Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
all you need is ~600K by age 50 to retire
Old 05-28-2017, 09:02 PM   #1
Dryer sheet wannabe
 
Join Date: May 2017
Posts: 16
all you need is ~600K by age 50 to retire

This is for a family of two.

if you can accumulate around 500-600K by age 50, that will help you survive for 17 years till age 67. From 67 you can start taking your full SS benefit; You get your amount (say 2600) and your non-working spouse gets 50% of that (1300) totaling 3900 per month. Since the medicare will take of your healthcare costs, 3900 will be good enough to survive for the rest of your life.

So the absolute minimum you need to save by 50 to retire safely is 600K. For each later year you retire, you can reduce the 600K by 50K / year. Does this sound reasonable? Not saying we can retire with 600K at 50 as it depends on economy and its good to have some buffer, but if we want a number this sounds like the absolute min. needed

- Sam
__________________

__________________
masceratian is offline   Reply With Quote
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 05-28-2017, 09:16 PM   #2
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 1,316
" Does this sound reasonable? "

Ya, assuming this is in the US, if you plan on living in a rented trailer, minimal car expenses , minimal travel and spend down most of that 600K by age 67.

If you moved to south america, that 600K would provide a very nice lifestyle.

Your Mileage May Vary.
__________________

__________________
Lakewood90712 is offline   Reply With Quote
Old 05-28-2017, 09:20 PM   #3
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,101
1. According to FIRECalc, with a $600k starting balance and a 17 year period, you must spend less than $32,376 per year in order to have a 95% chance of success (i.e. - a positive amount in the bank at age 67 when social security kicks in). If you need more than that, your plan won't work because you'll run out of money.
2. The current maximum monthly benefit for social security is $2687 at full retirement age. That would require having paid the maximum social security for 35 years. You are unlikely to have done that if you quit working when you are only 50.
3. Medicare is not free. You need to budget for the Part B expenses.
4. Again, how much do you want to spend?. Roughly $32k per year would not even come close to what I intend to spend in retirement.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 05-28-2017, 09:22 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,150
Not even close to working for me!
__________________
Scuba is offline   Reply With Quote
Old 05-28-2017, 09:56 PM   #5
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,053
Quote:
Originally Posted by Gumby View Post
3. Medicare is not free. You need to budget for the Part B expenses.
Not only is Medicare "not free", a supplemental plan is a really good idea and can add $300/month per spouse.

Then there is Part D (drugs). If you happen to get sick, and maybe have a real "problem", your OOP could be thousands per year.

And if you need glasses, hearing aids, or dental work, this is on your nickle.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 05-28-2017, 09:58 PM   #6
Full time employment: Posting here.
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 677
"that will help you survive"

Who wants to just survive, barely? Sounds like a miserable way to live.
__________________
Aerides is offline   Reply With Quote
Old 05-28-2017, 10:10 PM   #7
Recycles dryer sheets
 
Join Date: Jan 2014
Posts: 243
Most retirees actually live this way so yes you can. Simply depends on what lifestyle you prefer. Nothing wrong with living frugal to gain freedom.
__________________
Turboslacker is offline   Reply With Quote
Old 05-28-2017, 10:20 PM   #8
Dryer sheet wannabe
 
Join Date: May 2017
Posts: 16
Good points on the medicare expenses. I wasn't aware of them.

Assuming a 3.4% pct return, on 600K, you would make about 1700 interest per month and rest of what you need monthly comes from the capital.

So if you spend 3900 per month, it will last for about 16.8 years. I think 3900 is a decent amount to have a comfortable living; rent of a 1 BR apt is 700$-900$ in lot of cities.

If you want to have a more lavish lifestyle that's a different point; we are talking about the absolute min. we need. If you disagree with that number, what is your number?
__________________
masceratian is offline   Reply With Quote
Old 05-28-2017, 10:21 PM   #9
Thinks s/he gets paid by the post
2017ish's Avatar
 
Join Date: Apr 2012
Posts: 1,820
For us, no way. Maybe take it times 10 for age 50. For my mom and siblings, probably? (Assuming they had such a vast sum.)

