Did Anyone Retire with "Only" .75M$ Saved?

[joeea]

Quote:

Originally Posted by ShokWaveRider That is how squirrels think and act. No Commas, No Periods, just a continuous thought/Action process.

How nice.

[Joe1954]

You have to look at the safe withdrawal rate of 4% and if that much would be adequate. 1M will give (usually) $40K/year. If you have pensions coming (e.g. SS, teachers retirement, etc.), you might be able to hold out until they kick in. We have been retired for 4 years now and have taken closer to 5% without losing principal. A year from now, I will start getting the max monthly from SS at which time we will go back to 4%. You also have to consider that inflation will reduce your spending power over time. Since we hope to leave “some” money to our children, my top priority is never dipping into my principal. Good luck with whatever you decide.

[SonofCohoes]

Less but we have a pension and rental income.

[Jamie1101]

I retired at 53 from a GM production job with the "30 years and out" provision in 2005. Factory life could really suck but early on I realized the benefits package was way worth the aggravation so I stuck it out. In the early 1980's when IRAs started I maxed out my yearly contributions. I worked lots of overtime when possible and paid off my house early in 2000. There were only four years of house payments to worry about.

Pension, SSI, and Annuity bring me in just about $36K a year which affords me a great standard of living. You don't need a lot of money to spend to be happy....

With no debt and actively managed investments to fall back upon (which are a bit shy of the 1million mark) I can honestly say not having to worry about money has made this life of mine a great adventure. Will have to make withdrawals from my IRA in three years...

[NXR7]

Yes, and all pre-tax. But it's only been six weeks and two days so far.

I had intended to go on July 4th of 2020 because I'd be Medicare-eligible but life happened. My wife is no longer working but five years younger. So we are paying my COBRA for fourteen months because we want to travel and need good, nationwide coverage.

I have a meager pension that I filed for early and also filed for SS early but neither starts until July. Those will cover about 75% of essential monthly expenses (excluding healthcare) because we, too, live cheaply and live in an area where the costs are reasonable. One investment, the biggest chunk of the total retirement savings, pays the remaining 25% via dividends. This is my biggest risk area but one I'm comfortable with.

I had a small HSA at my last job that I can use to pay COBRA premiums (it's an exception to the normal rule of "HSA's cannot be used for healthcare premiums"). I have a small 401(k) from that last job that I have committed to healthcare and the two will pay COBRA through 2019. I'm on a 90% coverage low-deductible COBRA (high-cost) plan and will switch to a less expensive one at enrollment in November so the 2020 costs should be lower. Because I will transition to Medicare before my 18 months of COBRA are up, my DW "should" be eligible for another 18 months of COBRA. In any event, she has been saving for this eventuality for a long time due to our age difference so it won't be a huge burden. We hope...

Tomorrow is promised to no one. I've had too many friends and acquaintances develop cancers and pass away, two a lot younger than me (brain cancer). Another died at 3 AM the day after his 63rd birthday from cancer. I literally woke up the day after my 63rd birthday and my first thought was "I just lived longer than Denny." An older friend died from complications of Alzheimer's.

My stress levels dropped through the floor. My entire outlook on life has changed for the better. I worked full-time for forty-six years in a row. Everyone told me "You'll know when it's time" and they were right. Even though it was earlier than I planned it was time. Zero regrets. So far.

Ray

[NXR7]

Quote:

Originally Posted by NW-Bound 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.

Our first mortgage was 10.5% because interest rates were through the roof. So were prices. CD's were paying around 17% or so, I think. A 25%/yr return today is great but maybe not if inflation rockets.

Ray

[almost there]

Depends on other assets.
I did, but have another $3800 a month coming in.
With SS still 5 yrs away.

Depends on your situation.

[IrishMoss]

You folks really need to add the lump sum of social security expected to your total portfolio to get to one total portfolio number.

If you determine you only have $700K for retirement but oh yeah, there's another $700K that will be coming in over the course of 20 years when you start taking SS benefits, and that will be another $35K/year, you're *not* just retiring on $700K. Rather, you are actually retiring on something between $1.2M to $1.3M to start (assuming net present value computation added to existing portfolio investments). That's a huge difference than "just" $700K.

Social Security and pensions are guaranteed income. IF you will get them count them as part of your total portfolio. You can do an NPV (net present value) calculation to get the 2019 lump-sum value of social security and/or pension to add to your existing portfolio total for an accurate total.

[almost there]

Never banked on SS. Or a pension. Never did.
Will be nice, and believe it will happen.
Just never put it into the plan.
Helped me in the long run.

[Old Microbiologist]

We did it but also have 4 pensions that amount to $6k a month. Living expenses are less than $2k a month. We retired to Hungary where the cost of living is low and medical is excellent and cheap. It is so cheap I rejected to keep paying for Medicare to keep my military Tricare so that is gone and I don't regret the decision. Our cash expenses for medical is less than that Part B premium. We have a fantastic house with swimming pool and travel a lot. We have expensive hobbies including a yacht and still it is not a problem and we haven't touched our 401k's at all. $450k is in equities in a brokerage account which my SWMBO dabbles as a Day Trader when she is in the mood and has a daily goal of $700. For what I can never figure out but she does well and it all stays in the equity account. She grew our reserves (401k's and brokerage account) more than $300k since we retired 9 years ago so now it is over a million. All of our 401k's were rolled over into equity accounts on Scottrade which is now TD America and we handle those ourselves. Now we are into the mandatory withdrawal age so just move it into the equity account at a rate which based on taxes is minimal for the lowest taxes. We pay cash for everything and have zero debt. We also have no property taxes which is one big reason we moved here.

