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Old 07-02-2019, 03:34 PM
UnwittingAmericans is offline
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Join Date: Feb 2018
Posts: 374
Quote:
Originally Posted by Hermitian View Post
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.