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-   -   If my bank account said $X, I would retire today. (https://boards.straightdope.com/sdmb/showthread.php?t=878067)

Hermitian 07-02-2019 10:08 AM

If my bank account said $X, I would retire today.
 
What is the minimum you would have to be given to retire today and not work another day in your life?

I am young (mid-30s), have young kids, live in a high cost of living area, and am pretty conservative about risk.

I did the spreadsheet math and my figure would be $3.3 million.

My Assumptions:

1. The investment will grow (on average) 4% a year
2. For the first year I get to withdraw $102,300 (~3% of investment)
3. Because of inflation, each subsequent year, the withdraw amount is increased by 2%, until age 65 where the increase will be only 1%, until age 75 where the increase will stop (at $189K).

I run out of money at 97.

ZipperJJ 07-02-2019 10:14 AM

$2.8 million would keep me well off until 80 ($70k/yr for 40 years).

But, I didn't factor in investments, or inflation, so I don't know. Just going off of what Today Me understands about finance :)

bump 07-02-2019 10:26 AM

$3 million is kind of chump-change in terms of long-term retirement money- it's a great starting point, but not enough to quit your day job over, unless you're already old. I mean, serious illness or some kind of major catastrophe could wipe that out pretty quickly, as could investment downturns, etc...

My guess is somewhere in the $20 million range for me.

That would give me enough to spend a couple on some fun stuff like a vacation home, as well as leave enough to live very comfortably AND hopefully not dip into the principal, even with inflation.

FairyChatMom 07-02-2019 10:28 AM

I hit 66 in January. My husband and I have worked with a financial planner for a few years, and I think we're good. But if we had another $250K in the bank, I could really enjoy my pending re-retirement.

As it stands now, we won't go hungry or have to move into a refrigerator box. But I still worry about silly little things like replacing the roof or the HVAC system or having to dig another well - all 3 major expenses we've dealt with in the last 15 years or so. Theoretically, the HVAC is the most likely issue, considering our ages, but ya never know...

Hermitian 07-02-2019 10:47 AM

Quote:

Originally Posted by bump (Post 21728213)
I mean, serious illness or some kind of major catastrophe could wipe that out pretty quickly, as could investment downturns, etc...

Isn't that what insurance is for? You should factor the cost of your insurance for how much you need yearly.

Quote:

Originally Posted by bump (Post 21728213)
, as could investment downturns, etc...

True, but if you distribute your investments and take a long view, I would think something like 4% a year is not hard to keep up. That includes downturns.

Quote:

Originally Posted by bump (Post 21728213)
My guess is somewhere in the $20 million range for me.

That would give me enough to spend a couple on some fun stuff like a vacation home, as well as leave enough to live very comfortably AND hopefully not dip into the principal, even with inflation.

Keep in mind I said this is the MINIMUM that you would need to be persuaded to quit your job, not your dream retirement package.

If $20M is really your minimum, then I am guessing you are used to a slightly more expensive lifestyle than most. That's fine, all data points are interesting.

Lumpy 07-02-2019 10:48 AM

I've been un- or under-employed the majority of my life. I can't even work full time anymore due to health problems. $20,000 per annum would be luxury by the standards I've grown used to.

Velocity 07-02-2019 10:52 AM

$2 million would do it. But I'd live overseas to make it last.

I'm 31 years old.

Lurking Quahog 07-02-2019 11:16 AM

$2 million would do it for me as well. 56 years old.

kopek 07-02-2019 11:23 AM

Assuming what I have now I will still have after the magical appearance ---------- we're just talking cash on hand in the bank from some sort of windfall. Two answers:

a) $300,000 or around that. I'm in my 60s, no kids, and for various reasons I don't expect to go past 70 by much. Given that much I could pack it in.

b) No amount; I bore too easily. I have retired several times. I could live fine off what I have, selling it down a little at a time, but I still work part time in a warehouse of all things. It is my version of a gym and I just enjoy doing crap like that too much.

enalzi 07-02-2019 11:32 AM

Quote:

Originally Posted by Hermitian (Post 21728253)
Keep in mind I said this is the MINIMUM that you would need to be persuaded to quit your job, not your dream retirement package.

