What was your magic Number? Was : Survey finds $880,000 is magic number

[Major Tom]

My magic number was however much I had when I was laid off and realized I didn't feel like going back to work.

 

[Options]

Never had a magic number. Last I checked I'm at 39x spending and 2.4 or 2.5% WR (includes SS delayed to 70). FIDO, Firecalc, ********, ESPlanner, Financial Engines all say 100% success with leftover $ at end of plan. Personally have more confidence with FIDO as the default calculation is based on market returns performing substantially lower than average. Firecalc and ******** (without adjustments) are much more generous as they rely on historical US data, something I'm not comfortable with.

AFAICT, Pfau has got to be the most conservative forecaster out there, with a 2.5% inflation adjusted WR for 30 years and 90% success rate (given current valuations). Cotton states the range of recommended SWR's from recent literature is 3.2%-3.5%, including VG's recent estimate. Of course these are all just forecasts, but I agree with Cotton that it's best to plan conservatively. A "magic number" could blow up in your face tomorrow (see 2008).

 

[Aus_E_Expat]

There is no magic number.

I thought it was $5m but I got there and did not feel comfortable with that so now I think it must be $10m - but if I hit that, I doubt if I will feel comfortable with that.

Maybe I just like to worry.

 

[Samething]

My magic number (1.6M) quest turned into a ready or not number (1.25M) when I started to suffer from job burnout last year. A heart to heart with my supervisors (funny how they asked me how I was doing after I inquired about some details of my retirement account from HR) resulted in a transfer away from a abusive boss, cut my daily commute in half and reduced my hours somewhat. And my NW has grown 16% (too much company stock) since then. So if Mr. Market can hang it there a little longer I anticipate my "ready or not" number will be just a little short of my goal when I pull the plug, pay off Uncle Sam and fix my desired AA.

 

[photoguy]

There is a term for that - accommodation.

When I first started thinking about ER, I thought that 1.2M was enough but as I got closer I kept pushing up the number. Fortunately I didn't let the increases go on forever and decided to fire once we got to 1.8M


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[Ronstar]

I didn't have a magic number. DW had a magic date. So I waited (almost) to the time when she maximized her pension and secured retired health care from her employer.

 

[Alan]

I am a dinosaur and had 2 magic numbers, 55 and 80. To take early retirement with a DB pension and retiree health insurance you had to be at least 55 years of age, and the sum of your age and years of service had to be 80 or higher.

FIRECALC also showed 100% when I hit 55 and 80

 

[mtheulen]

Quite apparent here that most of us got to a "number" then decided to push the "number" a little more.As i'am presently doing this 1.5 going to 2, I keep reminding myself that the larger number does not equate with health. Just buried a co-worker 2 weeks ago who was 56.Want to make sure I clearly see that side of the equation as I balance net worth/ expenses/age/health

 

[flyingaway]

My magic number is $2M, at which my wife will retire and we will do extensive travels (I am already semi-retired). If we get to $3M, we will buy business class seats for international travels.

 

[flyingaway]

Quite apparent here that most of us got to a "number" then decided to push the "number" a little more.As i'am presently doing this 1.5 going to 2, I keep reminding myself that the larger number does not equate with health. Just buried a co-worker 2 weeks ago who was 56.Want to make sure I clearly see that side of the equation as I balance net worth/ expenses/age/health

Just to take this into account, we have started our "experiencing retirement" phase by doubling our travels, starting this year after my younger son goes to college. There is no need to wait until my magic number is hit. Time is more valuable.

 

[scrabbler1]

My magic number, the number I was watching closely as the final pieces of my ER plan were falling into place in 2007-08, was the exploding value of the company stock in my 401k. When it reached $300k, I knew I could cash it out at favorable tax rates via NUA, then invest it in a bond fund I had been watching for over a year to generate the monthly income I would need to retire on. I already had enough in my other non-retirement investments to (1) cover the taxes on the stock cashout, (2) provide me a decent cushion/surplus, and (3) provide some growth in the portfolio.

 

[scrinch]

My number was $2M, but I found out that it wasn't my DW's number. We're at more than 2x that number now, and we're counting down to a date, not a net worth number.

 

[imoldernu]

I think that many older members may find that their magic number is/was considerably less than an $880K portfolio (excluding real estate). This would be especially likely for those with a paid off house, no dependents, and living in low COL areas, who have reached SS age and/or have a small pension, and who do not regard expensive international travel as one of their core activities. I fall in that category.

Younger retirees may need more to bridge the gap to SS and/or pension and to last for more than 30 years.

+1

Well said... Retiring in 1989, we didn't think in terms of "magic"... More like, we'll give it a try... In the 1940's, the song was "Coming in on a Wing and a Prayer". (lyrics @ 1:31)

'Course the dollar was a bit different then, $500K in 1989, is $950K today.

