What is your magic retirement number in US$ dollars?

[SecondCor521]

2Cor521,
Thanks for listing your expenses -- they are low. Keep it up. Take care.

Spanky

Thanks for the kind words.

2Cor521


Edited for typo.

 

[bright eyed]

$2 million - in 20 years...so that # might go up, but that is not accounting for anything besides investments/retirement - no ss etc...not counting on that!

will reassess that # in 10 years or so...

 

[Spanky]

Actually, it's not all that funny. I like my job and while there are days that I can't wait to retire, there are also days where I figure "What's the rush?" Anyhow, this is a terrific forum regarding money management, life strategies, life philosophies, conventional and unconvential wisdom, etc. (Don't tell anybody, but this is my favorite website).

If you enjoy your work and have plenty of time to pursue your other interests/hobby, there is no harry - agreed.

This is the site I often visit in addition to the Bogglehead and Diehard forums.

As to the question re: the magic number. The magic number keeps increasing: $1.5million originally sounded great, then $2million sounded a whole lot better. $2.5million should completely shut me up. But, the stock market is going to have to go on a real tear to get me there.

I guess there is no magic number. We just need to identify or forecast expenses required to support our lifestyle and unforeseen expenses and multiply that number by 25 (or higher) to arrive a number based on the assumption that our portfolio is properly diversified to achieve a return at least 3 or 4 % over inflation.

 

[tednvon]

Hi....looks like 1.2 mil in two years... partially retired now, fully in Oct, 2009...Budget will be about 5K month/no debt with both spouse and I collecting full Social Security (she at 62 and me at 63), and about 7k/year for a while from part time work at the golf course, and some high school officiating....good old Firecalc (70% equities in index funds) and www.i-orp.com say we sailing clear....
Thanks again to this board!!

Ted

 

[nun]

Update:

For the three months ending today:

Mortgage Interest + Taxes + Kids + Child Support represent nearly 84% of my expenses.
Annual run rate on the rest is about $10,671. 25x number is thus $266,772

2Cor521

Housing (mortgage, insurance, taxes) cost me $36k/year, but $18k of that goes towards principle and I have 10 years left on the mortgage. Other expenses run at $1k/month or $12k/year.

 

[milmoose]

$22.4M in 2039 dollars, which equates to $7.5M in 2007 dollars with a 3.5% annual inflation rate.

- M

 

[Tommy]

I think a consideration in the magic number is whether the money is pre tax or post tax. If it's pre tax the 4% withdrawal is subject to a bigger income tax bite than post tax.
That means the spending power of the 4% is reduced.

Another realistic reduction to the 4% withdrawal is money that needs to be alloted for replacement costs.
Quicken and Microsoft Money can track spending from month to month but what about that month when its time to buy a new car.
Expenses for that month can rise from $4000 to $29000.

It's probably best to build long term expenses into a monthly budget. Maybe 5-10% for auto, home repairs, uncovered medical or dental bills.
They do come around every so often.

 

[chinaco]

I think a consideration in the magic number is whether the money is pre tax or post tax. If it's pre tax the 4% withdrawal is subject to a bigger income tax bite than post tax.
That means the spending power of the 4% is reduced.

That's why you see so much discussion about taxes and tax efficiency on the board (on the income and gain side). The same goes for sales/backend taxes. Total Taxes are probably your largest single recurring expense... or close to it.

 

[USK Coastie]

What ever I've got on July 1, 2007. Cause thats when I retire

 

[Milton]

What ever I've got on July 1, 2007. Cause thats when I retire

So ... your plan is to retire at a particular future date, regardless of your financial situation? Seems rather arbitrary to me. There must be more to it that that, surely?

 

[Sarah in SC]

I was just having this conversation with my two bosses. The 71 yr old, won't retire one says, you'll need at least 2 million to retire, and in fact, why don't you talk your husband into working past 65 to 68 to boost your nest egg. The other, younger one says, well you'll need $70k a year, so at least a million, but maybe not 2.

I said thanks, but DH is retiring in 6 years, at 50, and I'll follow him out the door as soon as our investment assets hit $750k, as our expenses are around $30k a year.

Ah, nothing like working in the land of high net worth folks, with expenses to match!

Sarah