Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 03-09-2015, 08:57 PM   #21
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,128
Quote:
Originally Posted by ready View Post
Even at 3% swr that is only $75k per year, which is far too low for me to live on in Southern California.
fify
__________________

__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-10-2015, 12:32 AM   #22
Recycles dryer sheets
 
Join Date: May 2013
Posts: 119
Quote:
Originally Posted by Walt34 View Post
In the news industry the companies are trying to cut way down on employees and use freelancers as much as possible. So now you have all these formerly employed writers who are desperate to come up with something - anything! - that they can sell and pay for tomorrow's dinner.

They're doing the same thing with photographers - that was clear when National Geographic let go it's last full time photographer. It's also why your local news station is so eager to have you "share" your photos - for free of course - of the latest big wreck on the interstate. That way they won't have to pay a photographer to get the images.

Or generated by an algorithm: http://mobile.nytimes.com/2015/03/08...even-know.html
__________________

__________________
Fred123 is offline  
Old 03-10-2015, 06:06 AM   #23
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,240
I saw no mention of other sources of income. If two professional folks retire together, have pensions and (at least eventually) have SS, they might well knock down $100k/year without saving a dime. Now, for many of us, that $100k might be more like $20K to $60k, depending upon work history and other factors. Most folks, spending no more than $100k can get by on much less than a $2.5 mil nut (assuming the usual other sources of income.) Still, if you DID have $2.5 mil in your stash, it could be lots of fun. YMMV
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline  
Old 03-10-2015, 08:00 AM   #24
Recycles dryer sheets
MikeWillRetire's Avatar
 
Join Date: Apr 2012
Posts: 162
If I wanted to retire at age 35, I would have wanted $2.5 million.
If I retire at age 62, then I won't need anything because of my pension and social security.
__________________
MikeWillRetire is offline  
Old 03-10-2015, 09:22 AM   #25
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,092
2.5M seems pretty ample; but as everyone pointed out, there are a lot more factors to consider
__________________
Swing hard, look up
Big_Hitter is offline  
Old 03-10-2015, 09:37 AM   #26
Full time employment: Posting here.
Birdie Num Nums's Avatar
 
Join Date: Mar 2010
Location: Seattle-ish
Posts: 776
Quote:
Originally Posted by Big_Hitter View Post
2.5M seems pretty ample; but as everyone pointed out, there are a lot more factors to consider
And is that $2.5M per person or per couple? Because some of the earlier posts above refer to "us" while others concern the poster alone.
__________________
Birdie Num Nums is offline  
Old 03-10-2015, 09:41 AM   #27
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,092
I think 2.5M would be ample for "us" - not counting DB/SS income.


I will acknowledge that blanket statements like these are pretty silly, as everyone has a different story/situation.
__________________
Swing hard, look up
Big_Hitter is offline  
Old 03-10-2015, 09:44 AM   #28
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 634
Quote:
Originally Posted by Jack_Pine View Post
Of course it depends on spending and duration among other things but as a general target for the general public I don't think it's a bad number. At least it's a conversation starter.

Our target number is a little over that. First few years will be at 4% SWR for a few years and then down to a right around 2. We feel pretty good and will adjust spending as needed.
I think it's an insanely high number that is obviously targeted to high cost of living areas and/or people already used to living high on the hog. And it completely ignores the impact of SS, any available pensions etc.

Way too high.
__________________
GTFan is offline  
Old 03-10-2015, 09:48 AM   #29
Full time employment: Posting here.
GTFan's Avatar
 
Join Date: Apr 2013
Location: Atlanta
Posts: 634
Quote:
Originally Posted by youbet View Post
+1

While I admire the folks able to have a joyful retirement on less than $20k (for a couple), that's not us. $75k is more like it and if you don't have a pension or substantial SS, it takes 2.5 mil to count on that amount, inflation adjusted, over the long haul.

The article is just stating the obvious.
The mind boggles at needing to spend $75k a year, but obviously I'm not used to such largesse.

For those saying they have to have that amount because of where they live, the answer is obvious.
__________________
GTFan is offline  
Old 03-10-2015, 09:49 AM   #30
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,092
Quote:
Originally Posted by GTFan View Post
I think it's an insanely high number that is obviously targeted to high cost of living areas and/or people already used to living high on the hog. And it completely ignores the impact of SS, any available pensions etc.

Way too high.
completely depends on one's standard of living, even in low cost of living areas like BFE Texas, for example

if you FIRED at 55, had a mortgage, travelled and hung out at your country club every day (when not travelling) I don't think it's an insanely high number
__________________
Swing hard, look up
Big_Hitter is offline  
Old 03-10-2015, 10:46 AM   #31
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 406
As mentioned there are too many variables...just like (I suspect at least) when someone says they don't need millions to retire (because they have a pension or they have a stream of income that is pretty stable like real estate). If you don't have a pension and don't count on SS as a venue sources (either because you are concerned over long term viability or because you didn't work as much and therefore won't get as much) the number for 100% safe (or as close as possible) ER needs to be a lot larger than others for a long retirement.

But the one size fits all implied in that article is also not correct. IIRC Mr MoneyMoustache is retired on $600K with a family (though I suspect that there is some income from the blog/website). He also does a lot of things that not everyone could (or would want to) do
__________________
If money is the root of all evil I want to be a bad man
nuke_diver is offline  
Old 03-10-2015, 11:00 AM   #32
Full time employment: Posting here.
 
