all you need is ~600K by age 50 to retire

[kgtest]

Many, if not the majority of middle income families in the U.S. live on this amount or less. They even pay social security taxes and income taxes on this income. Retirees whose primary income is from social security pay neither income taxes nor FICA. Medical expenses that are not affordable are often written off by hospitals. Not saying this is a generous income, but if you aren't supporting children, and own your home it is quite livable and comfortable.

totally rational. I pay anywhere between 10-20% in income taxes. Plus another 20-30k/annually on child-related costs. If you position yourself to own your car's and home I think it's doable.

I would need to cut out my $10,000 in annual vacations and $10,000 in annual fun money but the 2 of us could do it. I bet I could live on half that if I had no debt and 600k, still room to wiggle.

Hopefully at 50 I have 2-3x that much, which means my retirement should be 2-3x better right?

 

[daylatedollarshort]

Yep. And it rubs me the wrong way when I see a thread title like "All you need is ...", as if I'm being told what my acceptable lifestyle should be. That may be part of the reason for some of the other responses too. If the OP wants to live that way, fine by me, though I agree with the points about factoring in inflation.

He is just using the generic you - "The generic you is primarily used as a colloquial substitute for one." I didn't read it at all that he was telling others what to do or not to do. I thought it was a good discussion topic.

 

[Bestwifeever]

The generic you should run your numbers through FIRE calc. And realize you or your spouse is going to pass away at some point, leaving the other with only two-thirds the SS you might start with.

ETA: I actually ran the OP's numbers: $600k nest egg, annual expenses of $46800, expected to last 40 years. FIREcalc says:

...The lowest and highest portfolio balance at the end of your retirement was $-5,038,843 to $2,393,853, with an average at the end of $-1,946,888. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 40 years. FIRECalc found that 94 cycles failed, for a success rate of 12.1%.

 

[audreyh1]

+1 Since the OP seems content to limit his spending to his $46,800 of annual SS once he reaches 67, the money is needed only to bridge the 17-year gap from retiring early at age 50 until SS begins at age 67. Assuming that investment returns were equal to inflation (real returns were 0%), he would need $796k for his plan ($46,800 * 17 years from 50 to 67).

I just can't imagine retiring at 50 with the plan to spend down all of my savings just in time to for social security.

 

[audreyh1]

Many, if not the majority of middle income families in the U.S. live on this amount or less. They even pay social security taxes and income taxes on this income. Retirees whose primary income is from social security pay neither income taxes nor FICA. Medical expenses that are not affordable are often written off by hospitals. Not saying this is a generous income, but if you aren't supporting children, and own your home it is quite liveable and comfortable.

Sure, and they don't expect to retire at 50 and before children have left home.

 

[Fermion]

I just can't imagine retiring at 50 with the plan to spend down all of my savings just in time to for social security.

I can't imagine working until 65 and dying of a heart attack at 66, but it happens.

 

[Free bird]

America is the land of excess. Barely surviving to some is the lap of luxury to others. Some people practically sell their souls to pile up enough resources to head off every carefully calculated financial scenario. The land of excess where people can't discern the difference between need & want. People buy a $40k lawn mower to mow the average yard. People buy diesel trucks that tow 20k lbs to tow a golf cart. People buy a 10k sq ft house for two people to live in. The more people have the more insecure they become. America the land of plenty but no one can agree on what someone's fair share is so no one really wants to pay for anything. What's the right amount? Anyone that says they know is lying. The popularity of this thread illustrates it's just an opinion.

 

[dvalley]

^ x2 Free bird.

 

[Nature Lover]

Jumping back to OP's question...

The question asked is "what is the minimum?”. The answer, of course, is “that depends”.

