Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
25X annual expenses ???
Old 01-13-2018, 07:32 AM   #1
Recycles dryer sheets
 
Join Date: Sep 2017
Location: exeter
Posts: 443
25X annual expenses ???

I notice a rule of thumb folks use for their nest egg goal is 25X annual expenses. I guess this comes from the 4% WR rule of thumb.

Anyway, do folks usually factor in other income streams in this?

Using the 25X rule, I figure we'd want $2.5M saved but we have $1.9M and won't get there by the time I retire.

However, we'll have significant retirement income from SS and pensions.
__________________

__________________
What the heck is going on ???
albireo13 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-13-2018, 07:38 AM   #2
Thinks s/he gets paid by the post
VanWinkle's Avatar
 
Join Date: Oct 2017
Location: Brighton
Posts: 1,315
Quote:
Originally Posted by albireo13 View Post
I notice a rule of thumb folks use for their nest egg goal is 25X annual expenses. I guess this comes from the 4% WR rule of thumb.

Anyway, do folks usually factor in other income streams in this?

Using the 25X rule, I figure we'd want $2.5M saved but we have $1.9M and won't get there by the time I retire.

However, we'll have significant retirement income from SS and pensions.
The 25X rule is for 25 times the annual liability needed to be covered by your portfolio. I you need 60,000 per year and have 30,000 in SS and pension, you will need 30,000 per year from your portfolio. 25 x 30,000 = 750,000

You have to allow for taxes so maybe you need 35000 pre-tax or 35,000 x 25 = 875,000.

If you want to be conservative, some use 30X or 40X instead of 25.
__________________

__________________
Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote
Old 01-13-2018, 07:43 AM   #3
Recycles dryer sheets
 
Join Date: Sep 2017
Location: exeter
Posts: 443
Ok, thx. That makes sense. I've been adding up my income sources and using a 4% WR metric for my estimates so, wanted to make sure I wasn't missing something.
__________________
What the heck is going on ???
albireo13 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Blogger Joe Udo says 25x expenses not enough for early-retirees haha FIRE and Money 182 09-17-2016 01:39 PM
"25X Spending" variations Midpack FIRE and Money 11 05-01-2013 01:34 PM
Annual expenses increased or decreased over the retirement years? skyvue FIRE and Money 20 12-13-2009 09:08 PM
Determining ER annual living expenses MuirWannabe FIRE and Money 41 10-22-2009 09:33 PM

» Quick Links

 
All times are GMT -6. The time now is 04:11 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×