Join Date: Nov 2008
Posts: 728
So much depends on your lifestyle prior to retirement. If you've been successful and have an expensive home, you need more in retirement. If you've been used to flying 1st class because you're business allowed that, travel will be more expensive. That's why we should look at around 80% of our pre-retirement income instead of a dollar amount that would satisfy all. I suspect someone living a middle class lifestyle in Montana would need less than 1/2 the retirement money than someone living a middle class lifestyle in New York City.

I've always LBYM.......yet, I'll need more than most......why? I've made more than most and my church, kids, grandkids and favorite restaurants would hate to see me cut back since they've depended on my support all these years. I'm lucky, shared my luck and don't want to change my conservative but comfortable life style.
__________________
jerome len is offline  
Old 03-10-2015, 12:19 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
As others have said, there are too many variables for a one-size-fits-all approach. Your age, location, number of dependents, lifestyle, SS/pensions, etc, all factor in here.

Now in my case, if I had amassed $2.5M, I'd be putting in my 2 week notice right now! FireCalc says that, at the 95% success level, I could live off of about $92K per year, assuming no SS. When I factor in SS (~$13K per year starting at age 62 in 2032), I can bump it up a bit to $97K.

$92-97K, even taking taxes into account, would be a nice lifestyle bump for me. To put it in perspective I'm almost 45, single, live in Maryland just east of DC, and don't really live an extravagant life. So for me it would be like hitting the lottery. But to others, having to live off of $92-97K per year could represent a severe hardship.
__________________
Andre1969 is offline  
Old 03-10-2015, 12:32 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,812
Let's remember two things:

On another thread, we learned that only 10% of households ages 65-74 have $1.0 million.
Presumably, most of these people are retired, so the other 90% have found some way to live in retirement without 7 figure net worth.

The average age of respondents to this survey was 58. They averaged $400,000 in retirement accounts (maybe just 401k?). Somehow, I expect that most of them are not going to get to $2.5 million by 65.
__________________
Independent is offline  
Old 03-10-2015, 01:24 PM   #35
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
No You do not need 2.5 Million if you plan to retire at age 65, collect SS and have Medicare.

But retiring at 50 when you do not collect SS and you have to buy medical insurance is different story.

2.5 million is not enough IMO unless you have some nice pension like O-5 from US Army .
__________________
eta2020 is offline  
Old 03-10-2015, 01:37 PM   #36
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,045
A 2.5 million immediate annuity pays $10,425 per month for a 50 yo male.
I don't see how this would not be enough, then again I am a "frugal" type.

I am not recommending annuities, just using it as an example.
__________________
jim584672 is offline  
Old 03-10-2015, 02:01 PM   #37
Recycles dryer sheets
Focus's Avatar
 
Join Date: Oct 2009
Posts: 471
Quote:
Originally Posted by Birdie Num Nums View Post
And is that $2.5M per person or per couple? Because some of the earlier posts above refer to "us" while others concern the poster alone.
Ding ding ding! Articles on this topic are usually vague about this very crucial point. Makes a world of difference.
__________________
-
"Wealth consists not in having great possessions, but in having few wants."
--Epictetus
Focus is offline  
Old 03-10-2015, 02:25 PM   #38
Recycles dryer sheets
Retch The Grate's Avatar
 
Join Date: Jul 2010
Location: Mountain View
Posts: 252
That's my target number for a 4% withdrawal rate, assuming Social Security is still there as a backup longevity insurance when I retire and my folks end up passing along some money (which I don't want, I'd prefer they live indefinitely but...), otherwise I go with a 3% withdrawal rate and need $3.333 million to feel like I will be at my retirement number...
__________________
Retch The Grate is offline  
Old 03-10-2015, 02:41 PM   #39
Thinks s/he gets paid by the post
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 2,466
The 2.5 mil caught my eye since that was my magic target number before I retired. That along with being debt free were two of my three main financial goals for retirement. Of course like many here on this board, once I hit my targets, the OMY syndrome set in. (at least twice )

While I was working, I worried a lot more about financials and investing than I do now in retirement. As I have gotten older, and then retired 3 years ago, my investment strategies have become much more conservative and "for me" that has taken away most of my financial worries.
__________________
Car-Guy is offline  
Old 03-10-2015, 05:05 PM   #40
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,802
ready:
I live in So. Cal. I retired on a LOT less than 2.5M in net worth not including real estate.
But I have a paid for house and rental that generates income. I live in an older neighborhood that doesn't have mello roos or HOAs. That cuts my spend. I do spend more than 75K - but I have 2 kids at home still.

jerome len:
While working my gross pay was reduced by
- max 401k contributions - that was a big percentage of my income.
- mortgage payments with extra principal - again, a big percentage of my income.
- extra investment/savings

Those added up to a LOT more than 20%... so the 80% of your previous income doesn't fly for me (and many other LBYM's types.) I was living on a less than 50% of my gross pay prior to retirement after accounting for the above adjustments.
__________________

__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Book - Get A Life: You Don't Need A MILLION to retire well Midpack Life after FIRE 29 05-10-2011 11:57 AM
From 100 million to 4 million rec7 FIRE and Money 19 08-22-2009 12:15 PM
Three Takes on Whether $1 Million Is Enough to Retire sarahsays FIRE and Money 35 06-14-2008 06:23 AM
Article: Worth $4 Million -- and Unable to Retire mickj FIRE and Money 49 10-12-2007 03:01 PM
Retire a Millionaire without a Million Bucks Eagle43 FIRE and Money 14 02-01-2005 11:26 AM

 

 
All times are GMT -6. The time now is 04:27 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.