How much do you need to win before you can quit your job-- forever.

[Biggirl]

The Lotto pool guy just came around asking for 2 dollars. "The jackpot is 96 million!" he says. "With my share of that," I answer, "I can probably quit when we win." He was surprised. He'd quit if he won a million.


By all the charts and graphs, me and my immediate family are solidly middle class. Being middle class in New York City seems to be a tad different than being middle class in, say, Florida (where I have family). If I won a million dollars the only thing I could do would be to buy a house and a new car. I'd have to keep working to eat. With 12 million and careful planning, I could get my house and car AND retire.


How much would you need to win to retire?

[bordelond]

Originally Posted by Biggirl

If I won a million dollars the only thing I could do would be to buy a house and a new car. I'd have to keep working to eat. With 12 million and careful planning, I could get my house and car AND retire.

How much would you need to win to retire?

Don't forget that if you've got a million dollars (or more), you can make it work for you. It can earn interest and/or dividends that might be more than what you earn working for a living now.

And barring freakish financial disaster or reckless portfolio management, the pile keeps increasing. My understanding is that even conservative money management can yield very nice sums from a large initial pot like $1 million. Others on board can give you better information ... I only know the generalities.

[Ravenman]

I'm betting (har har) that I could be quite happy with anything over $10 million, even after taxes. But I really enjoy my job, so I wouldn't retire. In fact, if I won big, I'd ask my boss to cut back my salary to something nominal so he could distribute the rest to other employees, a number of whom deserve a raise.

[CandidGamera]

I'm thinking that if I clear 5 Million after tax, I'm probably set to maintain my current lifestyle for the rest of my projected span, and have a good bit left over when I expire.

[Shagnasty]

I once figured out that a $5 million after tax payout could give me enough cash to retire, support my family, and live pretty well for the rest of my life. I could even come out pretty rich if the investments were done correctly.

OTOH, my wife's uncle won a 4 million dollar jackpot 21 years ago. He thought that he was super wealthy and lived like it and more. Now the last payment has run out and he only has a very modest house to show for it. He is 63 years old and will likely have to go on welfare to feed himself.

[EarthStone777]

Not to be greedy... but I've calculated that I need to win at least an $80 M jackpot to accomplish everything I'd want to do.

After taxes and the reductions for a lump sum payout, and after giving $1 M to each close relative and lesser sums to my close friends, I'd have $5 M remaining to set Mrs. Stone and myself up in the style to which we hope to become accustomed and still feel like I'd fullfilled my familial duties and not ignored anyone.

So $5 M after taxes would set Mrs. Stone and I up for life, but there'd be a lot of stuff I'd still regret not being able to do for my family and friends.

... rereading the OP... I'd say $1.5 M after taxes would allow us to retire, but then we'd live simply (like we do now).

[John Corrado]

$2 million post-taxes is all I need. Directly invested, and assuming a mere 5% return rate, I'd have $50,000 a year in dividends, with the rest of the return going back in to hedge against inflation.

[Dewey Finn]

I think $10 million would do it although $100 million would be very nice. You have to be conservative in estimating the return on the investments, and then you can't spend all of it anyhow. I think university endowments only spend about half the return on their investments and plow the rest back into growth. So if you could get six percent with a mixture of investments, you could spend perhaps three percent. For a million dollars, that's only $30,000 per year. Don't forget that if you're still young, you'll need to buy your own health insurance and that's expensive since you're not on a corporate plan. It might be worth continuing to work just for the benefits.

A million dollars just doesn't mean what it once did.

[What Exit?]

$3 Million:
It figured this would be a gross income of $150,000 per year for next 20.
I would probably see $100,000 after taxes. So $50k to live on and $50k per year to invest/save. I don't think I would need to work again. (Currently in late 30's)
For $5m + I don't have to think about it.

