Did Anyone Retire with "Only" .75M$ Saved?

[NW-Bound]

Ummm... If I could get 25%/yr return, I would invest a whole lot more than $25K. I would go borrow money up to my eyebrow to invest.

 

[Andre1969]

Ummm... If I could get 25%/yr return, I would invest a whole lot more than $25K. I would go borrow money up to my eyebrow to invest.

This reminds me of something I had said, as a joke, years ago, but one of my friends thought I was serious, and every once in awhile will throw it back in my face. I managed to see a roughly 40% return, in 1999. I remembered joking that if I could make that return every year, I'd have over $1M by the time I was 40, and be able to retire early!

Of course, I knew I'd never be able to keep up a 40% rate, year after year. In fact, I lost money in 2000, 2001, and 2002. Also, $1M in 2010, the year I'd turn 40, would be worth a lot less than $1M in early 2000, when I made this joke.


Naturally though, when my 40th birthday rolled around, my friend remembered that, and said WHAT, you're STILL W*RKING?!

 

[kgtest]

Naturally though, when my 40th birthday rolled around, my friend remembered that, and said WHAT, you're STILL W*RKING?!

Lol. Yeah, it's always fun to run the "what if" scenarios on market upswings, not as much fun analyzing with about 7 years of negative returns. Of course we all hope that the downturn doesn't happen the year we FIRE!

I'm pumping money into this machine faster than grandma on the nickel slots! Run Bull, run! (Now the markets will tank) trust me

 

[COZICAN]

Here is a simple savings calculator. This was my drive when I first started saving.

https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

 

[Katsmeow]

I agree about the house, technically. For purposes of determining whether one can afford to retire, I wouldn't include it, unless it can produce an income or easily be liquidated to put food on the table.

Of course, you have to consider it because you don't have to pay a mortgage or rent! It significantly impacts your spending. I have a mortgage so that is an expense that someone with a paid off house doesn't have. If you don't have a mortgage and have $750k and I have a $1500 a month mortgage and $750k then if our other expenses are the same you can better afford to retire than I can. The lack of a mortgage absolutely affects the ability to retire. (Of course, you shouldn't double count the mortgage. That is you don't count the mortgage as part of invest able assets since you account for the lack of a mortgage in your spending number).

It really makes a difference if you have either decent pension or SS. I wouldn’t retire on that level of savings only.

I think they have a relatively decent SS. In her original thread she said that

At 68 she will get $2200 SS and husband will get $1800.

 

[NW-Bound]

Of course, you have to consider it because you don't have to pay a mortgage or rent! It significantly impacts your spending. I have a mortgage so that is an expense that someone with a paid off house doesn't have. If you don't have a mortgage and have $750k and I have a $1500 a month mortgage and $750k then if our other expenses are the same you can better afford to retire than I can. The lack of a mortgage absolutely affects the ability to retire. (Of course, you shouldn't double count the mortgage. That is you don't count the mortgage as part of invest able assets since you account for the lack of a mortgage in your spending number).

I think they have a relatively decent SS. In her original thread she said that

At 68 she will get $2200 SS and husband will get $1800.

When seeing the $750K put forth, people tend to immediately think "Oh no, not another 30-something trying to ER on that amount".

They don't read further to see other factors that are pertinent, like the poster's age or their debt-free status, etc...

If everyone needed a few millions to retire in safety, there would be a lot of geezers working until their death. I do not see a lot of them panhandling on the street either.

 

[gwraigty]

Of course, you have to consider it because you don't have to pay a mortgage or rent! It significantly impacts your spending. I have a mortgage so that is an expense that someone with a paid off house doesn't have. If you don't have a mortgage and have $750k and I have a $1500 a month mortgage and $750k then if our other expenses are the same you can better afford to retire than I can. The lack of a mortgage absolutely affects the ability to retire. (Of course, you shouldn't double count the mortgage. That is you don't count the mortgage as part of invest able assets since you account for the lack of a mortgage in your spending number).

You spoke about including the house in net worth. Yes, the value of a house is part of net worth on the asset side, as is the mortgage balance, on the liabilities side, if you're talking about a household balance sheet of sorts. That's only one component of net worth though. You can't eat your house. Unless you're Hansel and Gretel.

An exception: If someone has a $1M house and plans to buy a $300K house in retirement, then you can eat part of the house. I think many people get what I'm saying.

Otherwise, the value of my house is irrelevant to me. I have no mortgage, so that's a big expense I don't have. But I won't include my home's value in any net worth figure to determine if my husband could retire, for example. It's not producing an income. I look at accounts balances and cash flow those account balances produce.