Yeah, but let's face it, if you suddenly had a multi-million windfall, it would be hard to keep your spending habits EXACTLY the same. When it comes time to say, buy a new car, you're not going to be super thrifty knowing you have a million dollars burning a hole in your pocket.

Ravenman 07-02-2019 11:37 AM

I like what I do. It'd probably take like $100 million for me to check out totally, and in any case I'd be so tempted to put that money to better use than buying myself shit. (Like starting a charitable foundation or investing in research of general importance to society, both of which I'd of course have to be active in doing so that sort of violates the "never work another day in my life" part of it.)

RTFirefly 07-02-2019 12:10 PM

$2M would do it for me. 65 years old.

bump 07-02-2019 12:11 PM

Quote:

Originally Posted by Hermitian (Post 21728253)
Keep in mind I said this is the MINIMUM that you would need to be persuaded to quit your job, not your dream retirement package.

If $20M is really your minimum, then I am guessing you are used to a slightly more expensive lifestyle than most. That's fine, all data points are interesting.

I still maintain that single-digit millions isn't enough. I mean, insurance only pays so much- if you get some diseases, it's really easy to blow past your coverage. And then it's out of your own pocket.

And I wouldn't want to just make my current salary and quit working. I'd rather make significantly more and quit- otherwise I could just use that as an adjunct to my current salary and have the reassurance that with a few million in the bank, I wouldn't have to put up with any bullshit that I didn't choose to.

But to quit my job? That would pretty much, by my definition, be the dream retirement package- that's the point of the question, as I see it.

I'm 46, with a wife and two kids under 8. So I'm looking at the necessity of providing a good life for them, with wiggle room for contingencies, as well as providing for our retirements and hopefully leaving a lot for my kids.

Machine Elf 07-02-2019 12:24 PM

Quote:

Originally Posted by Hermitian (Post 21728186)
I am young (mid-30s), have young kids, live in a high cost of living area, and am pretty conservative about risk.

I did the spreadsheet math and my figure would be $3.3 million.

My Assumptions:

1. The investment will grow (on average) 4% a year
2. For the first year I get to withdraw $102,300 (~3% of investment)
3. Because of inflation, each subsequent year, the withdraw amount is increased by 2%, until age 65 where the increase will be only 1%, until age 75 where the increase will stop (at $189K).

I run out of money at 97.

If you're in your mid-30s, you've (hopefully) got a long time left to live. That's a lot of time in which catastrophes can happen, including major market collapses. Can you arrange your nest egg and spending to weather something like the Great Depression?

I'll assume you're married, and that someday your kids will want to go to college. Is $102K per year enough to live a comfortable life while also socking away for the kids' education? Most people hope to enjoy a rising standard of living as they grow older, e.g. recent college grads may be fine driving rust-bucket cars and eating instant ramen on a regular basis, but they look forward to driving nicer cars and taking their families to upscale restaurants when they are middle-aged, and maybe enjoying regular international travel when they're even older. Does your plan account for this?

Once you start getting a lot of gray hair, you may also find that you want someone else to take care of various household chores - shoveling the driveway, mowing the lawn, fixing the car, and so on. Hopefully you have budgeted for that.

Also, if you quit now, you won't get much in the way of Social Security when you finally become eligible, which means your nest egg will have to cover pretty much the entire cost of your retirement. This includes paying for supplemental health insurance, because Medicare doesn't cover everything. If you and your spouse end up spending significant time in assisted-living, the price tag could be pretty steep (if you're broke, Medicare will keep you off of the street, but from what I've seen and heard, you do NOT want to spend your final few years in a place where Medicare is footing the bill).

If my wife and I hit $4M by the time we're 55, we'll probably leave our jobs. That will provide for an acceptably lavish retirement, along with an acceptable degree of long-term financial security.

Icarus 07-02-2019 12:29 PM

To retire today and maintain my current net income and lifestyle, like other have said, $2,000,000 would be my number.

Then take Social Security at the full amount when I hit that age (hopefully those fine people in DC don't keep bumping the age up), and I'm doing even better.

StusBlues 07-02-2019 12:31 PM

$10 million is the figure that I usually cite to people as the net worth of the truly affluent, so I'll go with that.

If I had only a fraction of that, though, I'd be sorely tempted some days.

