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Possible To Retire On $600,000?
05-08-2008, 08:06 PM
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#1
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Dryer sheet aficionado
Join Date: May 2008
Posts: 32
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Possible To Retire On $600,000?
Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.
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05-08-2008, 08:09 PM
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#2
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Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
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Yes, if your $2000 per month expenses are before taxes.
Welcome to the board. You may want to read the FAQs, and look at FIRECalc to help sort things out. Rule of thumb suggests that if you play it right, you need about 25x your annual expenses to come out OK.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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05-08-2008, 08:11 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2006
Location: Collin County, TX
Posts: 9,293
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I suggest you run your numbers through firecalc, paying close attention to inflation and how your funds are invested.
__________________
There's no need to complicate, our time is short..
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05-08-2008, 08:15 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 1,183
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Yes. But if the market has a hard time... You have a hard time. The nest egg you have is really close to not having to work at all anymore for wages. Is there some way to boost it a bit and or do part-time work? I would want a little more cushion myself. Check out Firecalc here and Welcome to 72t on the Net those two are the best around to do the what if scenarios with.
I also pulled the plug at 50 and understand the desire to move on.
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05-08-2008, 08:17 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,148
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Do you have any pension coming later? Qualify for SS? What will you do for health insurance?
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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05-08-2008, 08:18 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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There is no way. Keep working or move to the Ozarks. You think it is $2k but you have not considered all your costs.
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For the fun of it...Keith
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05-08-2008, 09:04 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,863
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Quote:
Originally Posted by kcowan
There is no way. Keep working or move to the Ozarks. You think it is $2k but you have not considered all your costs.
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kcowan, do you know the OP personally? How do you know he hasn't considered all his costs?
2Cor521
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"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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05-08-2008, 09:11 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
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Sounds like it would work. In tweleve years you will have some SS. Can you make it in New Jersey on 2k a month? We can do it but we are in the midwest.
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05-08-2008, 09:33 PM
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#9
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Recycles dryer sheets
Join Date: Jul 2007
Posts: 204
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Quote:
Originally Posted by Marcretire
Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.
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check out boglehead ..there is a guy there that retired on that amount. He grew his 600000 to 1.4 mil in 10years
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05-08-2008, 09:57 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Dec 2007
Posts: 4,764
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Go for it. Heck you might die well before you blow all of that. Just remember most people think they will live to 120.
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05-08-2008, 10:14 PM
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#11
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Recycles dryer sheets
Join Date: Oct 2005
Posts: 499
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perfect for oversea deal.
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05-09-2008, 01:05 AM
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#12
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Dryer sheet wannabe
Join Date: Oct 2007
Posts: 12
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I'm about your age and have around the same amount in my retirement account but I am married. If I were single and have no mortgage, I think I could live off that money plus my projected SS income of $1300/mo in 7 years. Yes, I live in LA.
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05-09-2008, 01:12 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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Of course it all depends on your projected expenses including health care which is increasing at a rate faster than normal inflation.
600k at 4% wold yield the 2k/mo.. but I think you have underestimated your expenses.
IMHO - You need to work a few more years. Sock away a little more money and get closer (in age) to SS and any pensions you hopefully have available. In your situation, I would set a target of $1MM, and a house (that is in good shape) paid off. Perhaps you could set a goal between 55 and 59.
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05-09-2008, 01:34 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Posts: 2,670
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You need to consider the following if you haven't already:
Is $2K a month your post-retirement budget or your pre-retirement budget? They could be the same, but they could be different. If you post your post-retirement budget here it might help. Did you factor in large ticket items like car purchases, root canals, purchase of a dog, etc?
What do you plan on doing after retirement that you didn't do pre-retirement? Will it cost more? $2K a month may not leave enough wiggle room for travel and entertainment, although you might be doing activities that don't cost much like walking in the park, reading at the library, riding your bike.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
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05-09-2008, 05:16 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,148
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Quote:
Originally Posted by Marcretire
Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.
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Looks like it could work, but I'll ask the question that others are being more subtle about : How much are you budgeting per month for health care?
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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05-09-2008, 05:48 AM
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#16
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Dryer sheet aficionado
Join Date: May 2008
Posts: 32
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Quote:
Originally Posted by retire@40
You need to consider the following if you haven't already:
Is $2K a month your post-retirement budget or your pre-retirement budget? They could be the same, but they could be different. If you post your post-retirement budget here it might help. Did you factor in large ticket items like car purchases, root canals, purchase of a dog, etc?
What do you plan on doing after retirement that you didn't do pre-retirement? Will it cost more? $2K a month may not leave enough wiggle room for travel and entertainment, although you might be doing activities that don't cost much like walking in the park, reading at the library, riding your bike.
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Thanks, everyone, for your replies. What is accelerating my desire to retire is the industry I've worked in is in a state of collapse and I'm finding age an impediment in my job search (sales). I'm in excellent health and don't foresee significant healthcare costs, although I know there's no guarantee of good health. The only other added future expense would be a new car. I'm pretty much living on a couple thousand a month pre-retirement. I'll weigh everyone's advice.
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05-09-2008, 06:45 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2005
Location: Central MS/Orange Beach, AL
Posts: 9,067
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Quote:
Originally Posted by retire@40
You need to consider the following if you haven't already:
Is $2K a month your post-retirement budget or your pre-retirement budget? They could be the same, but they could be different. If you post your post-retirement budget here it might help. Did you factor in large ticket items like car purchases, root canals, purchase of a dog, etc?
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Yup, similar expenses for me just in the last few days. As discussed in another thread, had a new crown installed yesterday and my dog will have surgery next week. Poor baby might even need some treatments afterward. So you need to budget for the unexpected.
__________________
Retired 3/31/2007@52
Investing style: Full time wuss.
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05-09-2008, 07:33 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,450
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Quote:
Originally Posted by Marcretire
I'm in excellent health and don't foresee significant healthcare costs, although I know there's no guarantee of good health. The only other added future expense would be a new car.
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On that budget, I would suggest a used car
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- Hurry! to the cliffs of insanity!
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05-09-2008, 07:44 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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...or the bus.
__________________
Numbers is hard
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05-09-2008, 07:57 AM
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#20
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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You might consider working for a few more years. Your health insurance premiums will be going up and your body (more than likely) will require more visits to the doctor--so, depending on your policy, there could be more co-payments and the meeting of deductibles. I don't know if you have dental insurance, but if you need a crown or two, it's going to throw your budget way off.
The other thing, when I'm retired, I don't want to be anxiously thinking about money. I want to be able to spend on the stuff I want or need without agonizing. I don't think $600,000 will do it in a comfortable manner.
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