[Elizrogers]

I retired last year with only $200k in my 401k. Living on social security and trying to take only about 10k/yr out for annual expenses like auto & home, taxes etc. This year will take 13k, as had some unexpected home maintenance pop up. I still have a mortgage and an old car, so you all are way ahead of me. But since you already live below your means it should be easy for you to manage. My big adjustment has been not buying anything I wanted whether needed or not and having to shop around for best prices on utilities, insurance etc. But I'm doing fine. I made a trip from Texas to Oregon for my 50th high school reunion. The biggest expense there was boarding 3 cats for a week.😹. And shorter trips to Arkansas.

I say if you're no longer looking forward to going into work everyday, all day, retire. You should be fine. If you start to worry too much after the first year, you can always get something part-time or short-term to bring in a little extra. Your house is paid off, so should you outlive your money (not likely), you can always reverse mortgage your house for a few hundred thousand to keep you going. So, there's a Plan B in case of worst case scenario. So, go for it.

[ckelly78z]

A BIG equation factor for this question is where you residence is located. We have a rural 10 acre farm in NW Ohio...which has a very low COL, and has been paid off for 5 years now, and i'm only 54. We don't live near a large metro area with all of it's entertainment temptations, or HCOL. We are also very happy cooking good meals at home, and while camping with friends, and family.

Another BIG factor is your sense of satisfaction. I have had the same job for 30 years, the same house for 25 years, and the same lovely DW for 31. This stability allows me to concentrate on other things rather than chasing expensive dreams.

[pj.mask]

I don’t think we should include Social security unless you retire <10 years to payments. (Almost) everyone should get social security.

An alternative might be retire spending $30k a year.. the paradox being most who can save this sum early would likely be high compensation and tempted to work a few more years to double that amount. Those who save up to 750k later in life have probably lived a long time on low income.

[indiajust]

But of course! ER Eleven years ago at 45, had just over 100k in IRA, a bit more than that on the taxable side, plus house and mortgage. Exited 2015 with 220 in Roth and 400 on taxable side, house/mtg/possessions/career in rear mirror.

Unlike many here, I have no interest in real estate, paid up or not. As long as I can pay rent, I'll have a roof. No security illusion.

[NW-Bound]

Quote:

Originally Posted by NXR7 Our first mortgage was 10.5% because interest rates were through the roof. So were prices. CD's were paying around 17% or so, I think. A 25%/yr return today is great but maybe not if inflation rockets. Ray

My first mortgage in spring of 1980 was 14%, FHA assumable loan. There was another 0.5% mortgage insurance on top of that, if memory serves. Later in the year, the rate went up another 1 or 2% before retreating.

So, a 25% investment return would still be a pipe dream then.

And if inflation in the US ever gets to 20%, well, I will not say it cannot happen because a lot of weird unimaginable things has happened before, but if it does, I don't know what life will be like.

[Maidensong]

We retired with less than $500K in our IRA, but we have no debt. We live in a LCOL area. We own ten rental properties and have a very small pension, which we've been living on, and have other funds in a stock account that we tap for travel (21 day cruise to Norway booked for next month!) We've been on ACA insurance since we ran out of COBRA, but will switch to Medicare by next year. Once we start SS when the DH turns 66, we'll be able to bank a good bit of our rental income. We consider the money in the IRA gravy and won't touch it until we're forced to by the government.

A million in the stock market isn't the magic bullet when it's time to decide if you can retire. We wanted to have several streams of income--pension, rental, SS, our taxable stock account and finally, the IRA. We sleep well knowing if something happens to one stream, the others are there to fill in the gap.

[JJpop]

Well when you figure that probably 80 pct or more people retire with less than 750,000,it must be very doable.

[foxfirev5]

It's funny to me that these threads are where the "I've got a pension and SS that cover my expenses people chime in". IMHO it kind of misses the point. Humble brag perhaps?

[24601NoMore]

Quote:

Originally Posted by foxfirev5 It's funny to me that these threads are where the "I've got a pension and SS that cover my expenses people chime in". IMHO it kind of misses the point. Humble brag perhaps?

I've always been surprised at the seemingly high number of people on ER.org that have a pension. I know VERY few people that do - only muni, state and Fed .gov workers, teachers (less so nowadays) and that's about it.

All I know is that pensions in my or DW's business simply don't exist - and haven't for decades (40+ years) now. Heck, at my last company they only (after I left) recently introduced a 401K match. That was IT, although they did give us a handful of RSUs - certainly nothing equivalent to most pensions in terms of total $$s.

Would be an interesting exercise to do a poll of those who have pensions vs. those who don't among the users here. But then again, maybe it's precisely the fact that having a pension allows many to ER - and those who don't have a pension aren't on this site already because they in many cases don't have the income stream (via a pension) to even THINK about ER..

[ERD50]

Quote:

Originally Posted by foxfirev5 ... IMHO it kind of misses the point. ...

The OP is pointless (WADR). If this was a multiple choice math test question, it would look like this:

Given the equation X + Y = Z, if the value of X is 3, what is the value of Z?

A) Z= 3
B) Z= 0
C) Not enough information is given to provide a value for Z.

The correct answer is C, not enough information. No more can be said.

-ERD50