[Low Key]

I'm 23 years old (or close enough) and figure that I could probably never even have to start my first real job if I won $10mil. Instead, I would go to grad school and study for fun and see what happens. If I won say $1mil I would be able to have a mediocre job and still live quite well which I would certainly be content with. Fortunately, I don't have to worry about this because in a year I will have a degree in philosophy and I hear that I am then practically guaranteed a 6 figure job upon graduation.

[bordelond]

Originally Posted by Dewey Finn

I think $10 million would do it although $100 million would be very nice. You have to be conservative in estimating the return on the investments, and then you can't spend all of it anyhow. I think university endowments only spend about half the return on their investments and plow the rest back into growth. So if you could get six percent with a mixture of investments, you could spend perhaps three percent. For a million dollars, that's only $30,000 per year. Don't forget that if you're still young, you'll need to buy your own health insurance and that's expensive since you're not on a corporate plan. It might be worth continuing to work just for the benefits.

A million dollars just doesn't mean what it once did.

In the mid-80s, I remember that star Cleveland Browns quarterback Bernie Kosar somehow invested his $1 million dollar signing bonus from his rookie contract, and lived off the interest/dividends for a while. I'm sure he was living a middle-class lifestyle at the time, too -- no huge crib, fancy cars, etc. Not at the time, anyway.

Apparently, he was taking somewhat bigger risks with his money than what you are talking about, Dewey. It was about 20 years ago, too -- maybe the equivalent today would be living on the interest/dividends off of something like $2.5 million.

...

Re: health insurance -- seems to me that not having to make rent or a mortgage payment would more than make up what one would pay for health care. I know that there are forms of collective health care out there, too, that aren't done through employers.

[Ponder Stibbons]

Haven't really thought about it much. I'll let you know after I win the lottery.

[bouv]

One million after taxes would be enough for me to quit my job and go to grad school. I figure a good estimate is a $30,000 return, and after taxes, I don't make that much currently. $30,000/year should be more than enough to pay for grad school, considering I am sure I would get at least a little bit of financial aid being a TA and/or research assistant to a prof.

Once I had my degree, I would look to get a better job, and then back to the working world as usual, but with 30k more a year than I would have otherwise (plus, I might actualyl enjoy the job, and it might, *gasp*, be more related to what I studied than my current one.)

But to never work again? I'd say at least $5 mil, after taxes. I'd still go to grad school, cause I enjoy book-learnin', and Hell, probably go back and get another undergrad degree, too, and maybe another graduate degree! Woo, lifetime student! (I would proably stop by the time I got 30, cause by then, it's time to settle down...or in my case, move to Hawaii. )

[Bearflag70]

There's another thread around here that asks this question. IIRC, the answer was something like $2 million to achieve the US median income.

[furt]

Some days, I'd quit for free.

[RancidYakButterTeaParty]

Even if I won a million or more, I would keep working right where I'm at now. I love what I'm doing, and would go crazy without a normal routine each day.

[Biggirl]

Originally Posted by bordelond

Don't forget that if you've got a million dollars (or more), you can make it work for you. It can earn interest and/or dividends that might be more than what you earn working for a living now.

No, it could not. Even at a very generous 7% return on a million dollars ($70,000), we could not continue to live in the style we are living in right now. A fixer-upper house in stinking East New York is gonna cost $400,000-- before it's been fixed up. Believe me, I've given this much more thought than it's worth. Plus, I've got at least another 40 years in me. Not that I'd turn down a million. There's just no way I could retire on it.


For sure, a million does not go anywhere near as far as it used to.

[CandidGamera]

I would definitely not keep working if I got money to retire. I'd probably be good enough to finish the projects I was working on at the time, but I'd probably also be really surly with management, as the sole reason for my tolerance of corporate BS is my own continued financial security.

[bordelond]

Originally Posted by Biggirl

No, it could not. Even at a very generous 7% return on a million dollars ($70,000), we could not continue to live in the style we are living in right now. A fixer-upper house in stinking East New York is gonna cost $400,000-- before it's been fixed up. Believe me, I've given this much more thought than it's worth. Plus, I've got at least another 40 years in me. Not that I'd turn down a million. There's just no way I could retire on it.

