What is your magic retirement number in US$ dollars?

[Enuff2Eat]

the more the better... i am bad. hey, what do u expect from a guy that got two young kids and a wife?


enuff

 

[Meadbh]

$3 milllion US, or approximately $3.5 million Canadian. That's because (a) I won't have a pension. (b) I may move somewhere more expensive, and (c) I may not want to be a scrooge.

 

[OKLibrarian]

Per FIREcalc we're looking at about 750K (we're cheapskate DINKs in a low-cost part of the country), but I think I'll know better once we get the house and get an idea of all those incidental maintenance expenses (probable mortgage, taxes, etc. are factored into the number I used for SWR) . Of course we're going to pay the house off before we pull the trigger, and I could see us sticking it out until we hit 7 figures just to have a bit more padding. I also need about 8 more years in this job for free health insurance to 65 (three cheers for the civil service!), so that's a factor as well.

 

[NinjaPigeon]

I went for 2.5Million, just because I'd like to keep up my lifestyle. I wouldn't want to retire and try to survive on under 50k/year.

 

[runchman]

My numbers go like this (todays dollars)

1.5 to 2 mil - seriously start thinking about it
2.5 mil - "the target"
3 mil - in a heartbeat

I'm 43, target is 50 if market goes wild, 55 if reasonable, 60 if things suck. I don't really hate work, so I'm not militant about getting out asap.

 

[Arc]

Me too!!!

I want $3M so I can live off the interest and hopefully never look back.

 

[Arc]

Me too - again!!

$3 milllion US, or approximately $3.5 million Canadian. That's because (a) I won't have a pension. (b) I may move somewhere more expensive, and (c) I may not want to be a scrooge.

 

[Spanky]

I went for 2.5Million, just because I'd like to keep up my lifestyle. I wouldn't want to retire and try to survive on under 50k/year.

Your withdrawal rate is only 2%. You can get by with only $1.25 Million.

 

[SecondCor521]

Did you forget a zero on there? That must be one of the smallest targets for FIRE portfolio I've seen! Does $9085/yr include all your predicted expenses during ER (like health ins. and car replacements)? Are you going to live abroad in Mexico/Thailand (fairly easily doable for a single guy)?

If you're staying put in the US, do you plan on saving a little extra to allow for budget overruns or future desires/hobbies/wants you may not know you have now?

Nope, I didn't. I just looked up in Quicken what I was spending after subtracting out child support, mortgage interest, taxes, and kid expenses for the most recent month and multiplied by 12.

But I am cheating. First, those categories I subtract out to get that small number represent about 80% of my expenditures, so someone could argue that my FIRE target should be increased by a factor of five. Second, I am basing that number on a single month, where my stated approach is to use a six month window. Being recently divorced and just starting up again in Quicken I don't have a six month data set yet, but when I do that is what I will use. That will make the number go up somewhat because I have a number of expenses, such as property taxes, that are bi-annual in nature. Third, I think it is about 99.999% doubtful that my kid expenditures will go to zero when they are out of my house. Fourth, if I didn't spend so much on those large categories, I'd likely spend more on myself.

Using my most recent data of 3/11/07 through 4/10/07, my annual number is actually up a bit to $9,884.20, which makes my 25x number $246,105:

Food 302.07 (about 1/3 eating out and 2/3 groceries)
Utilities 205.18 (cell, water, gas, electric)
Auto 91.57 (gas only in this case, but would include registration, license, emissions, repairs)
Insurance 73.16 (auto and medical)
Household 49.11
Recreation 42.58
Gifts Given 31.79
Cash 20
Pets 4.34
Interest Expense 0.55
TOTAL 820.35

I intend to travel but I don't intend to move when I retire, so I will stay in the US.

I'm not saving any more for budget overruns or future stuff. My central premise, which I will revisit when the time gets closer, is that my expected spending in retirement should be what I am spending right before retirement, adjusted up for certain increases such as travel and reduced for certain decreases such as taxes. It is my personal belief, and planning assumption, that those increases and decreases will cancel each other out. I will also revisit that assumption when the time gets closer.

2Cor521

 

[SecondCor521]

Update:

For the three months ending today:

Mortgage Interest + Taxes + Kids + Child Support represent nearly 84% of my expenses.
Annual run rate on the rest is about $10,671. 25x number is thus $266,772

2Cor521

 

[Spanky]

SecondCor521,

I think your estimate is low -- how about home insurance, entertainment & hobbies, clothing, drugs & other essentials, house/Yard maintenance, savings for kid's education, property taxes, long-term-care insurance, other discretionary items, dental care, eye care??

