Retire on $500k?

[chrisaukcam]

I am inclined to agree with Rushmore. Keep your expenses low. From what I can see $500k is what I will have saved back in about 4 years. Bills will be paid off then and if you use SS + a withdrawal from the $500k, then it should last for a long time. I am figuring on withdrawing $1.5k per month - or less.

[kaudrey]

Quote:

Originally Posted by Tadpole I would imagine that it takes a lot more money to retire a 45 and live to be 80 than it does to retire at 65 and live to be 100.

+1

I was talking to my dad the other day and he mentioned that they spent much less this year and last year than the prior years. My parents are 77, and although my dad is in great health, my mother is not. She can no longer travel comfortably for long distances nor play golf or do other things on which they used to spend money. SS and my dad's small pension covered their expenses, which certainly wasn't true when they first FIRED (20 years ago, at 55).

[Sunset]

Quote:

Originally Posted by clifp I think most of the research seems to point to 75K as being the point of diminished marginal utility. I don't remember the specifics is that salary vs spending for a couple or for a family. But in any event, the million plus social security or pension gets you close to the figure. I also agree that $500K is plenty for most people at age 62 or so. I don't think it is enough for somebody in their early fifties or even 555.

The 75k was for happiness of workers, weird part I always found was that CEO's who make millions seemed pretty happy even though it was far above the 75K limit for workers

[Ed_The_Gypsy]

Quote:

Originally Posted by Fermion With a $500k portfolio you will likely pay no federal tax and pay no tax on your SS benefits. This is a pretty big deal.

BEWARE! This is an unsupportable generalization.

Similar to my situation and I ran the numbers. I will have a high SS benefit. If I leave the assets in my TIRA, the MRDs and the Tax Torpedo will hit me hard and the survivor (after one of us dies) even harder.

[Ed_The_Gypsy]

I sure as hell hope one can retire happily on $500k.

Quote:

Granted it's easier if: a) you're not looking at a 40+ year retirement. b) you have pensions OR c) you have low expenses.

We only have a little more $500k now. (We had more three months ago. ) House is paid off. Max SS coming in 3 years. Living in a relatively low-cost-of-living area in a zero income tax state helps. Only $400/mo pension. A 30 year retirement is optimistic but possible. 15-20 more likely.

[imoldernu]

Quote:

Originally Posted by Fermion With a $500k portfolio you will likely pay no federal tax and pay no tax on your SS benefits. This is a pretty big deal. Also, your medical can be very cheap pre Medicare as you should be able to qualify for a subsidized silver plan with cheese (cost sharing). Those two factors alone could make a $35k to $45k income go a long way.

Worked for us. No Income tax in the past 25 years, but came close a few times.

A side note to this, and other long term $$$ factors. Inflation. And even though the calculators incorporate this, a look at the actual numbers helps keep perspective. ie.:
Our retirement year was 1989. $100,000. then, equals $190,500. today.

This does not directly relate to the question about $500K, but knowing the effects of inflation may help in looking at the numbers from the past, and into the future. An example:
$1Million today, with an inflation rate of 5%, would equal $2.65 Million in 20 years.

All of this is meaningless, except that the dictates of the economy over time, are NOT average, but meaningful in the period where inflation or interest rates occur. So...
Over a 20 year span, while the average rate of return might be 5%... if the first five years was 10%, the 20 year total would be higher than if the last five years was 10%. In our case, the earlier years saw higher interest rates and housing inflation.

The second, but unrelated part of this, is that the later years are typically lower in spending, and beyond the "goods accumulation" period.

[dallas27]

As a 36 year old, I just hit 500k savings + a little cash yesterday (and back down today). Very excited about that number, believe me. But @3.5% withdrawal, we are talking $17,500 a year.

Could I quit working, jump on ACA subsidy, downsize the house, and quit working? Yes. Would I enjoy it that life or feel safe during a downturn? Probably not.

As others have said, it's a different story to retire on $500 + SS or Pension. But just the 500k, it would be pretty frugal.

[jim584672]

The article looks like it is referring to a normal retirement age, so 500k at 65 is very doable. My base expenses are 15k a year. 500k/15k = 33 times expenses. For a frugal type it could be done with 500k.

[ESRwannabe]

My living expenses are roughly $2k a month. Three percent of $500k is $15,000. So I couldn't retire on it, but it would let me ESR.

[OAG]

Quote:

Originally Posted by Ed_The_Gypsy BEWARE! This is an unsupportable generalization. Similar to my situation and I ran the numbers. I will have a high SS benefit. If I leave the assets in my TIRA, the MRDs and the Tax Torpedo will hit me hard and the survivor (after one of us dies) even harder.

We all knew this could happen but usually just live in denial until it becomes reality (the survivor scenario)! DW passed on 12/5/2014 and the financial impact is looming; after trying to deal with the more difficult emotional one.

[REWahoo]

OAG, very sorry for your loss.

[MichaelB]

OAG, deepest condolences for your loss.

[GreenER]

OAG, Sorry for your loss.

[explanade]

Quote:

Originally Posted by Sunset The 75k was for happiness of workers, weird part I always found was that CEO's who make millions seemed pretty happy even though it was far above the 75K limit for workers

OTOH a, I saw a survey which indicated some of the happiest people are in impoverished third world countries so go figure.


Condolences on your loss, OAG.

[Evergreen]

I'm in the UK where things are more expensive than the US, I'm 52, property paid for (value about $600,000), savings of about $350,000 and pension if I take it next year worth about $40,000pa so by my calculations I could bail out in the summer. London is expensive but I could manage.

[Ed_The_Gypsy]

Quote:

Originally Posted by OAG We all knew this could happen but usually just live in denial until it becomes reality (the survivor scenario)! DW passed on 12/5/2014 and the financial impact is looming; after trying to deal with the more difficult emotional one.

Understood.

I am sad for your loss.

[Calico]

OAG,

Deepest condolences on your loss. I hope you have a supportive group of folks (family, friends, church or other community) available to help you through this difficult time.

[haha]

OAG, my heart goes out to you. Good luck as you make your way after this loss.

Ha

[Live And Learn]

OAG, my sincere condolences on your loss. Please reach out to others as you go through your grief even if it's not something you would normally do.

[NW-Bound]

My condolences, OAG. It's hard to lose a lifelong mate of 50 years. We have 35 years and counting.