Planning for the future is lots easier when your horizon is 10 years out, and not 20, 30 or 40.

 

[Letj]

There is no magic number.

I thought it was $5m but I got there and did not feel comfortable with that so now I think it must be $10m - but if I hit that, I doubt if I will feel comfortable with that.

Maybe I just like to worry.

It's human nature to never be satisfied unless we make a conscious effort to do so.


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[Live Free]

I have not run Firecalc. I am in the process of tracking our spending (started in November 2014) for two or three years to understand our spending in more detail. Already this has been an eye-opening exercise. So, my magic number is changing, as are my spending habits.

Right now, I think the goal is $2MM, paid off mortgage, and to be work-free by 60. If we can decrease spending consistently and the market gods are with us, maybe we can shave a year or two off of this. If, if, if...

 

[Sea Kayaker]

2M net worth, no debts at 42, with a still happily working DW making a nice six figure sum...really couldn't be better for yours truly. Outside shot of reaching 3M by the time DW joins me in ER. Still can't believe we have managed this...

 

[EastWest Gal]

When I met with a financial planner 20+ years ago, I had a goal of retiring at 55 and knew nothing about stocks/bonds and the like. They said I would need $5M, based on inflation rates, living in Silicon Valley, and the like.

Many things have changed since then, from where I lived, inflation rates, interest rates, etc. Last year joined this forum, paid off the house, ran all the retirement calculators and realized we were at the magic number and I was good to go. I went.

So in the end, my magic number ended up at $3MM.

 

[Andre1969]

My original goal was $1M in investible assets, and a paid-off mortgage. I probably set that goal around 1998 or 1999, around the time I paid off the debt from my marriage and really got serious about investing. $1M really seemed like a lot of money at the time.

But, time marched on, and so did inflation. My tastes also got a bit richer. I was living in a condo at the time, and the type of house I really wanted probably cost around $140-170K at the time. Now, those same houses would probably run around $250-300K, but you couldn't give one to me. These days, the type of houses I really like (more land, more secluded areas, but not necessarily bigger, fancier homes) are more like $450K and up.

So now, I've adjusted my goal to around $2M, at which point I'd put a down payment on the house I want, and secure the mortgage. And then, when the time really feels right, pull the plug.

Adjusting for inflation, that $1M goal back in 1998-1999 would be around $1.5M today. If I had $1.5M AND no mortgage, that would equate fairly closely to my current goal of $2M plus a mortgage. So, maybe my original goal wasn't that far off?

 

[explanade]

I didn't have a number but when I first discovered ER, I was thinking more of immediate annuities and was thinking if I could replace at least 75-80% of my then salary, I'd have been happy.

The threads on index funds, AA and especially the debunking of annuities were all very helpful.

I do recall those ING ads showing various numbers. Before FIREing, I ran all the calculators of course.

It's only been about 7 months since I FIRE'd and 2015 will be the first year without a job but my expectations have changed a lot over the years.

I expect to spend less than 3% this year but would still represent more spending that I was able to do when I was working. Longer trips, more splurges.

 

[robnplunder]

Was or is or will be?

I am hoping it is $1.9M in 3 months. Nothing magical about it. It's up to me to make it work. I hold the wand.

 

[Looking4Ward]

$1.2M even though Firecalc kept returning 100% success with $850K.

 

[jollystomper]

Mine was $1.5M, as i figured that a 2% withdrawal rate of $30000 would make up the difference between my pension and what I would need for a comfortable retirement.

Of course, having hit that, my new "nice if I make it but not gonna stretch things out if I don't" number is $2M. Then, with a 2.5% SWR, DW and I can lead a "very comfortable" retirement.

 

[jcretire77]

$3,000,000 living in a paid off condo. But then we found a house that we both loved. Boy has that thrown a wrench into the plans.

 

[neihn]

Anywhere from 1.2 to 1.5M investment asset.

 

[calmloki]

I've lied to myself for decades. By assuming a 3% return after retirement, a 3.5% inflation rate, and a needed annual income about a third greater than we spend, Quicken retirement planner says my retirement plan fails about 3 years before the gal's demise 29 years from now. That plan has us selling all the rentals in 5 years, which probably won't happen - others derive income from them and they throw off more than we spend. Having not yet paid our taxes due our net worth is a bit high and is very close to the highest it was last year - even though we gave away an old multi-unit building in the interim. Magic prognostication says we will probably be ok even though the numbers I put in Quicken make it say we won't. If only we could retire. Or maybe we did. It's not easy talking retirement when you hardly ever "worked" at a "job" and are content in a van down by the river.