 

[Teacher Terry]

Also I always read the whole post but if I answer a few days later I obviously don’t remember all the details. The joys of aging)

 

[mckittri2000]

Retired at 56 with less than 750K. House and cars paid off and live in the country with low taxes. 2 vacations a year. Pension at 60 and SS at 62. Unless something catastrophic happens we are set for life.

 

[Rushmore]

I retired 10 years ago at 55 with less than that. I have more now than when I retired. House is paid for. I’ve had a little life style creep and spend about 30k a year. Took so @ 62. Travel isn’t my thing and it seems that takes a fair amount of$$. Most of the increase is for services..someone mows my lawn and. Shovels my snow. I’ve paid to have trees and bushes planted. I have chronic back pain and it helps to no longer do those things

 

[trumpeting_angel]

I’m almost 66, so maybe my experience is irrelevant here. I have $850k in assets, some rental property that will provide income in 6 years, a paid-for house
with wood heat in addition to oil and super-insulated.

Firecalc tells me 100% until age 102. I’m very nervous, but I can get work very easily, so I’m finally pulling the plug. (Firecalc and other calculators have been telling me this for a few years, but I kept working part time.). Nervous Nellie.

I’ll admit, Medicare makes a huge difference.

 

[gstillson]

The stuff that more money brings sometimes has a way of increasing your stress.

So you get rich enough to buy a pretty big boat. Now you have to store it and insure it. But wait, you have more liability now, better raise that umbrella policy. Oh, that second home? Have to insure that, worry about keeping up the yard on it...will mice get inside while we are away for 4 months? Got a second car, yay! Wait, have to insure it, pay tabs, keep up with the oil changes.

All you really wanted to do was sit in the park, maybe read a book, take a walk on the nature trail. You had enough for that 10 years ago.

 

[VanWinkle]

Less than 750K, piece of cake if you control expenses, plan ahead for multiple income streams(including a large taxable account to control ACA subsidies) and make sure your spouse is on the same course. Obviously any pension and SS amounts would help to double your portfolio income.

 

[Andre1969]

If everyone needed a few millions to retire in safety, there would be a lot of geezers working until their death. I do not see a lot of them panhandling on the street either.

This might be a bit outdated, but I remember reading that if you have $1M in net worth, that puts you in something like the top 8-10% of the population. So, if you needed that kind of big money to retire, it would stand to reason that only 8-10% of the population will ever retire. Well, okay, slightly more, since the older ages are likely to have more amassed. But still...


Anyway, the most common age to start collecting SS is still 62. And, the majority of people DO retire, eventually. So, that's an indication right there, you don't need millions of $ to do it. Of course, that doesn't mean that everybody who retires has an extravagant retirement.

And, of course, there are other factors, such as SS, pensions, or a spouse who's still working (and will add to the SS/pension, when they do retire)

 

[gstillson]

Honestly I care more about quality than quantity.

If I can get 20 years of retirement while in good health and able to do things then for me that is better than 35 years of retirement where the last 25 are eating jello in a craftmatic adjustable bed.

In order to maximize the chance of 20 good years, the odds say retire early.

 

[MrLoco]

The stuff that more money brings sometimes has a way of increasing your stress.

So you get rich enough to buy a pretty big boat. Now you have to store it and insure it. But wait, you have more liability now, better raise that umbrella policy. Oh, that second home? Have to insure that, worry about keeping up the yard on it...will mice get inside while we are away for 4 months? Got a second car, yay! Wait, have to insure it, pay tabs, keep up with the oil changes.

All you really wanted to do was sit in the park, maybe read a book, take a walk on the nature trail. You had enough for that 10 years ago.

More money gives you more choices. You talk about "stress" from having too much stuff and the possible headaches this could cause.


I feel having too little or retiring with too little in assets is a far worse situation.


HAving too much stuff and you can just get rid of it.


Having too little and you could be in trouble.


REaching the age of 82 and being broke is no fun I am sure.

 

[Rushmore]

Honestly I care more about quality than quantity.

If I can get 20 years of retirement while in good health and able to do things then for me that is better than 35 years of retirement where the last 25 are eating jello in a craftmatic adjustable bed.

In order to maximize the chance of 20 good years, the odds say retire early.

