NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
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.
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.
Naturally though, when my 40th birthday rolled around, my friend remembered that, and said WHAT, you're STILL W*RKING?!
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.
It really makes a difference if you have either decent pension or SS. I wouldn’t retire on that level of savings only.
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.
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).
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.
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.
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.
Of course, that doesn't mean that everybody who retires has an extravagant retirement.
In order to maximize the chance of 20 good years, the odds say retire early.
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...
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.
If living mostly on SS when you are old is good with you, then you can certainly take that route.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.
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.