Your medical insurance is really low - we are paying over $250 per month for a family of four. Your utility bill is pretty low also.

 

[bosco]

$3 milllion US, or approximately $3.5 million Canadian. That's because (a) I won't have a pension. (b) I may move somewhere more expensive, and (c) I may not want to be a scrooge.

at the rate things are going, $3.5 mil Canadian will probably be worth $4.5 mil US by the time you retire.

 

[NinjaPigeon]

Your withdrawal rate is only 2%. You can get by with only $1.25 Million.

I said with I don't wanna retire with Only 50k. I wanna be spending 100k in retirement Or were you suggesting there was a way to retire without my SO? Hmm, interesting. We should add an option for that to FireCalc - "[] I will not be sharing my retirement money with my DH/DW. Check here to FIRE 10 years earlier!"

 

[aggie]

I said a million but didn't include our pensions (2 at 55 totaling 20k/year) and another small one of 4k at 65, all non-cola'd. Also SS at 62 about 36k (today's dollars) for the both of us. We are retiring in five months and do not have a million, we're closer to 900k. We're doing it anyway and will cut back wherever needed to make the budgeted numbers or available cash. I quit my megadollar career five years ago and work for small change from my home. DH will quit in September from his megabuck job because he's burned out. We both expect to do some continuing part-time or casual work as we desire mostly to help out the grandkids. We figure everything we're counting and analyzing is soft. Our budget is soft because we've never been retired and truly don't know what the numbers will be. We've researched and tracked expenses and analyzed, but won't have definitives until we retire. Biggest changes will be decreased housing expenses and increased (from 3k to 15k per year (retiree medical through megacorp) health insurance. We know our pension and SS numbers assuming either is still there in the future. We LBYM now and will continue to do so even on reduced dollars. If my choice was to go back to megacorp or to live on half what we budgeted or think we have available, I'd still say retire!

 

[SecondCor521]

SecondCor521,

I think your estimate is low -- how about home insurance, entertainment & hobbies, clothing, drugs & other essentials, house/Yard maintenance, savings for kid's education, property taxes, long-term-care insurance, other discretionary items, dental care, eye care??

Your medical insurance is really low - we are paying over $250 per month for a family of four. Your utility bill is pretty low also.

It's not an estimate. Those numbers are actual numbers from Quicken, where I record all of my income and expenses. But I did go through the exercise of going through your list and considered each of them [1]. Basically I expect my expenses to go up as I extend my budget history from three months to six months and incur some of those irregular or lumpy expenses such as property taxes. But also I simply don't spend as much money -- or any money at all -- on a lot of things that others do (such as drugs).

2Cor521



[1]:

Home insurance: This is one of those lumpy expenses. In my case it is paid once per year in December, so it is not included in the one month or three month numbers I have provided on this thread. My home insurance is ~$260 per year.

Entertainment and hobbies:
TV - got the TV for free and the electricity to run it is under Utilities:Electric.
Kids - under Kids expenses, explained earlier.
Library - free except the gas to get there is under Auto:Fuel.
Exercise: Free, already own a bicycle and tennis shoes. The bike hasn't required any maintenance lately, but that would be under Recreation.
Getting my MBA - paid for by a government grant, fuel to get there is under Auto:Fuel.
Movies - rent movies from the local video store sometimes. Under Recreation:Movies.
Eating out: Under Food:Eating out. $100 spent in the last three months.

Clothing - I did buy some new dress slacks at Costco for about $60, but I guess that was outside of the three month window. But again, this is a lumpy expense for me, so over a six month window I would expect to see some clothing expenses.

Drugs - don't take any.

Essentials - not sure what you mean here. Toiletries are under Food:Groceries, I don't separate those out.

House/yard - Own a lawn mower and tools already (free hand-me-downs). Gas for the lawn mower will be under Landscaping, but I haven't bought any this spring yet. Home is 2 years old and hasn't required any maintenance yet. Again, that will be a lumpy expense.

Saving for kids' education - not considered an expense from Quicken's point of view because I am just transferring $ from one account to another. As mentioned before, one adjustment I make to my FIRE calculations is the NPV of their unfunded college expenses. I chip away at this number when I can, and relatives also contribute there.

