For those that have retired with =>$5M in investable assets

[Animorph]

Quote:

Originally Posted by serie1926 How is your budget working out? Curious to know if you end up with more money at year-end or shortfall? Thanks in advance!

I'm not at $5M, and not sure how that relates to the question.

I am living off only my portfolio for now and the next 9 years or so until SS starts up if things go as planned. My portfolio is allocated for total return and is all equities. The income it generates is incidental, and not enough to cover our spending, so I sell shares as needed to fund our budget.

Given the vagaries of the market, some years I have more than I started with and some years I have less. Our budget is at a constant level, adjusted for inflation, that I hope will avoid depleting the portfolio over the long term. If it looks like the portfolio value is getting unsustainably low, we'll lower the budget to preserve the portfolio. If the portfolio value gets too high, we might increase the budget if we can think of something to spend it on. But that will be over periods of five or ten years. Otherwise, we'll just stick with the budget as is and let the portfolio do what it wants.

As to the budget itself, we're usually below budget unless we add in plenty of travel. No problem sticking with it.

[NW-Bound]

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Originally Posted by NYEXPAT Who budgets? When the Champagne runs out, just order another bottle!

Don't you simply keep a case or two of Dom Perignon in the cellar to avoid running out and losing face when your friends drop by and you tell the cook to prepare an impromptu dinner?

[Walt34]

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Originally Posted by ESRwannabe Retiring on $5 million is pretty rough. I wouldn't recommend it.

It's rough, I tell ya, very rough. We don't get near the proper amount of filet mignon and champagne that we deserve.

[Car-Guy]

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Originally Posted by LOL! People with > $5 million don't need no stinkin' budget.

[Major Tom]

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Originally Posted by ESRwannabe Retiring on $5 million is pretty rough. I wouldn't recommend it.

I was thinking the exact same thing. With my current annual spend of ~17K, that would represent a whopping 0.34% WR. Not that I'm overly conservative or anything, but I'd be nervous about retiring with so little We are a rather cautious lot on this board, you see

[NW-Bound]

Quote:

Originally Posted by Walt34 It's rough, I tell ya, very rough. We don't get near the proper amount of filet mignon and champagne that we deserve.

You don't? I do.

But the trick is I have to buy the entire tenderloin at Costco, then break it up myself, because it's less expensive that way. If only I had more money to hire a cook, then he would have to do that dirty work.

PS. OK, my lunch break is over. Time for me to get back to working on the staircase to install hardwood on it. Darn, $5M does not alleviate me from DIY projects like this.

[Meadbh]

Since I retired with less than $5 million, I guess you don't care for my input.

[Spanky]

Let's supposed that I had $5M, my budget would be $100K (2% SWR). This amount would be twice as much as my current expense. In other words, my budget would be fine.

[Car-Guy]

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Originally Posted by Meadbh Since I retired with less than $5 million, I guess you don't care for my input.

Is that 5 million in US or Canadian dollars?

[Meadbh]

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Originally Posted by Car-Guy Is that 5 million in US or Canadian dollars?

Either.

[NW-Bound]

Quote:

Originally Posted by Walt34 It's rough, I tell ya, very rough. We don't get near the proper amount of filet mignon and champagne that we deserve.

Quote:

Originally Posted by NW-Bound You don't? I do. But the trick is I have to buy the entire tenderloin at Costco, then break it up myself, because it's less expensive that way. If only I had more money to hire a cook, then he would have to do that dirty work. PS. OK, my lunch break is over. Time for me to get back to working on the stair case to install hardwood on it. Darn, $5M does not alleviate me from DIY projects like this.

OK, I just dropped my tools to get back to the PC. I need to share with y'all, the multi-millionaires who are still filet mignon deprived, the following video showing how you can eat tenderloin until it comes out of your ears.

This episode of "Good Eats: Tender is the Loin" is easily 10 years old, but the technique is timeless. Skip to around 3:00 to see how to buy an entire loin at Costco and cut it up yourself.

