Would you retire at 30 with $1m?

[soupcxan]

Over at another FIRE message board, people were discussing this family (two adults in mid-30s and a baby) that were theoretically retiring on $1M at 4%. Another case was a mid-20s shooting to ER at 30 with $600k @ 4%.

I said these folks were crazy for using 4% and thinking these amounts could realistically last the rest of their lives. I got downvoted to oblivion for this opinion. Am I wrong?

[arky]

I would not say it can't be done, but I would not feel comfortable in either case mentioned.

[Walt34]

Quote:

Originally Posted by arky I would not say it can't be done, but I would not feel comfortable in either case mentioned.

Same here. Way too many things can go wrong - serious illness, accident (think falling off a ladder) rampant inflation, and other unknowables.

[eta2020]

No

[growing_older]

I am too concerned about safety to attempt 4% for a 60+ year retirement myself. But I can also see how it could work if you get a favorable sequence of returns to start and are able to lower the withdrawal rate over time. As long as you are willing to semi-retire or even go back to work for a few years if markets move unfavorably, it could be doable.

My other concern is that at such a young age, the idea of fixing one's lifestyle to the current ideas seems dangerous. There's a lot of years to change your mind, but you are committed in a way that would be hard to correct. While living a bare bones frugal lifestyle might be appealing at the start, it's hard to know I will continue to believe that for the rest of my life.

[Car-Guy]

At that age, with that small amount, I wouldn't even consider it.

[braumeister]

Retire from what?
They haven't lived yet.

[scrabbler1]

Maybe a single-person household could do it, but with a family of 3 I'd say "no way."

[jim584672]

Without knowing the spending rate the question can't be answered. A frugal person could retire with $1,000,000 at 30.

[thefinancebuff]

Quote:

Originally Posted by soupcxan Over at another FIRE message board, people were discussing this family (two adults in mid-30s and a baby) that were theoretically retiring on $1M at 4%. Another case was a mid-20s shooting to ER at 30 with $600k @ 4%. I said these folks were crazy for using 4% and thinking these amounts could realistically last the rest of their lives. I got downvoted to oblivion for this opinion. Am I wrong?

Depends on the definition of retiring. If it's like MMM just switching to self-employment on their own terms the answer would be yes.

[aaronc879]

If you retire into a bull market then it's certainly possible. Equities return 9% on average. If you spend 4% and earn 9% then you should never run out of money. The risk is losing money early in retirement. It's hard to come back from that.

[Texas Proud]

When I was by myself I could live on less than $30K.... so I could have retired with $1mill and started at 3%.....

Now with DW and two kids and expenses are over $100K.... could not even come close....

[MatatuPuncher]

Quote:

Originally Posted by braumeister Retire from what? They haven't lived yet.

And that depends. Some people live boring lives. Others have spectacularly rich and fulfilling lives by age 30.

[sunsnow]

I didn't, so I guess it follows that I wouldn't. We wanted more security and income than 1M would have provided -- especially with such a long horizon.

[ERhoosier]

Utterly foolish, IMHO. The cone of uncertainty, especially for a family, is just too large.

[Major Tom]

I wouldn't have considered retiring in my 30's unless I could have comfortably done it with a 2% WR, or less. You'd have to be pretty sick of work to want to stop that early but I imagine some either get burned out, or never find work that they can at least tolerate.

[retirementguy1]

Let everyone live how they want. A lot of people misunderstand MMM's blog. I can't say I live his lifestyle but he has maintained mental and physical acuity and can return to a 40hr a week job whenever he likes and it won't take him long to make a considerable amount of money if he returns to work.

[robnplunder]

Quote:

Originally Posted by braumeister Retire from what? They haven't lived yet.

+1.

To OP - Take time off from work if you must. Leave the retirement to people who are older.

[Bikerdude]

Quote:

Originally Posted by eta2020 No

+1.

[Hermit]

I wouldn't retire on that amount at 60! (I did retire on something close, but I have a nice pension and SS.) And I live in an old motor home way up in the mountains. Very close to the idea of "living in a van down by the river."

I think it can be done, but not much room for fun, travel, or toys.