In the discussion around “how early can I retire?" or "what is the smallest nest egg needed to RE?”, what's common among early retirees is that we all generally want a "safety net" of some sort when we take the leap. There are a multitude of ways to increase resources or reduce/eliminate expenses as during retirement...and that flexibility, as our safety net, is one of the keys to many retiring early. Options include, but are not limited to: starting a business, working part-time for pay or trade, bartering, doing without (where possible), changing location/lifestyle, or other strategies to reduce expenses. If one’s accessible safety net is strong and you are willing to use it, and you have a good estimate of expenses, then a smaller nest egg might work. Clearly, many early retirees actually do this to retire early (earlier)….and are flexible enough to adjust/re-tool along the way. (Some even implement various safety net strategies into their new life from the start, to give themselves a real-time cushion).

On the other hand, if by “retirement” one means never having to work or perform services in exchange for money or other resources again, and never having to do without the essentials (however you define them), then it’s important to ensure you have a large enough income stream/nest egg to include the cushion before you retire.

So, if you have a good and easily accessible safety net strategy and are willing to use it, $600k - $800k might be good enough to RE with $3,900/mo expenses. It just depends on your circumstances and your safety net.

 

[Letj]

America is the land of excess. Barely surviving to some is the lap of luxury to others. Some people practically sell their souls to pile up enough resources to head off every carefully calculated financial scenario. The land of excess where people can't discern the difference between need & want. People buy a $40k lawn mower to mow the average yard. People buy diesel trucks that tow 20k lbs to tow a golf cart. People buy a 10k sq ft house for two people to live in. The more people have the more insecure they become. America the land of plenty but no one can agree on what someone's fair share is so no one really wants to pay for anything. What's the right amount? Anyone that says they know is lying. The popularity of this thread illustrates it's just an opinion.

+1000

 

[rothlev]

Sure, and they don't expect to retire at 50 and before children have left home.

Actually they can, and they do. Some people retire early on social security disability between 50 and 60. Social security seems to be a tad easier on this age group. Sometimes one spouse is still working. In the OP's question he has money to live on until social security kicks in. I am doubtful that this is anything but a hypothetical question.

Again, not saying these folks are rolling in dough. But to answer the OP's question, it is doable and it is quite comfortable for most. Some households do it by living in a multigenerational house. Used to be the norm, but seems to be coming back. Many early retirees have a paid off home, again no children to support. The OP was not factoring his children in the question. I don't know why. I am answering the question he asked.

This amount ( $3900 a month) is a normal and even above average retirement income.

Does he want to live on it? I don't know, I only know most people do. Do I want to live on that amount. ? No, I don't want to pinch pennies anymore. I did that my whole life.

 

[Lakewood90712]

I can't imagine working until 65 and dying of a heart attack at 66, but it happens.

Up until around the 1980's , that was the plan for social security, then those darn doctors started extending the lives of very sick people.

 

[Fedup]

Actually they can, and they do. Some people retire early on social security disability between 50 and 60. Social security seems to be a tad easier on this age group. Sometimes one spouse is still working. In the OP's question he has money to live on until social security kicks in. I am doubtful that this is anything but a hypothetical question.

Again, not saying these folks are rolling in dough. But to answer the OP's question, it is doable and it is quite comfortable for most. Some households do it by living in a multigenerational house. Used to be the norm, but seems to be coming back. Many early retirees have a paid off home, again no children to support. The OP was not factoring his children in the question. I don't know why. I am answering the question he asked.

This amount ( $3900 a month) is a normal and even above average retirement income.

Does he want to live on it? I don't know, I only know most people do. Do I want to live on that amount. ? No, I don't want to pinch pennies anymore. I did that my whole life.

Your post is why I don't understand why people keep pushing for universal income or universal health care. We already have it through SSDI.

 

[Fedup]

Up until around the 1980's , that was the plan for social security, then those darn doctors started extending the lives of very sick people.

No kidding. I know two old geezers, 93 and 96, 30 years ago they didn't think they would live past 60.

 

[pb4uski]

The generic you should run your numbers through FIRE calc. And realize you or your spouse is going to pass away at some point, leaving the other with only two-thirds the SS you might start with.

ETA: I actually ran the OP's numbers: $600k nest egg, annual expenses of $46800, expected to last 40 years. FIREcalc says:

...The lowest and highest portfolio balance at the end of your retirement was $-5,038,843 to $2,393,853, with an average at the end of $-1,946,888. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 40 years. FIRECalc found that 94 cycles failed, for a success rate of 12.1%.