You do not live near a Costco? Heck, what kind of millionaire are you? There are Costco everywhere.

https://www.youtube.com/watch?v=Un5lrlF_vHk

[ERD50]

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Originally Posted by dallas27 Not sure what 5 million watermark would have to do with budget hitting. ...

Agreed - odd post, IMO.

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Originally Posted by NYEXPAT Who budgets? When the Champagne runs out, just order another bottle!

Reminds me of that commercial, forget the product, but they were making the point that you can save money with them, by focusing on some super-wealthy people who don't need to save money.

In one, the Mom and her daughter are randomly bidding on some art at an auction, the daughter says "Daddy always said, money doesn't spend itself!" ( Some LBYM'-ers here might have just had a heart attack!).

In another one, the announcer says to the rich person, "if you save money with us, you'll have money for other stuff", the rich guy answers "But we already have other stuff". In that one, I think they actually take a limo from one private jet on the tarmac to their other private jet about 100' away.

-ERD50

[Danmar]

Inappropriate (or poorly worded) question from inexpetienced member. I would have thought ignoring it the best response? Certainly better than sarcasm.

[petershk]

Well just to play devil's advocate. Let's say youre 30 and live in social.

5m at 2% is 100k.
That's 8300/mo.
Almost impossible to find a house in a non high crime area in the LA region for under a million. So that's about 4500/mo. I'm talking 2000 sqft with a 5500 sqft yard in an ok neighbourhood .

So that leaves 4k.
Take 1k for health insurance.
Take 500 for food.
500 for bills.
Maybe 500 for taxes.
And 500 for fun stuff.

That leaves about 1k/month for buffer which is pretty good but you're not renting private jets or even flying first class more than once a year .

Now take that same amount and move to south Carolina where you can buy a better house in a similar neighbourhood for 800/mo.

Sent from my HTC One_M8 using Early Retirement Forum mobile app

[audreyh1]

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Originally Posted by Danmar Inappropriate (or poorly worded) question from inexpetienced member. I would have thought ignoring it the best response? Certainly better than sarcasm.

On this forum? LOL!

[audreyh1]

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Originally Posted by RunningBum Maybe you'd like to expand on why you are asking only those with $5M or more?

Maybe that's what they anticipate retiring with. So they are only interested in the high flyer budgets?

[Danmar]

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Originally Posted by audreyh1 On this forum? LOL!

Is that a little more sarcasm?

[Big_Hitter]

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Originally Posted by audreyh1 Maybe that's what they anticipate retiring with. So they are only interested in the high flyer budgets?

what's if it's $5M in 2040?

[rodi]

Quote:

Originally Posted by serie1926 How is your budget working out? Curious to know if you end up with more money at year-end or shortfall? Thanks in advance!

I presume you picked => $5M in order to illicit comments from those with larger annual budgets.
But that's not really the point. The budget should be proportional to the nest egg... So someone with $1M might have a 1/5th the budget. Or might have more - because the >$5M person might be 30yo - and need to have a smaller WR - and the person with the $1M might be 70yo, so comfortable taking 4% or higher as a WR. Or the $1M person might have a large pension to augment withdrawals.

In other words - it's an interesting question but really doesn't have enough info to garner any useful results.

I suspect that's why people started making jokes.

[hnzw_rui]

Quote:

Originally Posted by petershk Well just to play devil's advocate. Let's say youre 30 and live in socal. 5m at 2% is 100k. That's 8300/mo. Almost impossible to find a house in a non high crime area in the LA region for under a million. So that's about 4500/mo. I'm talking 2000 sqft with a 5500 sqft yard in an ok neighbourhood . So that leaves 4k. Take 1k for health insurance. Take 500 for food. 500 for bills. Maybe 500 for taxes. And 500 for fun stuff. That leaves about 1k/month for buffer which is pretty good but you're not renting private jets or even flying first class more than once a year

$500 or $6000 a year for taxes is probably too small even if there's a huge mortgage interest deduction. Otherwise, it is unfortunately true.