Hermitian 07-02-2019 12:40 PM

Quote:

Originally Posted by Machine Elf (Post 21728476)
If you're in your mid-30s, you've (hopefully) got a long time left to live. That's a lot of time in which catastrophes can happen, including major market collapses. Can you arrange your nest egg and spending to weather something like the Great Depression?

I'll assume you're married, and that someday your kids will want to go to college. Is $102K per year enough to live a comfortable life while also socking away for the kids' education? Most people hope to enjoy a rising standard of living as they grow older, e.g. recent college grads may be fine driving rust-bucket cars and eating instant ramen on a regular basis, but they look forward to driving nicer cars and taking their families to upscale restaurants when they are middle-aged, and maybe enjoying regular international travel when they're even older. Does your plan account for this?

Once you start getting a lot of gray hair, you may also find that you want someone else to take care of various household chores - shoveling the driveway, mowing the lawn, fixing the car, and so on. Hopefully you have budgeted for that.

Also, if you quit now, you won't get much in the way of Social Security when you finally become eligible, which means your nest egg will have to cover pretty much the entire cost of your retirement. This includes paying for supplemental health insurance, because Medicare doesn't cover everything. If you and your spouse end up spending significant time in assisted-living, the price tag could be pretty steep (if you're broke, Medicare will keep you off of the street, but from what I've seen and heard, you do NOT want to spend your final few years in a place where Medicare is footing the bill).

If my wife and I hit $4M by the time we're 55, we'll probably leave our jobs. That will provide for an acceptably lavish retirement, along with an acceptable degree of long-term financial security.

All good points, and maybe I would bump it up a little, but I am also unlikely to live to 97 as well!

Keep in mind this is a cost/benefit consideration. I don't HATE my job, but I sure wish I didn't have to do it. Not to mention the soul-sucking commute. Being able to spend the next 40+ years of my life with my family instead of my coworkers is a lot of benefit. I would be willing to trade a rung down on luxury living to do that. Others may disagree. To each his own.

Typo Negative 07-02-2019 12:52 PM

1 million. 54 years old.

MeanJoe 07-02-2019 01:05 PM

50 years old. I get the $2-3M comments but should I get that windfall I would keep working. For me the "walk away now" number would be $5-10M, preferably $10M. :-D

DrDeth 07-02-2019 01:13 PM

Just got SocSec, and i have a small pension. I'd say a "mere" $500K.

BrickBat 07-02-2019 01:16 PM

A million, plus/minus 100K, I could make it work.

IF, I don't end up being fleeced by some family members who were never very sensible with money.

Spiderman 07-02-2019 01:28 PM

Quote:

Originally Posted by bump (Post 21728446)
I still maintain that single-digit millions isn't enough. I mean, insurance only pays so much- if you get some diseases, it's really easy to blow past your coverage. And then it's out of your own pocket.

And I wouldn't want to just make my current salary and quit working.

This. With all of that free time on my hands, I'd get involved with something that costs me money. When the kids were little, I told her she could be a stay-at-home mom (with emphasis on stay at home) but she couldn't not work. There's a difference as lunch with the ladies & various kid activities during the weekday add up.

Joey P 07-02-2019 02:24 PM

Just working on the assumption that I'll live another 40 years or so, the first thought that jumped into my head is 40 million.
But, realistically, 4 million would give me 100k per year. More than enough to better than I do now, even with inflation kept in mind.

Quote:

Originally Posted by Hermitian (Post 21728186)
1. The investment will grow (on average) 4% a year

I think if I was going to retire significantly early, I wouldn't want to rely on investing. So, maybe add another million to stick in something more volitile than a regular savings account/CD. That would get me 4 million to spend over the next 40 years and a million which, if it accrues 4% per year, would be the equivalent of replacing my current weekly paycheck with a $3300 weekly dividend check.
Either one of which would get me from now until the end, but if one disappears, I'd still have the other.

But, I should mentioned that this is just hypothetical. If I suddenly had a few great stock market picks and found myself with 4 million in my checking account, I wouldn't quit work just yet.

UnwittingAmericans 07-02-2019 02:34 PM

Quote:

Originally Posted by Hermitian (Post 21728186)
What is the minimum you would have to be given to retire today and not work another day in your life?

I am young (mid-30s), have young kids, live in a high cost of living area, and am pretty conservative about risk.

I did the spreadsheet math and my figure would be $3.3 million.