For sure, a million does not go anywhere near as far as it used to.

Yeah, but you could move to Mississippi or Louisiana or Texas and POOF! -- the money buys twice as much.

I will say this, though -- having a million dollars free and clear can eliminate your rent/mortgage and car payments (presumably even in New York). That's a big deal in itself -- the money you reclaim can be invested, allowing you to at least retire pretty early, I'd think.

[D_Odds]

We've (Ms. D_Odds & I) figured that, in NYC terms, we'd have to net around $4 to 5 million. We'd invest heavily in municipals and other tax-advantaged, income-producing investments, figuring about a 4-5% yield after any taxes. $160,000 - $250,000, after taxes, per year would allow us to (a)live quite comfortably, allowing for increased expenses (thus, not enticing us to raid the investment piggy bank), and (b)allow a portion of current income to be reinvested as an inflationary hedge. We do have a slight disadvantage in that we are tied to NY for ~ another decade, so a win today would not allow us to reduce our fixed cost of living immediately.

Next question is how much one has to win in order to net $4-5 million. For that, we've figured no less that a $16 million jackpot, after present value discount and taxes.

Figures less than $4 million will allow us to aggressively push up our retirement dates to early / mid 50s, especially considering our offspring *should* be out of school by then (and if they're not, it's their problem, not ours).

[mazinger_z]

Because I want to retire wealthy like my parents and live in an affluent suburb with the good school districts and lake effect weather, I would need around $20M after tax winnings. I'm only looking at a modest 5% return on investment. I do intend to live the leisurely lifestyle.

[Kevbo]

I'm pretty sure most people think they need more money then they do....I don't just mean because of not being frugal, but also they forget expenses associated with working, and having to pay people to do stuff we don't have time or energy for because work uses up so much time and energy.

I think self and Kevbabe could live OK and happy off investment income from $1M in principal. We could live really well with $3-5M socked away.

If I were not working for a living, I could live somewhere with low cost of living, inexpensive housing, and low property taxes. Mexico would do, but even middle US could work.. Many of these places don't have much in the way of paying jobs....not a problem for rich Kevbo. Or I could buy a distressed property that I'd have time to fix up. I'd have time to do most of the work myself.

Since I don't need a job, I'd be free to choose a great house deal, without regard to a wicked commute, or likelyhood of being snowed in for a week each winter, etc. And I'd have no deadline (e.g. have to find a place before I start new job next week) so I could wait for a good deal.

And I could hit that principal and pay cash for a place. So the place will end up costing me only 30% or so of what I'd lay out by the time a mortgage would be payed off.

Next thing is that working for a living actually COSTS a fair bit of money. Just getting there costs money. I currently have to keep, insure, maintain, license, repair, and fuel at least one fairly reliable car. Most don't have time to do the work themselves. With 60 hours (counting commuting) freed up each week, I can reduce vehicle expenses to near zero. A scooter isn't fast, but hey, I now have time to get there. My office is pretty casual, but I still spend probably $500/yr. on work wardrobe.

If I didn't have to work, I could buy the fantastic produce at the farmer's market, time to cook cheap meals, and time to shop for good deals on other stuff at flea markets and garage sales. I'd have time to fix stuff that broke, and stuff I got for free because it was broke. He'll I'd have time to actually grow my own damn food, or suppliment anyway.

Entertainment: Fixing stuff is fun for me, but Fly fishing is also cheap fun. I'd have time for it. Ditto with hunting. These are both currently pretty expensive, because I have to factor in using my limited, and thus highly prized, vaction time.


I live pretty frugally now....but I can see a lot of places where I currently trade money for time.

[Incubus]

I really like Kevbo's ideas, which were things that weren't necessarily expensive, but time consuming. I find it very clever to enjoy things by virtue of having time to do them, not just being able to afford it.

