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Old 04-19-2015, 11:19 AM   #41
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Retire from what?
They haven't lived yet.
I disagree with the 2nd sentence here. Working at a wage slave job is rarely the same as living an interesting life. Yes - they are young, but that doesn't mean they haven't had experiences both in the workplace and out of the workplace.

Dave Barry had a quote that I always liked: "Don't confuse your career with your life". If the hypothetical couple has a rich life outside of work, why would they want to spend the hours at a boring job.

That said - the $1M gives them a nice cushion to figure out if there is some endeavor that is both interesting and brings in some cash. But if they manage their expenses well, have a realistic frugal lifestyle, and have some paid for shelter (home, RV, boat, whatever...) why not quit the job and LIVE life.

Personally, I like a few things that make my budget slightly less than frugal... I like to travel, I like to have my kids have piano lessons, as well as rec center sports (little league, basketball, etc). I like the occasional splurge for an expensive cooking ingredient (just ordered "fiori di Sicilia" extract off amazon for some cookies I want to make.) Living on $30k/year would be too tight for my *preferred* budget. But if they are happy on $30k/year - why not!!!
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Old 04-19-2015, 11:35 AM   #42
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I wouldn't retire at the age of 30 with $1M, but I say that with the experience of a 45 year old, looking back on where my life went after the age of 30. But, I could see my 30 year old self thinking that, if I had $1M, wild horses couldn't keep me from retiring.


When I turned 30, I had about $60,000 saved up, and was still working two jobs, so fantasizing about having $1M seemed like being on top of the world. But, as time goes by, you discover that the market doesn't always go up, but prices usually do, and accidents and unexpected bills happen, and things don't always work out the way you want them to.


I guess though, if I had managed to save $1M by the time I was 30, I might be tempted to give retirement a try, and if I started burning through the money too quickly, I could always go back to work. It's not hard to do that in your 30's. But in your 40's or 50's, probably not as easy.
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Old 04-19-2015, 11:39 AM   #43
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I think there are a lot of ways to skin the cat. The classic method is to nail the tail to a board and... make sure you have a gigantic pile of money accumulated over a few decades and never work again afterwards. Not the only way. Call it what you like (semi retirement, dropping out, being a bum, following your calling, remaining employed), but for those under 50 it is probably safer to periodically earn some income to supplement whatever assets have been accumulated. Play with firecalc: earning 20k a year one or 2 years out of 3 makes a massive difference in survivability rates with a 4% or higher % draw, or with an extended draw period. When I bailed on the career job in early 2014 I had marginally enough assets to make it work as a completely retire, never work again scenario (although probably not enough to make a lot of forumites comfy). To hedge our bets, DW is maintaining her part time business and I remain open to work on my terms. 8 months after I bailed, it found me. I was able to name my terms and price, and since this is a contract gig it will go away after a year or 15 months. I never would have been able to do that if I stayed on the career job treadmill.
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Old 04-19-2015, 11:50 AM   #44
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OP, if you didn't know the couple personally, then I would say that calling them crazy is way out of line. 4% withdrawal gives decent odds of success; I believe over 80% historically. If excrement hits the fan, then they can adjust. I think a lot of folks get caught up in striving for approximating guaranteed success but life can end so quickly and unexpectedly. Trying to maximize the prime of your life with darn good gambling odds seems the opposite of crazy to me.
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Old 04-19-2015, 11:57 AM   #45
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No way.
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Old 04-19-2015, 12:00 PM   #46
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OP, if you didn't know the couple personally, then I would say that calling them crazy is way out of line. 4% withdrawal gives decent odds of success; I believe over 80% historically. If excrement hits the fan, then they can adjust. I think a lot of folks get caught up in striving for approximating guaranteed success but life can end so quickly and unexpectedly. Trying to maximize the prime of your life with darn good gambling odds seems the opposite of crazy to me.
+1. Doing so while you are still young enough to roll with the punches and being able to get out of the "fog of work" also improves your chances of a successful outcome.
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Old 04-19-2015, 02:01 PM   #47
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I think it is hard to retire with $1M at a relatively early age, especially with kids, count on 4%+ return (assume no sequence of returns risk?), assume life won't throw you any financial curveballs (over 60 years? not likely), not have a lot in SS and pensions income down the road, and plan to 100% retire - never work again until maybe age 100. Downshifting is a lot easier, and it helps if there are two wage earners.

