What was your "safe" number?

[Car-Guy]

Did others have a "safe" number, that once they go there, you just knew you were going to be ok no matter what?

I don't think there is a safe number for "no matter what". But assuming no apocalyptic events and/or total economic collapse, and assuming normal inflation rates, then my safe number was when I realized I had saved enough to live in the lifestyle I wanted without having to invest my money in "what I consider" higher risk investments to maintain that lifestyle. While, I do invest in the markets, precious metals and collectables, it's with money that I can afford to lose. Most of my money is in fixed income assets backed by the FDIC spread out to stay below the insurance limits. Sure there's still risk of hyper-inflation and/or total economic collapse but that's how I got to my safe number.

 

[Cobra9777]

I distinctly remember in my late 30s when the 401K hit $400K. Our total NW at the time was probably around $500-600K. I remember thinking, "This thing might actually work out." I'm not sure if that's what the OP meant by "safe number." But it was a motivational milestone that re-ignited my commitment to FIRE. There were many more milestones after that. I'm not sure why that one stuck in my head. But after that point, there seemed to be an unstoppable momentum that didn't exist before.

 

[NW-Bound]

... after that point, there seemed to be an unstoppable momentum that didn't exist before.

Yes.

For me, the unstoppable momentum was called the bull market of 1983-2000.

 

[karluk]

There must be a number when you get over it, further saving is about wealth, not necessities.

That is an interesting comment because it accurately reflects my thinking when I first started thinking seriously about retirement. The very first spreadsheet I did was with an investment portfolio worth $630k. At the time it was possible to invest in long term bond funds yielding 6%, and with 3% annual inflation being a reasonable expectation I felt it was realistic to project 3% inflation adjusted returns.

That was, of course, a very primitive calculation compared with some of the sophisticated planning I see from others on this forum, but it convinced me that $630k in investments, plus my expected pension and SS, was enough to retire on immediately, if I so desired. Any amount above that was for luxuries. And that's how I managed my investments for a number of years. I invested $630k in a bond heavy portfolio that happened to have similar allocations to what Vanguard's Retirement Income fund has today. Any new money went into a much more aggressive portfolio that was almost 100% stocks. I didn't use your term "safe number", but I guess that's close to what I was thinking. So I had the rather odd safe number of $630k. It would be higher today, since I would adjust it upwards each year based on the change in CPI from the previous year.

 

[mrfeh]

35x annual expenses. I want to keep our average withdrawals under 3% for a 40 year retirement.

We got there earlier this year.

 

[Refresher]

I think the tax status of the safe number makes a difference. The OPs 500k in a 401k would be very different than the same amount in an after tax account. Especially in an income tax state.



Sent from my iPad using Early Retirement Forum

 

[NW-Bound]

Something that one could live off at WR of about 2.0%-2.2%.

Since that kind of WR is quite safe....

And it also depends on how one lives. Where's MasterBlaster and his suggestive illustrations when we need him?

 

[Andre1969]

Congratulations on getting to $500K at such a young age. Also, depending on how the market cooperates, you might get to $1M a lot faster than you think. I think I first broke the $500k mark in early 2010, just before turning 40. I briefly popped the $1M mark for about a month over the summer, so in my case, it took a bit over 4 years. Haven't added it up lately, but I think I'm down to around $940-950K now, after the market turmoil we've been having.

As for that "safe point", I think I'm there, more or less right now. If I lost my j*b, I wouldn't be in a big hurry to get another. And if the economy took a downturn, I'd probably be okay just getting some kind of part time job to get me through the rough patches.

 

[DAYDREAMER]

My safe number must be able to yield 3k/month to pay for my living expense. Right now, the $ number isn't the issue, its my age. I need to reach age 55 to be able to qualify for early retirement pension and access my 401k with no penalty. There's plenty of money sitting in 401k, just no way to get at it without uncle same taking 1/2.

Once DW and I reach age 55, we will qualify for $3500 in pension (combined/pretax) which solves the living expense issue. Also will have access to our 401k, projected to be approx 1.5 mil, and no mortgage. I'm handcuffed by age.

 

[NW-Bound]

I see that you are 49. When my DW quit work at 50, I entertained the idea of ER, but it was tough for the same reason you described. Our after-tax stash was not enough to tide us over till 59-1/2 for IRA/401k withdrawal. Plus, our children were still in school. I would need to make SEPP withdrawals, but the rule was too rigid and restrictive.