My Assumptions:

1. The investment will grow (on average) 4% a year
2. For the first year I get to withdraw $102,300 (~3% of investment)
3. Because of inflation, each subsequent year, the withdraw amount is increased by 2%, until age 65 where the increase will be only 1%, until age 75 where the increase will stop (at $189K).

I run out of money at 97.

That math basically works. Hope you're considering taxes as far as what you'll net out of those withdrawals. You're going to have dividends and/or cap gains along the way.

I plugged in your numbers and got a slightly different result, not much different. But even if all of your 4% return came from qialified dividends (which you'll still have to pay some taxes on), I have your "end-year" balance peaking in year 14; after that, you're going to have to sell stuff and you'll be in a bracket where you have to pay cap gains tax too. It's going to lower your annual haul by I dunno, 7 - 8% or so. Don't forget state taxes if you have 'em.

Joey P 07-02-2019 02:37 PM

I think something else to keep in mind is that if you retire today and never work again you're going to be bored out of your skull in about a week. You should probably make sure the money you have not only covers basic living expenses but also some hobbies.

Jackknifed Juggernaut 07-02-2019 02:54 PM

I came up with $7.48 million, assuming all taxes have been paid. I assumed a return on investment of 1% more than average inflation of 3%. Of course, part of my calc is completing my child support and being 100% responsible for putting both of my kids through college.

This is all simplifying it a bit, since inflation and investment returns are far more volatile than the straight-line method in my assumption. The timing of these ups and downs can change the figure significantly.

Oredigger77 07-02-2019 02:54 PM

I'd need $6 mil to retire immediately. My wife and I are in our mid thirties and I couldn't retire without her so we'd need to replace both of our salaries. I figure 6% ROI on the portfolio and 3% inflation over the rest of my life will leave us with $180K/year forever. $10 million though would be the amount that freed me from worries so I might keep working to move us from 6 to 10.

I know Mrs. Digger would quit her job but I really enjoy what I do and it's fairly low stress so I would probably keep going even if I didn't need the money though most of my work product would be for myself once I earned that next 4 million.

doreen 07-02-2019 04:36 PM

I must be the only person here who actually wants to retire- give me $100K over what I have now and I mail in my pension application tonight

squeegee 07-02-2019 06:09 PM

Huh. I'm surprised at the popularity of $2m. I'm most of the way toward that now, age 57, and I don't consider that anywhere near enough to retire. Which sucks, because I've had cancer that stands a decent chance of returning, and I'd like to travel and enjoy life before it does. Instead I'll be punching out paychecks for probably eight more years, crossing my fingers.

Voyager 07-02-2019 07:03 PM

Quote:

Originally Posted by bump (Post 21728446)
I still maintain that single-digit millions isn't enough. I mean, insurance only pays so much- if you get some diseases, it's really easy to blow past your coverage. And then it's out of your own pocket.

Retiring at 46 would take a bit more, but I did retire at 64 1/2 with just over $2 million. 3 years later I have about as much as I started with while living the same life I lived before retiring, except sleeping later and no commute. We did pay off our house (only $150K) since we don't get a mortgage tax break anymore. (Standard deduction too high now.)

Insurance: If you take Medicare Plan F, in the Medigap coverage, you have no co-pays. A bit more but well worth it. The only non-insurance money I've paid since 65 is a few bucks every 3 months for pills. Really, really bad stuff, like dementia, could hurt, but why delay for that?
You can count in Social Security depending on when you want to start it.
Move your investments into ones that are stable and income producing, and you will generate plenty of cash to live on. Index funds are great, but as you near retirement other options can be better.
Both our kids were out of college with college loans paid off. We don't splurge, but we never did.
And you will find as you get to 70 and over your desire for stuff and expensive traveling decreases. Happened to my father and my father-in-law. Hasn't happened to me yet.
$20 million is way too much. Don't scare people out of retiring so they can give their jobs to your kids.

Voyager 07-02-2019 07:10 PM

Quote:

Originally Posted by squeegee (Post 21729228)
Huh. I'm surprised at the popularity of $2m. I'm most of the way toward that now, age 57, and I don't consider that anywhere near enough to retire. Which sucks, because I've had cancer that stands a decent chance of returning, and I'd like to travel and enjoy life before it does. Instead I'll be punching out paychecks for probably eight more years, crossing my fingers.

