How much is enough?

[ESRBob]

Alan, congratulations -- getting kids through college and settled on their paths in life feels like a huge accomplishment to one on the uphill side (with two sons, 12 and 16 years old). And sweating through a BSc in computer science would probably push any normal person into trauma territory...

Mead -- I noticed your photograph of Audrey Hepburn, probably from Sabrina? Last night I attended a fundraiser in the home where Sabrina was filmed back in the 1950s -- it was stunning. My buddies and I sat on their dock (without champagne glasses in our back pockets, but with martini glasses firmly in hand) and guesstimated the taxes on that particular piece of waterfront property, coming up with something north of $125,000. The person living there is ER, too... so I guess an ER budget does depend somewhat on lifestyle!

 

[Alan]

Thanks Bob. I wish you all the best with your 2. Our daughter got married while in college as well so that was another major expense out of the way. (6 years ago).

 

[garrynky]

To me this poll would have meaningful results if it were broken down by age. If I'm 25 and looking at retirement, 5M looks good. If I'm 61, less than a M looks ok. This poll doesn't tell me much.

 

[novaman]

To me this poll would have meaningful results if it were broken down by age. If I'm 25 and looking at retirement, 5M looks good. If I'm 61, less than a M looks ok. This poll doesn't tell me much.

Yeah, there are MANY factors that would influence the target number, but I thought this would at least give a nice starting point to look at what most people are aiming for.

One thing that stands out is that less than 15% of those polled are looking at more than 3 million for FIRE. I was expecting a higher percentage. My perspective is probably skewed because I live in such an expensive area.

 

[Spanky]

To me this poll would have meaningful results if it were broken down by age. If I'm 25 and looking at retirement, 5M looks good. If I'm 61, less than a M looks ok. This poll doesn't tell me much.

Another way to look at it is that imagine that you want retire now, how much money invested in a 60/40 portfolio will be needed.

 

[Spanky]

I'm hoping they will understand the value of money whether or not I help them, by leading a fiscally responsible lifestyle. My parents helped me out and made that period in my life much easier, which helped me become successful, so I'd like to offer the same opportunity for my kids if necessary.

I would not have relied on the government and mega-corp if my parents had helped to pay for any of my college education. Anyway, I applaud your intention to support their education, and they will definitely appreciate it. I will be paying my daughter's college expenses in September. However, I am not sure that I will do the same for grad schools.

 

[Enuff2Eat]

who cares...

not a good poll. as long as you happy 1/2 million is good enuff. 5 million doesn't do anything when you are miserable.



enuff

 

[kaudrey]

nova - I live in "nova" too, and I don't expect to need over $2M. My expenses now are less than $60K. Granted, I own a townhouse and not a house, and I don't have any kids to pay for, which may again further skew my spending...but I plan to have the mortgage paid off before I retire, lowering my expenses even further.

Everyone's situation is different. For me, it's not that difficult, it's just a matter of lifestyle choice, even though I choose to live in an expensive town.

 

[FinanceDude]

I set $2 million as the number when I got married 12 years ago, and although $2million's not as much as it was, I think with NO debt and $2 million investable, we'll be ok.............

 

[bright eyed]

I put $2-3 mill cuz by the time i need it - it will be what $1-2 mill was these days...

 

[HobbyDave]

To me this poll would have meaningful results if it were broken down by age. If I'm 25 and looking at retirement, 5M looks good. If I'm 61, less than a M looks ok. This poll doesn't tell me much.

If you were 25 with 1M, you don't think you could retire? If you take 3% of 1M, you can pull off 30k per year. You can certainly live on that, and I think 3% off a portfolio can last 60 years.

I'm 29, and I'm aiming for a bit over 1M, which I hope to hit in about 10 years. It will be something around 30-35k I'm hoping to pull off the account yearly, which should be enough to maintain a frugal life sailing / hiking / etc. If we decide in the next 10 years that we'd like to do more upscale traveling (or who knows what else will happen), we'll adjust along the way.

 

[HobbyDave]

I voted $3-4 million because I will have NO pension.

The way you say this makes me think that you assume that people who choose $1M have a pension? Many of us don't have any pensions (I know I won't have one), yet we're still aiming for about 1M. 1M for a 50-60 year old can throw off 35-40k per year. That's not too shabby.

So just to nitpick, if you're voting 3-4M, it's not because you have NO pension, it's because you are choosing a lifestyle which requires $105k-$140k per year.

 

[megacorp-firee]

So just to nitpick, if you're voting 3-4M, it's not because you have NO pension, it's because you are choosing a lifestyle which requires $105k-$140k per year.

Not a bad choice ... if you can make it happen...

 

[JustCurious]

I plan on withdrawing up to $240,000 per year. Of course that's 20 years from now.

 

[Spanky]

$240K - That's about $132,882 today.

 

[Tadpole]

My goal is $1.5 million minimum or 25 times our projected expenses ($60K a year).

