... but you say you have current savings so that should happen much faster.
« Last Edit: November 08, 2016, 07:23:13 AM by boarder42 »

ImCheap

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Re: $500,000 found me, now what?
« Reply #41 on: November 08, 2016, 07:41:20 AM »
Wow, talk about some terrible poll questions. Why on earth would you frame the choices around the size of the inheritance that you would leave your children? If that's what you're interested in, then just ask questions about the size of inheritance that we wish to leave to our children.

For the record, I don't give a shit about my children's inheritance, because I expect them to be retired long before I croak. Likewise, I don't give a shit about my own inheritance, because I hope to be retired well before my Dad kicks the bucket. It will have little effect on my lifestyle or happiness, so why on earth should my Dad work longer to leave me more money? He can spend every dime to his name, for all I care.

Your missing the point, its not about how much one wants leave your kids it rather do you pass on the good fortune that someone gave you or do spend it on hookers and blow. So I ask the question if your family leaves you meaningful amount, you pick the number, do you feel you should pass that on to your kids or plan on spending it down to 0, that is the question.

I do hope you will be long retired before you parents kick the bucket but I think for many that is not the case. I can tell you without any question that will no be the case for either myself of my spouse, our parents all passed when we in our 30s-40's. Would have been nice to be retired when we were 30-40 however. We were proud to show our parents that we had left a paid for home when we hit 40, thought we were doing well at that time!

boarder42

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Re: $500,000 found me, now what?
« Reply #42 on: November 08, 2016, 07:47:46 AM »
you are easily going to do both assuming you dont put your money in an annuity or go to 40% stocks like you indicated above.  the 4% rule leaves piles of money alot of the time and you're looking at a 3% rule ... if you want to leave money for you kids the best thing to do is to not be so conservative and work til your 60 just so you can have a 2% or 1.5% withdrawal rate while being heavily invested in bonds.  you're litterally destroying any wealth you built with a shortsided look of it lasting just your lifetime and trying to be safe for your retirement.  vs leaving an actual legacy.

ImCheap

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Re: $500,000 found me, now what?
« Reply #43 on: November 08, 2016, 07:48:20 AM »
3.5% has never failed in history of the us stock market ... so waiting for a 3% SWR is utterly absurd IMO.

1.49% spending rate is laughable whats the asset allocation 20/80 stocks/bonds. sorry it was 40% stocks.  i didnt see that part.  no one here is advocating a 4% SWR on 40% stocks closer to 80/20 or higher.

Will have to disagree on the 3.5%, if it turns out to be 3.5%+ great, I just don't see the same world as we had in the past.  For planning even more so for a longer time horizon its the engineer in me, I tend to look at more at a worse case, I use 3% for a 30 year horizon currently, about 10 years ago I did 4%. I know one thing I don't want my wife to go back to work at 85, I will be long gone before that based on family history, luck to make 70.

boarder42

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Re: $500,000 found me, now what?
« Reply #44 on: November 08, 2016, 07:53:17 AM »
3.5% has never failed in history of the us stock market ... so waiting for a 3% SWR is utterly absurd IMO.

1.49% spending rate is laughable whats the asset allocation 20/80 stocks/bonds. sorry it was 40% stocks.  i didnt see that part.  no one here is advocating a 4% SWR on 40% stocks closer to 80/20 or higher.

Will have to disagree on the 3.5%, if it turns out to be 3.5%+ great, I just don't see the same world as we had in the past.  For planning even more so for a longer time horizon its the engineer in me, I tend to look at more at a worse case, I use 3% for a 30 year horizon currently, about 10 years ago I did 4%. I know one thing I don't want my wife to go back to work at 85, I will be long gone before that based on family history, luck to make 70.

so why arent you open to what this forum is about ... i'm an engineer ... its numbers.  the first 5-10 years of FIRE will tell you if you need to work more.  there are also leading indicators to let you know what should be a reasonable SWR.  and thats the inverse of the shiller PE .. kitces and mad fientist have done a few articles on how the inverse of the shiller PE works.  if you retire at 50ish you should know by the time you're 60 if it appears you'll even have to work again.. not to mention social security etc. that dont appear to be in your calculations. 

If you truly want to leave your kids something dont put 60% of you money in bonds.

ImCheap

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Re: $500,000 found me, now what?
« Reply #45 on: November 08, 2016, 07:53:29 AM »
you are easily going to do both assuming you dont put your money in an annuity or go to 40% stocks like you indicated above.  the 4% rule leaves piles of money alot of the time and you're looking at a 3% rule ... if you want to leave money for you kids the best thing to do is to not be so conservative and work til your 60 just so you can have a 2% or 1.5% withdrawal rate while being heavily invested in bonds.  you're litterally destroying any wealth you built with a shortsided look of it lasting just your lifetime and trying to be safe for your retirement.  vs leaving an actual legacy.

Agreed completely, except being too bond heavy, if I have much more than I think we will need the bond pile will be smaller. I also do believe as one ages, good heath be willing you will be spending less in your 80's vs 60's, hence you could increase equities as you age starting at some point.

ImCheap

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Re: $500,000 found me, now what?
« Reply #46 on: November 08, 2016, 07:59:11 AM »
3.5% has never failed in history of the us stock market ... so waiting for a 3% SWR is utterly absurd IMO.

1.49% spending rate is laughable whats the asset allocation 20/80 stocks/bonds. sorry it was 40% stocks.  i didnt see that part.  no one here is advocating a 4% SWR on 40% stocks closer to 80/20 or higher.

Will have to disagree on the 3.5%, if it turns out to be 3.5%+ great, I just don't see the same world as we had in the past.  For planning even more so for a longer time horizon its the engineer in me, I tend to look at more at a worse case, I use 3% for a 30 year horizon currently, about 10 years ago I did 4%. I know one thing I don't want my wife to go back to work at 85, I will be long gone before that based on family history, luck to make 70.

so why arent you open to what this forum is about ... i'm an engineer ... its numbers.  the first 5-10 years of FIRE will tell you if you need to work more.

If I quit I don't see myself going back work, at least not as an engineer that's for sure. I open to what the forum is about, its not all my cup of tea.

BoonDogle

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Re: $500,000 found me, now what?
« Reply #47 on: November 08, 2016, 09:45:00 AM »
Without knowing all the variables, I voted to work p.t. for a few years to provide a safety margin.  But only if I could set my own schedule and work no more than 2 days a week.  That is my plan anyway so it would just move it up a few years.  I think I would enjoy my job much more at that pace.

Digital Dogma

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Re: $500,000 found me, now what?
« Reply #48 on: November 08, 2016, 10:19:56 AM »
I say leave work ASAP, but also consider using 3-10k to start each of your children a vanguard VTSMX account. Given an account, a little seed money, and an education, you'll have provided more for your children in their life time than you could with a vast sum of inheritance.

elaine amj

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Re: $500,000 found me, now what?
« Reply #49 on: November 08, 2016, 11:14:40 AM »
Which would be more beneficial to your kids? Having you home, not ever stressed out about going to work? All the awesome opportunities you would have to do things and grow and learn as a family? Or a little more money in the bank way in the future? They have time to amass their own fortunes. You only have so long to spend with them and teach them the life skills they need to do so.

I'd retire in a heartbeat and give my kids the gift of my time.

At this point, I'm looking at retiring about when my kids start college. Wish I could do it earlier.