The best way of doing this is to talk to a financial adviser and see which investments can generate a reasonable amount of cash. Then analyze your spending.
Right now you see yourself traveling all the time, but when the time comes you will be ready for a break when you return. Also, when you travel when retired you have the flexibility of getting better deals.
We did a 6 week trip, 3 weeks driving coast to coast and back and 3 weeks in the middle in New York, eating out every night and seeing shows, and I don't think it cost more than $8k. Good deal on an AirBnB did it.
If you want to stay in suites every night, different story.

rbroome 07-02-2019 07:43 PM

Putting a single number on a complex question isn't going to help much. Especially since the OP isn't picking an age of retirement. The requirement of retiring at 30 with a family is so different from a couple retiring at 67 as to not be comparable.
FWIW-$2 million after a full working career will keep most people in a reasonable lifestyle. Of course a Great Depression or an incurable unusual disease "changes" that-but so would getting run over crossing the street or an asteroid hitting your home town. Planning for everything means doing nothing.

What I want someone to tell me is how to put a number on a defined benefit plan like social security. While one is alive the value is considerable-it will pay over my remaining lifetime almost ⅓ of my living expense. But the value drops to zero the day we both die. My bank account doesn't. Neither does the value of my house. How am I to compare the two types of savings?

To answer the OP, as I predict the future, $1M in market investments along with a normal suite of pensions (like Social Security) and appropriate insurance such as Long Term Care will keep a couple securely in the middle class for their expected lifetime. I hope. :)

doreen 07-02-2019 07:50 PM

Quote:

Originally Posted by rbroome (Post 21729350)
What I want someone to tell me is how to put a number on a defined benefit plan like social security. While one is alive the value is considerable-it will pay over my remaining lifetime almost ⅓ of my living expense. But the value drops to zero the day we both die. My bank account doesn't. Neither does the value of my house. How am I to compare the two types of savings?

I was about to ask a similar question about my pension - it will pay a set amount per year until my husband and I both die. But when people are talking about $X being enough to retire, I don't know how my pension compares to that.

Wesley Clark 07-02-2019 08:51 PM

$500,000 minimum.

At a 4% withdraw rate that is 20k a year. I'd buy my own home and put solar panels on it. Cost of living is cheap where I live so that'd cost less than 100k. Based on my current cost of living w/o a mortgage or electric bills I can make ends meet on a little over a grand a month.

So maybe 600k. 100k for the home and panels, 500k to live on.

I just hope the ACA doesn't get overturned. I like this fantasy.

squeegee 07-02-2019 10:21 PM

Quote:

Originally Posted by Voyager
Insurance: If you take Medicare Plan F, in the Medigap coverage, you have no co-pays.

I know mostly nothing about Medigap, but wiki informs me that Plan F sunsets next year in 2020. What do us non-retirees do after?

PS: like many people, that's mostly why I'll keep working for eight years: health insurance. Congrats to you Medicare folk, wish I were there.

doreen 07-02-2019 10:37 PM

If my bank account said $X, I would retire today.
 
There are something like 10 different Medigap plans - the main difference between G and F is that with G , you still have to pay the Part B deductible of $185 per year. That coverage is the reason that new enrollments won’t be allowed in C and F - the law specifically prohibits new enrollments in plans that pay the Part B deductible.


Sent from my iPhone using Tapatalk

Hermitian 07-03-2019 08:44 AM

rbroome my intention was not to ask what is the right answer for everyone. I was asking what is the right answer for you?

Maybe I should have put this in my OP, but imagine a Genie pops up and says "I will will give you $10M if you quit your job today and retire. Will you agree to that deal?" You say "Yes!" Then he turns around and says, "Hm, maybe only $9M." He keeps going lower. Would you would still retire at $9M, then $8M, then $7M....? When is the lowest number?

I find it interesting that the number is very different for everyone because of many different factors. Age, responsibilities, cost of living, lifestyle, boredom, how much they hate/love their work or commute.

It is interesting to me that some people would still work if they were handed 4, 5 or even 10 million. While others wouldn't even bother to pick up the phone and tell their employer goodbye.