For you? That's your call.
__________________
OMY * 3 2ish Done 7.28.17
2017ish is offline   Reply With Quote
Old 05-28-2017, 10:23 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,280
Beside the points others have made about heath, drug, vision, hearing aids and dental costs not covered or not fully being covered by Medicare, you can't count on being a couple forever with two SS checks. One will likely pass first and the remaining spouse could live many additional years with only the higher earner SS benefits.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 05-28-2017, 10:37 PM   #11
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 1,316
I think if the OP just gives the 600K to BOHO to manage, they will do ok.
__________________
Lakewood90712 is offline   Reply With Quote
Old 05-28-2017, 10:39 PM   #12
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,053
Quote:
Originally Posted by daylatedollarshort View Post
Beside the points others have made about heath, drug, vision, hearing aids and dental costs not covered or not fully being covered by Medicare, you can't count on being a couple forever with two SS checks. One will likely pass first and the remaining spouse could live many additional years with only the higher earner SS benefits.
How true, and one that faces that existence would be better served figuring out how to get a long stint in a federal prison to cover the expanding expense. You wouldn't even need a car or have to pay insurance expenses then.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 05-28-2017, 10:42 PM   #13
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 1,316
Quote:
Originally Posted by masceratian View Post
Good points on the medicare expenses. I wasn't aware of them.

Assuming a 3.4% pct return, on 600K, you would make about 1700 interest per month and rest of what you need monthly comes from the capital.

So if you spend 3900 per month, it will last for about 16.8 years. I think 3900 is a decent amount to have a comfortable living; rent of a 1 BR apt is 700$-900$ in lot of cities.

If you want to have a more lavish lifestyle that's a different point; we are talking about the absolute min. we need. If you disagree with that number, what is your number?
Need a city and state to do a more in depth s.w.a.g. Aside from rent, general c.o.l. varies a lot by location.
__________________
Lakewood90712 is offline   Reply With Quote
Old 05-28-2017, 10:44 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,280
Quote:
Originally Posted by masceratian View Post
Good points on the medicare expenses. I wasn't aware of them.

Assuming a 3.4% pct return, on 600K, you would make about 1700 interest per month and rest of what you need monthly comes from the capital.

So if you spend 3900 per month, it will last for about 16.8 years. I think 3900 is a decent amount to have a comfortable living; rent of a 1 BR apt is 700$-900$ in lot of cities.

If you want to have a more lavish lifestyle that's a different point; we are talking about the absolute min. we need. If you disagree with that number, what is your number?
I don't know what my minimum number would be because I've never had to test that out as a working adult. But supporting kids in college reminded me that life can be pretty fun without spending a ton of money. Housing is expensive where we live, but I have widowed friends with mortgage free homes and low property taxes under Prop 13 who live well on less than $3,900 a month.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 05-28-2017, 11:05 PM   #15
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
Go where you can find cheap housing, maybe Mexico.
__________________
Fedup is offline   Reply With Quote
Old 05-28-2017, 11:07 PM   #16
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,053
Quote:
Originally Posted by daylatedollarshort View Post
I don't know what my minimum number would be because I've never had to test that out as a working adult. But supporting kids in college reminded me that life can be pretty fun without spending a ton of money. Housing is expensive where we live, but I have widowed friends with mortgage free homes and low property taxes under Prop 13 who live well on less than $3,900 a month.
All of this sounds good and easy to do based on today's situation(s). Life is fun until you and your spouse get sick, and feeble, and maybe need assistance or have very expensive medications. And you WILL get sick and need medical care. Then $3900 a month looks like chump change. Heck one of my 72 year old wife's meds is near $4000/month, but she can only take it for two years. Then there are the 8 or so other prescriptions for her. Maybe we are unusual, but we never planned for any of these expenses.

This year I will spend well over $20K (maybe $35K) on dental expenses to repair old work.....try that on for size. One benefit is we will have a low tax bill this year.