With low expenses, ACA for guaranteed health insurance and tax credits to replace employer subsidized group insurance, it is not too hard to have two tech workers here working part-time or doing contract work and cover middle - upper middle class type annual expenses. More free time also allows for significantly lower annual expenses - DIY around the house, cooking more from scratch, analyzing and lowering energy bills, keeping a price spreadsheet, putting in a permaculture yard that doesn't need mowing or watering, using the library, etc.

If the ACA had been in place we could have easily done this years earlier. We still just keep chipping away at recurring expenses and increasing low risk, passive and semi-passive income like the crossover chart in The Money or Your Life book.

For the people saying no way - do you still have lawns, use the average of 909 kw of electricity a month, not buy mostly single ingredient foods, not shop second hand? There are many ways to save living a less mainstream, less consumer oriented lifestyle. Maybe not everyone would be happy living like this, but some families would rather live more simply than have both parents work and commute 120 hours a week combined. The day care at our local school had to put limits on how many hours kids could be there total time in a week, because some of the kids were either there or at school from 6 am to 6 pm every week day.
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Old 04-19-2015, 02:07 PM   #48
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Hmm. Interesting question...
At age 30 we had 4 sons, and I was earning $14,500/yr. before taxes as a store manager. We owned our house, (with the bank)... and felt we were doing quite well. (The house that we bought for $11,800 recently sold for $281K... Falmouth MA.)

Marriage and children definitely puts a different face on retirement plans, but back to the age 30 bit... Thinking it through, with a what if... If I were age 30 and single... I would definitely consider leaving the working world to explore life in total freedom, and security, 50 years hence, would be the last of my priorities.

No regrets, but tickling the imagination for an enjoyable mental exercise... Wow... Hike the Appalachians, surfing Hawaii, a few weeks in the Boundary Waters, a month in Japan and back to Nikko... skiing the Alps, and bumming my way through Europe... and then living on my boat, sailing the Bahamas, with a trip over to Cuba to bike the Island with my BIL who owns the bike tour business there.

After that, I'd do some of the missionary work with my cousin in S.A. countries, then come back to spend two or three years becoming a 46er in the Adirondaks and spending a summer canoeing the chain of lakes.

Then maybe a summer back near my old home on the vineyard to bike all the roads I missed when I lived there. And at least a week to explore what I never had time to do at the WHOI.

And then I'd go to.... uh oh... getting carried away. Even with all of what I might have missed, wouldn't change the past 50 years for all of that..

Life is good!
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Old 04-19-2015, 02:54 PM   #49
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Depends on one's definition of retirement. If that means, "I will never work again," its not a good idea. If it means, "I will work from time to time when I feel like it and on my own terms," it could very well work out just fine.
+1

I would have loved to take a sabbatical of a few years when we had small children.

But, I wouldn't do it unless I was very confident that I could walk back into a good job when I wanted to. I'd recognize that the time I "wanted" to go back to work might coincide with a time when the economy was in the dumps.
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Old 04-19-2015, 03:54 PM   #50
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If 1 million at thirty, i would continue to work(how i choose) but devote very little to savings and most to enjoyment. And pretty much that is my plan for 40.


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Old 04-19-2015, 04:00 PM   #51
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Even if you qualify for low cost insurance, your out of pocket could still be a cost that is hard to afford... the US system can still be costly as opposed to the Canadian system...
Under 250% of AGI, you get some pretty serious cost sharing limits on silver plans. This means very low or no deductibles, low or no copays, and low out of pocket max. The plans we're looking at for later in 2015 or possibly 2016 are under $1000 for family deductible, $5 copays for PCP and $10 for specialists IIRC, $20-25 for ER copay. Max out of pockets are similarly low.

