$1M acheived, now what?

R

redspot321

Dryer sheet wannabe
Joined
Jan 7, 2025
Messages
13
Location
Florida
First and foremost, thank you all for any review and replies!

About Me
  • Age 46
  • Just broke the $1M milestone
  • Asset allocation 70/30
  • $50K cash Emergency Fund

Income
His
  • $200,000 Annual
  • $48,000 VA pension
Her
  • $40,000
Total $288K

Debit / Loans / payments
  • Home paid / Utilities only
  • $0 annual Property tax (disabled veteran Florida)
  • $750/yr Tricare Prime for Life Insurance
  • $6000/yr Property Insurance
If I dont save another dime, can I retire in 9 years?
  • If I don’t save another dime, my $1M next egg wil be worth approx. $2.2M in 9 years (age55) (In todays dollars)
    • Assumptions = $1M x 9years @ 9% return
  • My annual retirement expenses will be $100,000 annually (In today’s dollars) at age 55 Spreadsheet attached
  • I will continue to draw VA pension $48,000 for life (In todays Money, adjusted for cost of living annually)
 
I'm not sure I'd count on 9% growth on average. Over 9 years, we're likely to have a recession or two. Kinda depends on the economy and how aggressive you are with your portfolio (and luck of the sequence of returns). BUT it certainly could w*rk out that way for you.

Best luck and keep us posted with your progress.

What will you do when you retire?
 
You mention your anticipated lifetime income, but what about your DW, in particular if you predecease her by a number of years?
 
How will you handle going from $288k to $100k in yearly spending?
 
Does the $100,000 annual expenses include taxes?
$48k per year guaranteed income
$52k annual investment withdrawal
At a 3.5% withdrawal rate is about $1.5mil needed to retire.

If current income is $288,000 and expenses are $100,000, invest the remainder for 3-5 years and consider retirement then. Might have enough to bridge the gap and retire earlier.
 
Koolau said:
I'm not sure I'd count on 9% growth on average. Over 9 years, we're likely to have a recession or two. Kinda depends on the economy and how aggressive you are with your portfolio (and luck of the sequence of returns). BUT it certainly could w*rk out that way for you.

Best luck and keep us posted with your progress.

What will you do when you retire?
Click to expand...
This is worst case scenario so not a whole lot built in by my annual income includes 4 trips a year and $500 month for boat expenses....I have a boat and will be on it a lot.
 
redspot321 said:
Ive paid off my $450K mortage and saved $1M...I dont spend $288K like it seems.
Click to expand...
Kinda my point. You asked if you don't save another dime... which implies you're going to spend all your income for the next nine years...which really isn't the case. It could have been, and in that case I don't think you've saved enough. How is her health insurance funded? (you've got VA backup...). Realistically you're in great shape as long as you don't actually spend all your income for the next nine years ;-)
 
SnowballCamper said:
Kinda my point. You asked if you don't save another dime... which implies you're going to spend all your income for the next nine years...which really isn't the case. It could have been, and in that case I don't think you've saved enough. How is her health insurance funded? (you've got VA backup...). Realistically you're in great shape as long as you don't actually spend all your income for the next nine years ;-)
Click to expand...
Thank you. Of course I will continue to save but its nice knowing I can bail when I want. The VA pension comes with a physical cost:confused:
 
>>Now what?

Keep going! You’re doing great.

I’d suggest you keep saving and not rely on 9% growth, but also don’t wait to begin enjoying more now too.
 
redspot321 said:
Ive paid off my $450K mortage and saved $1M...I dont spend $288K like it seems.
Click to expand...

You say in your OP that you won't save another dime - so that implies spending $288K for the next 9 years and then dropping to $100K spend in retirement. It looks like you have constructed an unrealistic forecasting scenario.

Also you should be using real return in your assumed growth rate if you want to remain in "today's dollars", so something like 6-7%, not the ~9% historical nominal performance of a 70/30 portfolio (9.2% nominal per Vanguard).

Have you tried modeling your case in FireCalc?
 
You are on your way.
 
