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View Poll Results: What is your "Magic Number" to "Income at Retirement" ratio (see explaination)?
9 or less 15 15.15%
10-14 21 21.21%
15-19 11 11.11%
20-24 19 19.19%
25-29 24 24.24%
30-34 5 5.05%
35 or more 4 4.04%
Voters: 99. You may not vote on this poll

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Re: Magic Number to Income at Retirement Ratio
Old 04-03-2007, 03:14 PM   #21
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Re: Magic Number to Income at Retirement Ratio

Mine is around 6, which I suppose is why I think I have a pretty good chance of retiring in 10 years. My wife and I aren't all that LBYM (we generally buy whatever we want), but we still manage to save a decent amount. We both make around 90k (180k gross), but are planning on retiring once we hit 1M.

I've always assumed we'd change our lifestyle once we retired, which is how our number became so low. We both enjoy the outdoors, we have families from the woods of Wisconsin & Michigan, so we figure that's the type of place we could retire to. One car, fewer restaurants, lower computer costs, lower housing costs, etc, I believe it all adds up.

If we're really wanting more money, we can always look into ways to add to our income without being in high stress corporate jobs. Plus, I figure if it's a choice between buying that new computer (and finding a job to pay for it), or just sticking with my slow older one, it'd be an easy choice
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Re: Magic Number to Income at Retirement Ratio
Old 04-03-2007, 03:55 PM   #22
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Re: Magic Number to Income at Retirement Ratio

Since we currently spend only about 30% of our gross income, we could retire with a 4% SWR on about 7.5 times our current income and not change our standard of living a bit. Of course, we don't yet actually have 7.5 times our current income, but we are gaining fast. And I think we will probably economize a little more when we don't have a regular paycheck coming in, so the ratio could be lower.
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Re: Magic Number to Income at Retirement Ratio
Old 04-03-2007, 04:05 PM   #23
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Re: Magic Number to Income at Retirement Ratio

Quote:

Anyone shooting for that SWR wouldn't retire until the # was 25, right?
Only if you want to spend MORE than you do working.

Taxes ate a 1/3 of our gross ... now we're in the 15% bracket. Used to save 25% .. now nothing (no need). If your mortgage is paid off add that to the pile. You get the point ...
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Re: Magic Number to Income at Retirement Ratio
Old 04-10-2007, 12:10 AM   #24
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Re: Magic Number to Income at Retirement Ratio

LBYM has multiple benefits:
You can test drive your retirement lifestyle before you leave your job.
With lower expenses, you need a smaller nest egg.
My pension was a pay-raise, since we were saving so much prior to retirement (mandatory overtime means you don't have time to spend it).
When your average annual investment income catches up to your expenses, pick a retirement date.
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Re: Magic Number to Income at Retirement Ratio
Old 04-10-2007, 05:20 AM   #25
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Re: Magic Number to Income at Retirement Ratio

Quote:
Originally Posted by heyyou
LBYM has multiple benefits:
We need a LBYM poll, especially considering the rule of thumb is that you'll need
80-90% of your current income. I wonder if/how they treat taxes with those rule
of thumbs?
TJ
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