In other words, we'll pay ~$1000/yr for HI and then almost nothing up to maybe a few thousand worst case. There could obviously be a need to go out of network, if the hundreds of in network doctors can't or won't provide the services you need.

Then again, you get to enjoy early retirement in your 30's, so it's probably worth it if the potential downside is having to pick the 2nd choice cardiologist or whatever when you're 60.
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Old 04-19-2015, 04:07 PM   #52
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In addition to medical expenses there are car repairs, home repairs if you own your home, etc.
The 30-somethings with "$1 million" don't own a home and don't own a car so none of those repair costs will crop up. They rent in some pretty nice places though (apartment in Taiwan where one of them is from, 3 BR house in San Miguel de Allende, etc).

Since I'll be back out mowing the grass in a few days, spreading weed and feed, and then working on our cars (brake pad replacement, oil change, for DW's car then pull the exhaust manifold and cat and replace it on my car), I understand the allure of not owning a house and cars. If only we lived in a place where cars aren't necessary.
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Old 04-19-2015, 04:14 PM   #53
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FUEGO, you will never convince people on here that life is more important than money. They waste 30 years worrying about if they will have enough money for their last 10, and many don't even make it to that point in the first place.
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Old 04-19-2015, 04:41 PM   #54
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Depends on the definition of retiring. If it's like MMM just switching to self-employment on their own terms the answer would be yes.

+1

Like most of the discussions here concerning retirement on $X, the devil is in the details. If retiring at 30 on $1 mil with a 4% WR and adjusting for inflation means literally that (None, not a bit of other resources available, ever) then I'd say no, I wouldn't do it.

If the couple has some other resources in place or coming on line over time such as a part time business or part time work, an inheritance, a trust, whatever, (and these things are frequently not mentioned in our discussions) that might put the situation in a different light.
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Old 04-19-2015, 05:42 PM   #55
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I agree with Youbet. Also yOu never know what is coming down the line health wise. I have had a few good friends have children suddenly develop life threatening diseases & even with insurance they had to pay a fortune out of pocket. Therefore, if one or both had some p.t. work in their field they are keeping current if 1 or both need to return to work f.t. again.
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Old 04-19-2015, 05:52 PM   #56
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For me, personally the answer would be no mainly because once I got off my career track it would be hard to get back on. At the time we pulled the plug we had over double the 1M figure.

But if somebody else wants to do so at age 30 with only 1M, that's fine by me. Everybody's situation is different and they may have more tolerance for a plan B or C.
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Old 04-19-2015, 06:18 PM   #57
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It is not like you could never make adjustments after you retire.
Perhaps buy a bunch of homes and rent them out, this should give enough to live on indefinitely. Or become a Youtube star.

Working a 9 to 5 job means you have no time to seize the opportunities.
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Old 04-19-2015, 06:35 PM   #58
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If 1 million at thirty, i would continue to work(how i choose) but devote very little to savings and most to enjoyment. And pretty much that is my plan for 40.
If I had a million at age 30, I can guarantee it would last the rest of my life. Problem is, that wouldn't have been very long. I grew up late. If at all.
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Old 04-19-2015, 06:52 PM   #59
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How is the ACA not a similar put option for Americans? If your family income is that low, you are not going to pay much of anything for healthcare.
It's certainly more security than prior to the ACA, though as the other poster noted it can be much more expensive. Even in Medicare years the out of pocket costs can be significant.
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Old 04-19-2015, 07:02 PM   #60
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I'm 29 and about 750k away from that $1 million mark. If I had $1 million today, I would probably go find myself a super low stress job in the 30-35k range...and not worry about having to save any of it OR find myself some sort of 6 on 6 off arrangement. Whether it be just working for 6 months and quitting, or finding some sort of seasonal work...that could be nice.

Don't know how that fits in with "normal" people though...and unless you found yourself a partner in your same situation (highly unlikely) you'll likely either be pushed to conform or have a moocher on your hands.
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