How much would you need?

[Salaryman]

Spanky, we're not quite at 5mm mark yet.
Past 1mm on our way to hopefully more in the future.
How about you?

[Webzter]

Quote:

Originally Posted by Spanky Salaryman, Are you saying that you do not have $5 million in assets. It seems that Webzter thought that you might.

No, in another thread he mentioned that he and his wife were past the $1mm mark. My only point is that, even though he stated that he needed $200k/yr to FIRE, he probably actually doesn't if he looks at his actual living expenses (as opposed to the household $200k salary).

Point being, if someone has saved $1mm on a $200k salary, then he's probably living on much less than $200k a year.

I just realized something though, I always think in terms of today's dollars and assume my allocation will grow above inflation and plan accordingly (I stay a bit conservative and plan on a 4% real return). So, Salaryman and I might not even be talking the same dollars.

[Salaryman]

Quote:

Originally Posted by Webzter No, in another thread he mentioned that he and his wife were past the $1mm mark. My only point is that, even though he stated that he needed $200k/yr to FIRE, he probably actually doesn't if he looks at his actual living expenses (as opposed to the household $200k salary). Point being, if someone has saved $1mm on a $200k salary, then he's probably living on much less than $200k a year. I just realized something though, I always think in terms of today's dollars and assume my allocation will grow above inflation and plan accordingly (I stay a bit conservative and plan on a 4% real return). So, Salaryman and I might not even be talking the same dollars.

Webzter, you really pay attention to details. You must run a tight ship at your company.

Here's our breakout percentages:

36% taxes
30% expenses
34% investments

The ratio hasn't changed much over the years.
And as it sometime made me physically ill, I did not change the investment allocation or traded on emotion.
The worst was losing 50% of the portfolio during the tech meltdown...but I digress.

The 200k year/4% of 5mm present value number is what I consider the 'safe' NUMBER.
You are correct about the future/present value assumption. For myself, I use a benchmark of 3% inflation 8% annual investment returns.

[Spanky]

Quote:

Originally Posted by Salaryman Spanky, we're not quite at 5mm mark yet. Past 1mm on our way to hopefully more in the future. How about you?

Salaryman,
No, I have a long way to go before hitting 5mm mark. My goal is only $2mm within 4 years - I hoped.

[Medit8]

I voted for 2-2.5 mill. Part of that is a tax issue. If you have US or other taxes to pay, that wouldn't be enough in my view with 2 kids to educate and a comfort level that funds wouldn't run out. I don't have that problem hence a 3% withdrawal rate of USD 60,000 is net of taxes for me. That makes for a comfortable, albeit unspectacular ER. Who could really ask for anymore than that anyway

[Webzter]

Salaryman, hope you don't mind that I trounced all over your post here. I think our situation and our planning is pretty close. And, I think $5mm is a great safe number to shoot for; I'm sure I'll end up working longer than needed just to get to a 'safer' number.

Just don't work too long if you can get out sooner ;-)

[Spanky]

Quote:

Originally Posted by Medit8 I voted for 2-2.5 mill. Part of that is a tax issue. If you have US or other taxes to pay, that wouldn't be enough in my view with 2 kids to educate and a comfort level that funds wouldn't run out. I don't have that problem hence a 3% withdrawal rate of USD 60,000 is net of taxes for me. That makes for a comfortable, albeit unspectacular ER. Who could really ask for anymore than that anyway

Your vote is very similar to my estimate. My current expenses are $40,000. After an addition of $12,000 for health care, the est. total is $52,000. At 20% tax rate, the required income will be $65,000. The required portfolio is $1.63 mil for 4% SWR and $2.15 mil for 3% SWR.

[Salaryman]

Quote:

Originally Posted by Webzter Salaryman, hope you don't mind that I trounced all over your post here. I think our situation and our planning is pretty close. And, I think $5mm is a great safe number to shoot for; I'm sure I'll end up working longer than needed just to get to a 'safer' number. Just don't work too long if you can get out sooner ;-)

Webzter, it didn't even register.
I've found that it always helped to set the bar high...it's the masochist in me.

I do hope that you and all others on this post achieve their goals of ER sooner rather than later.

Regards,