Go ahead, plan out two decades to live on a limited fixed sum. It's not that easy.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 05-28-2017, 11:23 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,280
Quote:
Originally Posted by aja8888 View Post
All of this sounds good and easy to do based on today's situation(s). Life is fun until you and your spouse get sick, and feeble, and maybe need assistance or have very expensive medications. And you WILL get sick and need medical care. Then $3900 a month looks like chump change. Heck one of my 72 year old wife's meds is near $4000/month, but she can only take it for two years. Then there are the 8 or so other prescriptions for her. Maybe we are unusual, but we never planned for any of these expenses.

This year I will spend well over $20K (maybe $35K) on dental expenses to repair old work.....try that on for size. One benefit is we will have a low tax bill this year.

Go ahead, plan out two decades to live on a limited fixed sum. It's not that easy.
I'm not on Medicare so I don't know exactly what our expenses will be or what the max could be. Your amounts seem much higher than the Fidelity estimates of $260K for a couple retiring at 65:

https://www.fidelity.com/about-fidel...etirement-rise

And much more than the mean amounts in the Consumer Expenditure Survey:

https://www.bls.gov/opub/btn/volume-...-americans.htm

"Total annual expenditures averaged $49,279 among older households. Expenditures declined from $56,267 for the 55–64 age group to $36,673 for the 75-and-older group." That's total expenses, including heath care.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 05-28-2017, 11:44 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,405
1993 - 2004. Way less.

But that was then this is now.

heh heh heh - I was such a cheap SOB I even scared 'The Four Yorkshire-men.'
__________________
unclemick is offline   Reply With Quote
Old 05-29-2017, 12:05 AM   #19
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,234
Quote:
Originally Posted by masceratian View Post
This is for a family of two.

if you can accumulate around 500-600K by age 50, that will help you survive for 17 years till age 67. From 67 you can start taking your full SS benefit; You get your amount (say 2600) and your non-working spouse gets 50% of that (1300) totaling 3900 per month. Since the medicare will take of your healthcare costs, 3900 will be good enough to survive for the rest of your life.

So the absolute minimum you need to save by 50 to retire safely is 600K. For each later year you retire, you can reduce the 600K by 50K / year. Does this sound reasonable? Not saying we can retire with 600K at 50 as it depends on economy and its good to have some buffer, but if we want a number this sounds like the absolute min. needed

- Sam
I'm certain there are folks here who live on this amount. My biggest single concern would be health care before MC kicks in at 65.

I know this amount would not cover DW and me in the life style we have chosen. Still, with health care taken care of, we could adapt, though it would cause us to move from where we want to be to a place less desirable to us. YMMV
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Old 05-29-2017, 01:16 AM   #20
Full time employment: Posting here.
Jerry1's Avatar
 
Join Date: Nov 2014
Posts: 515
I'm struggling to find a way to live under $80K per year (about $6,700/month) and I own my home and have some retiree healthcare. Which, by the way, you did not mention health care/health insurance cost from 50-67. I understand people can live on a lot less, but when you ask for a minimum to "exist", you still need to define exist. Existing for me includes good healthcare. I may be wrong, but I imagine that people living on less than $50K/yr suffer when it comes to health care.

If you really think $3,900/month will do it, fill in the rest of the budget. You started with rent but there's a lot more than that. Also, I didn't check all the math, but it would be good to know how you expect to get a consistent 3.4% return. No market risk?
__________________

__________________
Jerry1 is offline   Reply With Quote
Reply


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
Milestone Achieved - 600K Networth atfourty Young Dreamers 8 09-17-2013 05:25 PM
So, do you feel your age? Act your age? Like your age? vickko Life after FIRE 84 04-10-2010 02:47 PM
Wife inherited $600k. questions? bayfritz FIRE and Money 27 01-02-2008 01:05 PM
ER on less than 600K ? ferco FIRE and Money 77 05-30-2006 10:51 AM

 

 
All times are GMT -6. The time now is 03:40 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.