Is $4.3 million enough?

[hesperus]

Hello all. I have lurked here for awhile and have enjoyed the various posts and perspectives from members. While some may question the seriousness of this title thread; I think we all have a fear....irrational or valid....as to the question of "Do I have enough" to see me through retirement especially when considering "worst case scenarios" i.e stock markets crash at the start of retirement, unforeseen health issues and related expenses, etc.
Here is our scenario ( me and my wife):

Ages: 55 & 54

Wife will work until next year. I am already retired.

Current assets ( general idea):

Cash: $860,000 = 20%
Stock mutual funds: $2,000,000 = 46%
Bond Mutual funds: $1,460,000 = 34%

Total: $4,300,000

I am in a very similar position as you are, and could have almost cut and pasted your particulars, with a few exceptions.

Our situation:

Ages 55 and 47
Wife will work until next year. I am already retired.


Current assets :

Cash: $750K = 16%
Stocks: $2,340,000 = 50%
Bond Mutual funds: $1,560,000 = 34%

Total: $4,650,000 ($1M of this is in a Generation Skipping trust, which we draw income from until I pass)

House and additional land w/cabin paid off. No debt of any kind.
No children (that's a big one).
Annual expenses are at this time approx. $60,000/year.
We are under wife's health care coverage, but will have to go under ACA after she leaves her job. Estimate additional 15K-18K year for unsubsidized ACA costs.

We're getting around $120K year in income from these holdings, and am reinvesting what we do not spend, although with the markets as high as they are, I have been OK with holding the cash and dollar cost averaging over a period of time. The cash is excessive, but we will be investing it down to closer to about 5%-10% over time. I've been 'retired' for about three years. So far, we have more than enough to a point where we could boost our standard of living, but I am a fan of the 'quiet millionaire next door', and have no desire to escalate spending because of this. I'll admit we're spending more on our vacations, and we get a new (used) car when we need it, but at 56 I feel we should keep our spending at a comfortable level that's inline with what we are accustomed to, keep investing the excess income, and growing the holdings. Perhaps at 60 or 65 we may splurge on a larger home.

So, even with children, it appears that you should have more than enough, especially if your holdings are kicking off some income.

 

[edsahara]

Get out NOW!

Good God man. You've worked years TOO LONG! Retirement is fantastic. Don't miss another day of it.

 

[dunkelblau]

I chose to stay on the job when I first crossed into that territory. I think it was the right choice for me because that was just before the big stock market dump at the end of 2008 and it was the first time my portfolio dropped by seven figures. At that time I was a decade younger than you and sans pension so I think I would have lost sleep over the loss. Having the paycheck coming in gave me confidence to buy into the drop, and that vintage has turned out remarkably well. I doubt I would have been buying without that money coming in, in fact I probably would have joined the panic selling.

After the recovery I took a short test run on retirement but I didn't feel the pull so I let management talk me back in with some special work arrangements. Partly this is having nothing better to do with my time, but part of it is also reluctance to completely trust the financial system. Now I'm thinking so long as I'm in good health and work is to my liking, I'm not rushing towards the exit.

 

[ejman]

After reading this thread I think I finally understand why Warren Buffett has not retired. He doesn't have enough money!

 

[nun]

Welcome to the forum.

We've had a couple of threads on millionaires collecting ACA subsidies. There aren't many people that will fault you for taking advantage of any legal tax deduction or government benefit.

Just one comment on this - it only makes sense to limit income when the forgone income is less than the subsidy received. If the potential income is greater than the additional cost of healthcare, you might want to rethink that part of your strategy.

I'm a millionaire and when I applied for ACA coverage I qualified for Medicaid. Since then I've been persuaded to take a part time j*b for 4 months that will put me well over the Medicare income limit and I've canceled it. I'm glad I didn't quite get around to canceling my previous insurance and even with the premiums and tax I'll come out $20k ahead on the deal.

To address the OP's question. When you first retire you will worry about money, but after a year or so you'll be into a routine and will know one way or the other if you are ok or need to work again.

 

[jim584672]

Since then I've been persuaded to take a part time j*b for 4 months ....

Once your part time job is over you can drop back in to Medicaid at any time in the year, provided your monthly income is under 138% FPL.

 

[FireBug]

Based on ALL the information the OP provided, $4,300,000/$45,000 will give him over 95 years of retirement (not factoring in inflation). Yes, you can retire