USGrant1962 said:
You say in your OP that you won't save another dime - so that implies spending $288K for the next 9 years and then dropping to $100K spend in retirement. It looks like you have constructed an unrealistic forecasting scenario.
Click to expand...
Or I could quit my high stress job and work at Home Depot 3 days a week
 
Like others have said try using FIRECALC and plugging in numbers.
IMO you should have a much heavier equity allocation given your investment time horizon.
 
redspot321 said:
More bonds?
Click to expand...
I'm confused. No, I don't suggest more bonds; I suggest more stocks.

You're still in the accumulation phase and, barring a tragedy, you have a multi decade investment time horizon. If you plug your numbers into FIRECALC with 10,20, 30 year time frames you'll see my rationale.

That said , I'm a believer that the future will somewhat mirror past returns. Not everyone believes that.
 
redspot321 said:
If I dont save another dime, can I retire in 9 years?
  • If I don’t save another dime, my $1M next egg wil be worth approx. $2.2M in 9 years (age55) (In todays dollars)
    • Assumptions = $1M x 9years @ 9% return
Click to expand...

That 9% return over 9 years is a risky assumption. The next 9 years may produce those returns. They may produce higher returns. Or they may produce negative returns - for example, from 4/2000 to 3/2009 the S&P500 produced an average annual return of -6.5% (driven by a collapse in P/E ratio) and high-quality long-term corporate bonds produced 6.4%. Yes, I cherry-picked the dates... BUT they are real-world results and could happen again.
 
Crap the army pays good? $200k a year and a $48k pension at age 46?
 
calmloki said:

$1M acheived, now what?​

$2M

Amazing how fast that happens compared to the first one.
Click to expand...
They seem to just get quicker as you go. If we live long enough, think of the possibilities!
 
calmloki said:

$1M acheived, now what?​

$2M

Amazing how fast that happens compared to the first one.
Click to expand...
Yes, just keep going. I also would not count on the 9% being sustainable. Could happen, but not to bank on.
 
Life and markets will not always be roses, bad things can happen to derail your financial plan. You are well on your way and have a really good paying job, but are not FI. I would keep plugging away until you're there. Then, you have options.

Note that a 70:30 portfolio might return 5% after inflation, but only if you look at it over very long periods of time. There have been multiple decade-plus eras where returns were negative. Counting on 9% growth after inflation is not likely, that kind of thing has only happened after really severe downturns, which doesn't sound like the current market situation.

So my answer for someone in good health with a good job that just reached their first million and wants your level of spending is - Great!, now go for the second.
 
I'll echo what others have said, to not count on that 9% being sustainable. However, just out of curiosity, I ran my own numbers.

I hit $1M back in February of 2015. So, to make it easier, let's pretend I hit it on 12/31/2014, and didn't invest anything else. My actual returns for the following nine years were:
2015: 1.6%
2016: 8.4%
2017: 18.8%
2018: -6.9%
2019: 27.0%
2020: 13.15%
2021: 18.13%
2022: -20.51%
2023: 20.81%

So, presuming I'm doing the math right, that would have put me at $1,999,815 at the end of 2023. So essentially, right at $2M!

Actually, when you consider 2022 and 2023 almost canceled each other out, I would have actually hit $2M at the end of 2021, with a balance of $2,067,796.

After doing the math, maybe I'm not the best example of erring on the side of caution, with future predictions. But still, err on the side of caution!

Also, once you throw inflation into the mix, that $2M at the end of 2023 isn't quite as lofty. In 2014 dollars, it would've been more like $1.554M. So while I would have doubled my money in nominal terms, in real (inflation-adjusted) the gain was more like 55.4%.

Still, consider that particular timeline involved a start of two lackluster years (2015, and even 2016 didn't get good until towards the end. It also included the 2018 downturn, the 2020 Covid crash, the high inflation of 2021-2022, and the 2022 "Not-A-Recession-Recession."

So, who knows what the future will hold? I'd rather be a bit pessimistic and then end up pleasantly surprised, than pin my hopes on something overly optimistic, only to see it dashed on the rocks.
 
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