Isosleepy 07-03-2019 08:53 AM

I like my job, and no genie would get me to quit. But that could change. If my job were to get sucky, 8.2M would do it. If it gets really, really soul-destroyingly sucky, whatever I have at the time will do it. Early fifties, me.

bump 07-03-2019 09:00 AM

Quote:

Originally Posted by Voyager (Post 21729300)
$20 million is way too much. Don't scare people out of retiring so they can give their jobs to your kids.

I'm just trying to think of what it would take for me to quit working. I don't think it would be just a mere continuation of my current lifestyle; I'm young enough to expect to continue to make more money through the remainder of my career, and I also expect that if I was to come into some kind of windfall (that's effectively what we're talking about here), some proportion would go toward "fun stuff"- new vehicles, home renovations/new home, some sort of travel fund, college funds for my children, etc...

Then, what's left over would need to do the following:
  • Provide me at least the standard of living I'm used to now, and probably significantly better.
  • Have enough size to do the above, even in the face of a couple significant market crashes/economic downturns a-la 1987 and 2008.
  • Have enough spare cash to support some further "fun" buying in the future.
  • Enough to do all of the above without substantially dipping into the principal. My thinking is that this sort of windfall money isn't for ME; it's for the family. And as such, it would need to be something that could be passed down substantially intact, even after my wife and I's immediate wants and desires are taken care of.

It's the second and fourth bullets above that warrant such a high number. My goal wouldn't be to time it exactly so that I made my current salary and my bank account hit $0.00 the moment I gasp my last. Rather, it would be to have enough money to do what I want to do in the style I'd like to do it in, AND retain the vast majority of the fortune in some kind of trust(s) for descendants.

Ruken 07-03-2019 09:04 AM

Probably somewhere between $3M and $10M. I don't have a good handle on healthcare. And I'm young.

Nava 07-03-2019 09:12 AM

I enjoy my job enough (even when I hate the specific people or company involved) that I wouldn't want to drop it unless it was for a large enough amount that I could afford to completely change careers instead; there's also the issue that left to my own devices I tend to end up becoming more and more closed-up, so having stuff that requires me to get out of the house (not just stuff why I should get out of the house) is good for me. If I had enough to retire... I'd just keep working. The amounts I'd need to be able to switch to the kind of "ok peeps, don't bother ask if I'll be in on Saturday cos I'll be in the other end of the world" stuff I'd want to try are in the lots of millions range.

corkboard 07-03-2019 01:08 PM

My wife and I are in our early 50s and have the goal of $10M in our investment portfolio by the time we're 60. It's within reach. We chose that number because once retired, we want to make sure we have enough to help out some family members who need it, make nice donations to charities that are important to us, and live a very nice lifestyle. We'll also obviously have more free time to live that lifestyle, start (possibly expensive) hobbies, and have more than enough to cover any medical issues that arise for us and our kids.

But if a genie offered us a windfall today to retire, the number would probably be higher because we'll have almost 10 extras years for it to last.

carrps 07-03-2019 01:13 PM

I retired at 62 with a combined retirement lump sum plus a 401K balance that added up to about $1.75M. I'm single with no kids, and the mortgage was paid off within the first year of retirement. It's been five years. I started taking SSN about a year and a half ago. Fortunately, I had continuing medical coverage after retirement and pre-Medicare that I only pay around $200 a month for (and it includes dental and vision). All these factors pushed me to retire when I did. Also, I was HATING my job the last couple of years, I was commuting 40 miles ONE WAY to work and getting up a 4:30 am to avoid the worst of the traffic. Plus almost immediately after I told my boss I was planning to retire, the company announced they were out-sourcing the entire department. I was pissed that they said if you'd declared for retirement, you weren't eligible for the severance package. PISSED. Because my boss had to know what was going to happen. In any case, the formula used to calculate my lump sum payout was subject to a situation (I don't remember the specifics now) that meant I'd get more money in almost exactly the same amount that the severance would have paid, so I didn't mind as much as I did originally (this situation hasn't applied before or since -- just good timing for me).

I told my money guy that I wanted very conservative investments -- even though he convinced me to take a small percentage and put it in slightly more volatile/higher paying investments -- and I'm still living off my principle.


So, if asked this question at that point, I'd probably have insisted on something around $2M.