Property taxes - $450 due twice yearly; haven't made a payment in the last three months; next payment is June.

LTC insurance - Don't own it, don't want it. Plan is to self insure.

Other discretionary items - I don't buy discretionary items as already noted. By definition, they're discretionary so I don't need them.

Dental care - haven't seen the dentist in the last six months, but I have an appointment next month. I don't carry dental insurance so it will probably be $100 or so.

Eye care - I wear glasses but already own a pair. If I break or lose them a new pair will run me about $300.

My medical insurance actually costs what Quicken says it costs. I am 38 and single and have a high deductible PPO through my employer, so my monthly premium is about $30. My kids' medical insurance is covered within my child support payment.

My utility bill is low because I don't have cable TV or internet or home telephone service. I use a T-Mobile prepaid cell phone that runs me about $40 per month. I also am rarely home (work and school and kids) and when I am gone I leave the lights off and the heat down. Finally, my home is 2 years old and very energy efficient.

 

[DRiP Guy]

Hope no one will mind too much if I engage in a tiny off topic observation -- please look at the graph. Notice two distinct peaks? (bimodal distribution).

Further, notice where those two peaks are centered -- i.e. at which exact values?

Now, anyone who does not believe that mental accounting, and emotion (such as attaching significance to round, invented numbers) does not exist and actually affect even our most basic thinking about FI/RE ("How much do I need in order to pull the trigger?"), then they need only look to that one chart of inputs the wisest, least emotional, most considered, most analytical, and most thoughtful when it comes to this question, and...



it looks like two little kids just threw out numbers to each other on the playground...

"I'd like a million dollars!"

"Oh, yeah? Well I'd like TWO Millions... nyah nyah..."

Magic, indeed.

 

[bssc]

$2 million + COLA'd pension at 60 plus paid off house

It is a rough number and as we get closer to it, we can determine how realistic it is.

 

[AirJordan]

I'm 24, but seriously I get bored really easy, and would like to keep my job as it keeps my mind occupied. I don't plan on retiring ever probably. But if I had to put a number on it, I'd say 15 million dollars, and I'm completely serious too. That way off of treasuries I'd be making close to 1 mil a year, and I could spend my days buying younger tail, and at the casino.

 

[chinaco]

I'm 24, but seriously I get bored really easy, and would like to keep my job as it keeps my mind occupied. I don't plan on retiring ever probably.

Trust me.... That will change!

But if I had to put a number on it, I'd say 15 million dollars, and I'm completely serious too. That way off of treasuries I'd be making close to 1 mil a year, and I could spend my days buying younger tail, and at the casino.

That sounds like every 20 something single male's dream!

However, the words casino and $15mm only workout on the casino's side of the books.

 

[Tadpole]

Ok, So I figured out our pre-tax spending and then used an annuity calculator to estimate the value of pensions and SS. Then I subtracted the current pre-tax spending minus the pensions and SS at earliest retirement age and used the calculator again to estimate the additional savings needed.

The savings needed was about $750,000 so I can easily retire at this age. but I think I'll still work longer and build a cushion.

 

[Spanky]

2Cor521,
Thanks for listing your expenses -- they are low. Keep it up. Take care.

Spanky

 

[Spanky]

I'm 24, but seriously I get bored really easy, and would like to keep my job as it keeps my mind occupied. I don't plan on retiring ever probably. But if I had to put a number on it, I'd say 15 million dollars, and I'm completely serious too.

Well, Bill Gates worked (played?) despite his billions. It's funny that you join this forum when you have no intention to retire.

 

[renferme]

Wife still working, but when she retires:
we plan to live on 2 pensions, 2 401k's, 2 social securities,
and just hold and grow the other assets for as long as possible.
.

 

[Helen]

I voted a million but we'll have two cola'd pensions as well.

The real answer is what ever we've amassed six years from now.

 

[redduck]

Well, Bill Gates worked (played?) despite his billions. It's funny that you join this forum when you have no intention to retire.

Actually, it's not all that funny. I like my job and while there are days that I can't wait to retire, there are also days where I figure "What's the rush?" Anyhow, this is a terrific forum regarding money management, life strategies, life philosophies, conventional and unconvential wisdom, etc. (Don't tell anybody, but this is my favorite website).

As to the question re: the magic number. The magic number keeps increasing: $1.5million originally sounded great, then $2million sounded a whole lot better. $2.5million should completely shut me up. But, the stock market is going to have to go on a real tear to get me there.