Me too. I have fibromyalgia and chronic fatigue. I also have a degenerative back issue. More money would not help particularly. I was never a high earner and always lived below my means so it seemed important to buy time rather than have more money. I have a small but nice house, clothes I get compliments on, good food friends to do things with. I really can’t think of anything I want that I couldn’t have. It is enough

 

[joeea]

Of course, that doesn't mean that everybody who retires has an extravagant retirement.

People can retire on any amount of assets (including $0), depending on how frugally they are willing to live.

 

[joeea]

In order to maximize the chance of 20 good years, the odds say retire early.

Well, not quite. The way to maximize the chance of 20 good years is to accumulate enough money.

Some can do that and still retire "early". Others cannot.

 

[NW-Bound]

This might be a bit outdated, but I remember reading that if you have $1M in net worth, that puts you in something like the top 8-10% of the population. So, if you needed that kind of big money to retire, it would stand to reason that only 8-10% of the population will ever retire. Well, okay, slightly more, since the older ages are likely to have more amassed. But still...

Yes. A lot of posters here, particularly the vocal ones (like myself), have multi-million net worth. But that's simply not the norm, and a lot of people with less still retire happily. They do have to wait till they are close to early SS age of 62 to pull the plug.

My parents certainly did not have $750K, and they had to wait till 65 to have Medicare and full SS benefit and pension.

 

[Ed B]

Retired last year at 58 with less than $.75m. But I have a pension with survivor benefit and DW is getting SSDI with Medicare so that helps.

My portfolio's job is to bridge the gap between now and when I start SS. Once I start SoSec we get a raise and I can either leave our nest egg alone or use a < 4% withdrawal rate for extra fun money, but it's real job after starting SoSec is providing COLA's.

 

[gstillson]

Well, not quite. The way to maximize the chance of 20 good years is to accumulate enough money.

Some can do that and still retire "early". Others cannot.

Not quite understanding what I am saying.

I am saying that a person might retire at 55 with $750k knowing it would only provide 20 years of retirement and accept the risk that they will mostly be living on SS at age 70 instead of working to age 65 and amassing $1.5M, knowing they will have plenty of money until age 90.

Then at age 75 they have a massive stroke and live the next 15 years bedridden.

Depends if that 10 years that you worked between age 55 and 65 was worth the extra $750,000 that you can now use to pay for in home care for a few years before it runs out.

 

[joeea]

I am saying that a person might retire at 55 with $750k knowing it would only provide 20 years of retirement and accept the risk that they will mostly be living on SS at age 70 instead of working to age 65 and amassing $1.5M, knowing they will have plenty of money until age 90.

If living mostly on SS when you are old is good with you, then you can certainly take that route.

Then at age 75 they have a massive stroke and live the next 15 years bedridden.

Depends if that 10 years that you worked between age 55 and 65 was worth the extra $750,000 that you can now use to pay for in home care for a few years before it runs out.

It's always fun to hypothesize a catastrophe at a magic age that makes our point.

Instead, imagine having a massive stroke at 65 and living bedridden for the rest of your life on only SS when your nest egg runs out. Imagine your younger spouse who took care of you while bedridden also needs to spend the rest of their life living only on SS.

 

[IMATERP]

Retired at 56 with less than 750K. House and cars paid off and live in the country with low taxes. 2 vacations a year. Pension at 60 and SS at 62. Unless something catastrophic happens we are set for life.

Same deal here... Retired two days before my 57th birthday with 800k. House is paid off, bought a new car, and will get a State Pension and FREE Healthcare at age 60, and SS at 62. Our 2nd vacation (of the year) comes in two weeks (London and Amsterdam.)

Here is the real kicker - Wife has a F/T job @ 90k a year and assets close to $500k. In addition, a small State Pension and FREE healthcare are only 2 years out for her.

Oh, then there is the prospect of a sizeable inheritance from aging parents.

And, if all else fails and the economy collapses, I’m just gonna get in line for food stamps.

Hakuta Matata (no worries, no problems)

 

[ziggy29]

You can comfortably retire with anything from $0 to $5 million saved up for retirement, depending on your life's configuration.

Paid off home, good pension with COLA and SS, secure health insurance, you can probably retire with NO retirement savings. None of those things and you are in your 40s or 50s, it'll take a couple million, minimum, unless you live an austere life.

In the general case, of course.

That said, the OP indicated that her DH would continue to work for health insurance. That's really not retirement, as you still have employment income and health insurance that comes from employment. Your employer can still bust your lifestyle with a pink slip or by cutting health insurance -- it's still dependent on your employer. That said, even one stay-at-home spouse can reduce a lot of expenses compared to two working full time.