By me working a few more years longer than my wife, the problem went away. I put my children through college with no loans, built up more after-tax savings, and got closer to that 59-1/2 age to boot. And spending down my stash during the 2008-2009 market would mean sleepless nights.

OMY is not always bad.

 

[Tortoise]

Like others, our safe number is the amount of assets needed to live off for the rest of our lives, using a SWR of around 2.5%. For us, that equates to $2.4 million in investable assets.

 

[lrak]

My retirement plan depends on coasting. My goal is to save aggressively and hit $1.5M in retirement accounts at 47. I'm hoping we have a better market than the first decade of my career ('99-'09) and it will grow on its own. I am going to have to put all my disposable income towards college bills for at least 8 years (and possibly a couple years of loans).

 

[Senator]

That, OTOH, sounds like a pretty extreme belt-and-suspenders approach to me. (Please don't take that personal, Senator.) You'll make your heirs very happy one day.

Nothing personal taken. No real heirs, other than a sister who is older and some neices and a nephew. Maybe I will go the Anna Nicole Smith route... UPDATE: Not the Anna role, the old guy.

 

[RISP]

Maybe I will go the Anna Nicole Smith route... UPDATE: Not the Anna role, the old guy.

That sounds like fun.

 

[jollystomper]

My safe number is $1.5M. Similar to what has been mentioned earlier in the thread, this level gives a 2% withdrawal rate to supplement my pension to meet our planned budget, and will not force us to take SS right away at age 62. Anything above that will let us live a more extravagant life (if we so choose).

 

[bizlady]

25 times planned annual expenses at retirement, including taxes and medical. That, plus a non-cola pension and anticipated social security for both of us (both decent amounts) was our number. This was for a planned 42 year retirement.

 

[NW-Bound]

Nothing personal taken. No real heirs, other than a sister who is older and some neices and a nephew. Maybe I will go the Anna Nicole Smith route... UPDATE: Not the Anna role, the old guy.

That sounds like fun.

No, that's not fun. If that's what you want, should not wait till you are that old and infirm.

 

[Senator]

No, that's not fun. If that's what you want, should not wait till you are that old and infirm.

I better get started right away!

 

[NW-Bound]

All right!

Will you keep us posted, please? I am sure many here want to live vicariously.

 

[robnplunder]

$2M in liquid asset which I am not there yet, and $350k in home equity. But I am willing to take a risk and RE now. Taking risk means 5% WR with Bernicke spending model checked in FireCalc, and willingness to reduce spending if needed.

 

[NYEXPAT]

I used $3 mil when I retired 27 years ago. If I had known about the future divorce, I would have buried it a bit deeper.

 

[Rustic23]

As said in other post, if your 'safe' number is what you can live on with a 4% withdrawal, and you forecast that as your total income, then it is close to a safe number, I would want more. However, have you forecast other downstream income? Or is it those incomes with your 4% of your savings? If so I would definitely want more. Too much dependent of what future income streams will be. The more positive you are about other income streams, i.e. pensions and SS. then the more certain you can be about your 'safe' number. For me $500,000 is my number, and it is what I have now. As I am drawing my 'future' income streams, it is fairly easy for me to calculate total income and expenses.

Caveat: As by tag line says it is after 5:00 and happy hour is in full bloom here.

 

[FIREd]

It's a tough question, as "safety" is such a personal thing. I felt like we secured our basic needs "forever" with a paid-for home and our first million. That was when we lived in a low to average COL area. But in order to secure a great quality of life for our future, we need considerably more.

 

[Asher Aion]

Being involved as a business owner I remember many times thinking that if things went bad in a hurry I could realize $500G cash if assets liquidated. This was in my early 30's. I had the feeling that we could get by with that stash and any low pay j@b and be comfortable.
Fast forward 15 years and I don't want a j@b anymore. Now 35x expenses is my comfort level. Soon this will happen, at least I am planning for it.

 

[NW-Bound]

I have told the story of how I discovered this forum. I never really thought about ER, because I was going to work for a looong time, as I enjoyed what I was doing. It was when I was seriously thinking about ER, and wondered how much I could draw on my stash that I searched the Web for a SWR number, and found this forum and FIRECalc.

Then, the Great Recession of 2008-2009 hit, and I was glad that I was still working part-time, as I was still paying college tuitions and did not have as much after-tax savings. When the recession was past, my children out of college, and I had been tracking expenses with Quicken for a couple of years, it came as a revelation to me that our then expenses were 3.5% WR without college tuition.

Son of a gun! I got my number. So, I quit.