Did you input the OPs SS beginning at age 67? I suspect not and that is why the success rate is so low.

 

[pb4uski]

I just can't imagine retiring at 50 with the plan to spend down all of my savings just in time to for social security.

Me neither and I certainly would not recommend it, but let's face reality that many Americans our age will be retiring with no other income sources other than social secuirty and it is doable.... my dear departed grandmother being an example (in her case because she was a low earner and saved but gave her money away to her kids because SS was more than what she needed).

 

[pb4uski]

No kidding. I know two old geezers, 93 and 96, 30 years ago they didn't think they would live past 60.

In his waning days I visited DW's dear uncle who was a "the life of the party"-type and he told me, "pb4uski, if i had know that I would live to be this old I would have treated myself a lot better". We had a nice chuckle over that.

 

[audreyh1]

Me neither and I certainly would not recommend it, but let's face reality that many Americans our age will be retiring with no other income sources other than social secuirty and it is doable.... my dear departed grandmother being an example (in her case because she was a low earner and saved but gave her money away to her kids because SS was more than what she needed).

Sure - but they tend to wait until SS is available and Medicare has kicked in - or will very soon.

 

[pb4uski]

True... they didn't retire at 50.

 

[1-31-18]

Sure, and they don't expect to retire at 50 and before children have left home.

Bingo!

So the OP wants to ER in 13 years and draw down on a $600K port, exhausting it just in time to start drawing on SS at age 67.

Here is a short list of things that can go wrong with that plan over the first 17 years, never mind 30 or 60:
-- inflation (a certainty, not a risk, over that period)
-- entitlement reform (highly likely over 30 years)
-- special snowflake children
-- boomerang children (1 in 3 return home)
-- divorce (ending more than 1 in 3 marriages)

Given these risks and others I'm skipping for brevity, is it "possible" that $600K will bridge 17 years starting in 13 years and that SS will fully fund up to 30 years (or more) for OP and DW beyond that? Yes, just as it is "possible" that a man on a motorcycle can jump 16 cars and not crash on landing, at least sometimes.

But I'm not Evil Knievel, so I wouldn't take the risk of falling short or landing hard, nor would I expose my DW to those risks. Not if I were 50 years old and in good health, or even fair health.

 

[1-31-18]

My parade of horribles was meant to cover the first 13 years, not the second 17. (Typo.) If I might use another analogy, I fear that the OP is planning to win by drawing an inside straight, which can happen but is not high-percentage poker. And the consequences of drawing the wrong cards in this game are pretty severe (for at least two people).

 

[Bestwifeever]

Did you input the OPs SS beginning at age 67? I suspect not and that is why the success rate is so low.

Good point. I just plugged his numbers for nest egg, annual expenses, and length of retirement in the generic "start here" box at the lower right of the FIREcalc opening page--no option there for inputting more.

 

[jkern]

I guess my definition of "comfortable middle class standard of living" is different than yours. I don't know anyone who spends a quarter million every 10 years just replacing and buying new things.

It sounds like a lot, but after tracking the non-routine spending over the last 25 years, that is the average. It also includes things like college for the kids, remodeling the house, weddings and all kinds of other stuff. While some of these will not repeat, I'm sure there will be other things (possible medical) that will replace them.

 

[Packman]

Great thread!

I will never forget that my father retired at 62 on SS alone with almost nothing in the bank. My mother never worked outside of the home and they banked most of her spousal SS check. They taught me two lessons - 1. a couple can live on that amount of income, 2. I didn't ever want to live on that amount of income.

 

[Gumby]

Good point. I just plugged his numbers for nest egg, annual expenses, and length of retirement in the generic "start here" box at the lower right of the FIREcalc opening page--no option there for inputting more.

I just ran his numbers ($600k portfolio/$46.8K spending/40 years) and added social security of $45000 per year beginning in 17 years. The success rate is 51.4%