I think if I landed several million dollars I would probably go back to school (since money is a big roadblock for me right now) and try for a Master's degree. Then I would probably try my luck working as a freelance writer, or maybe teach piano lessons out of my home; fun jobs where I am my own boss and decide my own hours, and have a supplementary income to ensure my lifestyle.

As for housing, I would probably buy/build a modest home somewhere where I could have my own well, and build solar panels on the roof. The idea being that I could be as financially self-sufficient as possible (so even if the money runs dry for whatever reason my living expenses would still be as low as possible).

[DanBlather]

I'd love to see someone being asked what they will do with the ONE MILLION DOLLARS!! (Dr Evil pinky to mouth) they won, and say "put a down payment on a fixer upper in Silicon Valley".

[D_Odds]

Originally Posted by Kevbo

I'm pretty sure most people think they need more money then they do....I don't just mean because of not being frugal, but also they forget expenses associated with working, and having to pay people to do stuff we don't have time or energy for because work uses up so much time and energy.

I think self and Kevbabe could live OK and happy off investment income from $1M in principal. We could live really well with $3-5M socked away.

If I were not working for a living, I could live somewhere with low cost of living, inexpensive housing, and low property taxes. Mexico would do, but even middle US could work.. Many of these places don't have much in the way of paying jobs....not a problem for rich Kevbo. Or I could buy a distressed property that I'd have time to fix up. I'd have time to do most of the work myself.

Since I don't need a job, I'd be free to choose a great house deal, without regard to a wicked commute, or likelyhood of being snowed in for a week each winter, etc. And I'd have no deadline (e.g. have to find a place before I start new job next week) so I could wait for a good deal.

And I could hit that principal and pay cash for a place. So the place will end up costing me only 30% or so of what I'd lay out by the time a mortgage would be payed off.

Next thing is that working for a living actually COSTS a fair bit of money. Just getting there costs money. I currently have to keep, insure, maintain, license, repair, and fuel at least one fairly reliable car. Most don't have time to do the work themselves. With 60 hours (counting commuting) freed up each week, I can reduce vehicle expenses to near zero. A scooter isn't fast, but hey, I now have time to get there. My office is pretty casual, but I still spend probably $500/yr. on work wardrobe.

If I didn't have to work, I could buy the fantastic produce at the farmer's market, time to cook cheap meals, and time to shop for good deals on other stuff at flea markets and garage sales. I'd have time to fix stuff that broke, and stuff I got for free because it was broke. He'll I'd have time to actually grow my own damn food, or suppliment anyway.

Entertainment: Fixing stuff is fun for me, but Fly fishing is also cheap fun. I'd have time for it. Ditto with hunting. These are both currently pretty expensive, because I have to factor in using my limited, and thus highly prized, vaction time.

I live pretty frugally now....but I can see a lot of places where I currently trade money for time.

I already own, so I could cut my mortgage expense (unless I find that I can earn more on my money than I'm paying in interest, in which case it pays to keep the mortgage).

My employee takes care of most of my medical insurance expense, plus provides group rates for life and long-term care. Those are a straight increase in personal expenses.

I save $20.00/week in MTA commute cost. However, I'll be driving much more, thus no savings and maybe an increased expense due to gas. Perhaps the additional use shortens the life of my (fully-owned) car, or increases the chance for mechanical failure.

I pay to get my shirts done at the laundry. $5.00/week savings, plus an additional $20/month in other dry cleaning costs. The house cleaner stays; now that we will be spending more time at home, we might have to increase to 2 days per week.

I often travel for work, thus most of my meals are comped. Staying at home actually increases my grocery bill, plus increases gas and electricity consumption.

Right now, I spend approximately 12-14 hours/day on work-related tasks. I now have 5 days a week to fill; entertainment expenses, even if frugal, increase. I, too, like to fish. My fishing trips are not especially cheap, but they are infrequent. In no way is increasing my time spent fishing saving me money. I do have to toss out the idea of buying a 'fixer-upper', as I neither like to do home repairs / improvements, nor do I have even a smidgen of skill at it (a lack on my part that vexes Ms. D_Odds).