I participate but don't fully appreciate these polls about savings goals. What perplexes me is that I may set a goal, say $1.5 million. So, as I approach that goal do I think I am close or do I think I may be one year from a 30% drop in a downturn so I need a 30% buffer? If you are $1 short, can you retire? If you are $100,000 short, can you retire? If you are $500,000 short? etc. It seems to me that "goal" risk is something similar to "inflation" risk, which I have factored into my savings goals to make up for pension increases that lag inflation, or tried to factor in. And, yes, past market performance says it straightens itself out in the end, but, a three year downturn could severely reduce the principle.

 

[Spanky]

I participate but don't fully appreciate these polls about savings goals. What perplexes me is that I may set a goal, say $1.5 million. So, as I approach that goal do I think I am close or do I think I may be one year from a 30% drop in a downturn so I need a 30% buffer? If you are $1 short, can you retire? If you are $100,000 short, can you retire? If you are $500,000 short? etc. It seems to me that "goal" risk is something similar to "inflation" risk, which I have factored into my savings goals to make up for pension increases that lag inflation, or tried to factor in. And, yes, past market performance says it straightens itself out in the end, but, a three year downturn could severely reduce the principle.

A cash buffer for x years of expenses and your pension should be able to cushion a prolonged market decline. We have to make some reasonable assumptions (i.e., risks, economy, market returns, expenses, health., etc) to determine whether we have enough to RE. If we keep predicting the worst scenarios, such as a global market downturn or recession for the next 100 years or the government or mega-corps default all their pension or social security obligations, we will never be able to RE.

 

[tryan]

do I think I am close or do I think I may be one year from a 30% drop in a downturn so I need a 30% buffer? If you are $1 short, can you retire? If you are $100,000 short, can you retire? If you are $500,000 short?

No need to get wrapped around the axel ... 4% withdrawls are 100% safe.

 

[retire@40]

I participate but don't fully appreciate these polls about savings goals. What perplexes me is that I may set a goal, say $1.5 million. So, as I approach that goal do I think I am close or do I think I may be one year from a 30% drop in a downturn so I need a 30% buffer? If you are $1 short, can you retire? If you are $100,000 short, can you retire? If you are $500,000 short? etc. It seems to me that "goal" risk is something similar to "inflation" risk, which I have factored into my savings goals to make up for pension increases that lag inflation, or tried to factor in. And, yes, past market performance says it straightens itself out in the end, but, a three year downturn could severely reduce the principle.

Then maybe your plan should be to semi-retire for 3 years after you think you are FI. That should satisfy your risk tolerance. If you did save enough, you've got some extra fun money to spend. If you didn't, you can ramp it to full-time again.

 

[Meadbh]

The way you say this makes me think that you assume that people who choose $1M have a pension? Many of us don't have any pensions (I know I won't have one), yet we're still aiming for about 1M. 1M for a 50-60 year old can throw off 35-40k per year. That's not too shabby.

So just to nitpick, if you're voting 3-4M, it's not because you have NO pension, it's because you are choosing a lifestyle which requires $105k-$140k per year.

First, all my calculations are in Canadian dollars (currently approaching par with US$, but that's unusual). Second, I am calculating based on $60-75K in today's dollars, and allowing for inflation. Third, I currently have a very tax efficient financial structure and expect to pay more, not less, tax during retirement. Fourth, I plan to move after ER, to an area with higher property costs. Fifth, I do not have kids who will look after me so I need to self insure for LTC.

OK?

 

[aenlighten]

It's never enough until it must be

I would have planned for more, simply to live more, but can live comfortably on much less. Ideally 35-45x expenses, because I am not satisfied with a constant standard of living, I want to grow rich in retirement.

 

[blade3colorado]

Poll may not apply to those with pensions . . . Working for the Federal Government (CSRS retiree), I'll receive 57k a year with COLA, if my early retirement goes through this year (age 52 with 32 years of civil service). However, if I stuck it out until age 55 (AAAAAAAAARRRRRGGGGHHHH), then it will probably be approx. 67-70k. I also have approximately 475k in stocks, cash, and home equity. In effect, I would be in big, big trouble without my pension and probably would not be able to retire this century . . . grin.

 

[Alex]

My number is $2.5 Million or age 50 - whichever comes first.O0

 

[skyline]

I thought my number was $2M (no pension, not counting RE equity), but when I hit it, I did some soul-searching and realized I was more risk-adverse than I thought, so I revised it to $2.5M. Hopefully when I hit that target (projecting sometime next year), I won't suddenly decide the new number is $3M!

 

[dm]

My number is 50. I just turned 50 and I have $400,000. Of coarse the $53,000 Cola pension helps. The wife is also going to work one more year full time and plans to teach a class or two at the local college for a while for an additional $13,000 to $26,000, this is for 4 to 8 hrs a week and summers off.

Maybe I have lots of numbers. I'm just ready to go and I'll make it work out with what I have. I'm working 28 hours a week and I have 15 weeks to go. We need about $70,000 to cover what we spend now but it would not be to difficult to cut that back alittle if we choose to. We have no debt and no budget.