Ludovic 07-03-2019 01:35 PM

The number where I'd stop everything I was doing and retire would be $1.5 million. I've observed that my psychological sweet spot is 15+ hours of work a week: at that amount of work or below my brain is a lot happier. In my adult life I've only been unemployed for 6 or so months and it felt just as good but not significantly better than when I was underemployed. So if I had the million+, I could continue to work any old part time job and still have enough money to live on after interest.

Misnomer 07-03-2019 01:45 PM

I'm 47, single, no kids: ideally, $7M. That's my current salary for the next 40 years plus the cost of buying a nice place (I'm a renter). Effectively, I want my current salary in income without a monthly rent/mortgage payment. That would nicely cover my hobby-related expenses while still letting me travel and basically do whatever I want. If I have "extra" money and decent health in my late 80s, it'll help pay for a good retirement home.

But I'd do it for $5M.

Voyager 07-03-2019 02:15 PM

Quote:

Originally Posted by squeegee (Post 21729542)
I know mostly nothing about Medigap, but wiki informs me that Plan F sunsets next year in 2020. What do us non-retirees do after?

PS: like many people, that's mostly why I'll keep working for eight years: health insurance. Congrats to you Medicare folk, wish I were there.

Medical coverage is a big issue. I looked at ACA coverage, and it was not very satisfactory, so I scheduled my retirement to be covered by COBRA until Medicare kicked in. I didn't look at various group policies I qualified for.

Voyager 07-03-2019 02:25 PM

Quote:

Originally Posted by bump (Post 21730106)
I'm just trying to think of what it would take for me to quit working. I don't think it would be just a mere continuation of my current lifestyle; I'm young enough to expect to continue to make more money through the remainder of my career, and I also expect that if I was to come into some kind of windfall (that's effectively what we're talking about here), some proportion would go toward "fun stuff"- new vehicles, home renovations/new home, some sort of travel fund, college funds for my children, etc...

Then, what's left over would need to do the following:
  • Provide me at least the standard of living I'm used to now, and probably significantly better.
  • Have enough size to do the above, even in the face of a couple significant market crashes/economic downturns a-la 1987 and 2008.
  • Have enough spare cash to support some further "fun" buying in the future.
  • Enough to do all of the above without substantially dipping into the principal. My thinking is that this sort of windfall money isn't for ME; it's for the family. And as such, it would need to be something that could be passed down substantially intact, even after my wife and I's immediate wants and desires are taken care of.

It's the second and fourth bullets above that warrant such a high number. My goal wouldn't be to time it exactly so that I made my current salary and my bank account hit $0.00 the moment I gasp my last. Rather, it would be to have enough money to do what I want to do in the style I'd like to do it in, AND retain the vast majority of the fortune in some kind of trust(s) for descendants.

As for point 2, if you diversify adequately you can take money out of cash and bonds during a downturn, and preserve equities until they go up again. I bet you are more aggressively invested now, but that is something worth changing if you plan to retire on it.
As for 4, I'm lucky in that neither of my kids needs any money from me, and what they get in 30 years when I kick off probably won't affect their lives much. The money we got from our parents, hardly gigantic, when right into savings. Targeting 0 left is not a good plan since you might screw yourself by living too long.
You need a lot more than $2 million to be sure, since you have college expenses and longer to live off it. But if you have enough money you get access to better investment classes.
The other thing to count is maintenance expenses, like a new roof or new pipes. (ouch). But those are trivial when you have even $5 million. It is a bit scary when I make more money from investments in a month than my yearly salary when I started to work. Which was a good salary.
Sure anyone can overspend for fun - look at Nic Cage. So if you want to spend every night in a penthouse, the answer has to be an infinite amount of money.

RickG 07-03-2019 02:47 PM

I am 55. My Social Security full retirement age is 67, but it's unlikely I will be able to work that long, because I have a degenerative retinal disease and am already legally blind. That means I could go on SS disability at any time and get something between the early retirement benefit and the full retirement benefit at any time; the disability benefit includes Medicare. That would replace about 1/4 of my gross income. Using a rule of thumb that one should have 30x the income you want to replace, I'd need another $3 million in savings. My wife is a teacher with about 6 years to go to retirement, at which point she'll get about 75% of her current salary as a pension. Add another million to replace the difference there. So call it $4 million to maintain our current lifestyle in perpetuity. Much less if we're ok with dying as the last dime is spent.

Not happening soon, in any case.


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