I also plan for inflation. While overall inflation, as measured by CPI, has been low, college and health care costs have risen sharply (and lets not even talk about the price of gas). If living off of investment income, you have to plan to roll additional funds back into income-generating investments in order to cover increasing costs.

We could not earn, reliably, income on a $1 million net jackpot to equal our current income. We would be hard pressed to do so on $2 million. Could we live more cheaply than we do? Yes. Do I want to give up the creature comforts I've earned. Not especially. I lived very cheaply when I was in the Air Force. I lived very cheaply just starting out. I earned, the old fashioned way, my nice vacations and 35000 channels of horrible TV and so on. I'm not ready to give them up, and I can safely say the same for Ms. D_Odds. We could retire early, and in more luxury than currently planned with $1-3 million, but no way could we just walk away upon receipt of that sum.

[An Arky]

5 million net would be the point I could totally stop working. I could probably earn $100k investing fairly conservatively, after taxes. That would be living a modest, middle-class existence in this area.

[quiltguy154]

I could quit for one million, post taxes. No mortgage, no kids, no wanderlust and hate to drive. If I moved, I'd make a bundle on my current home, and could easily build a brand new one, where taxes, insurance, etc. are much lower. My present investments generate my take home pay. I already have nursing home insurance. BUTTTTTTTTTTTTTTTTTTTTTTTT I'd still like the burden of dealing with winning a mega-jackpot, just to prove I could rise to the occasion.

[ouryL]

$100,000 would be enough, if I worked regularly. $225,000 at least, to consider stop working. $500,000 to actually stop working.

[ladybug]

I think I could quit if I had $3 million, after taxes. Housing in South Florida is getting ridiculously expensive, but I'm only here for my job. If I didn't have to worry about working I'd move back to west central Florida in a heartbeat. I could pay off the mortage on my parents' new house, build a house of my own and plant a little flower garden. As long as I have a big grassy lawn, a nice shade tree and a pile of good books, I'll be happy.

[Shagnasty]

Originally Posted by ouryL

$100,000 would be enough, if I worked regularly. $225,000 at least, to consider stop working. $500,000 to actually stop working.

Your location is listed in coordinates that I can't read. Is it Afghanistan by any chance?

[interface2x]

If anyone has a spare $30,000 or so, I'd love to have it so I could quit my job and work full-time on finding a good job.

[Biggirl]

Originally Posted by Shagnasty

Your location is listed in coordinates that I can't read. Is it Afghanistan by any chance?

Hey, that reminds me. Lotto Pool Guy is from Belize. He probably could live very, very well with a million American dollars if he went back home.

[Steve MB]

I figure about 2.5 million after taxes, invested conservatively, would pay off the house and roughly replace my current income (which actually means I can plow the current amount of mortgage payments into increasing the principal as a hedge against inflation).

[Wesley Clark]

I could probably get by fine with 300k as long as I lived in the midwest and got to invest most of it.

[Lakai]

I’d actually want to continue to work. Just until coming to work at my little convenience store in a $1500 designer suit gets old. I would need $100 million so that I could pull that one off with little guilt.

[sleestak]

I figure 1.3 would do me for retirement.

1 million to invest and 300,000 for a house. Once you buy a house outright living exspenses go *way* down. If you own your house that leaves insurance (car, house and health), utilites (gas, electric, cable, phone), car payment (maybe) taxes and food.

I figure that 35,000 after taxes (being conservative on estimating the investment income, 7% rate of return with 50% tax) would be fine. My bills would run about 5280 a year (gas, electric, cable, phone. That's what they cost now) Not sure about insurance or food but I eat pretty cheap. That would leave a lot more disposable income than I have now. Plus throw in the miracle of compound interest and I'd be pretty well set.

The sad thing is my luck really sucks. I ain't ever gonna win a million.

Slee

[Little Nemo]

$8,000,000 is my figure. I'd actually work two more years until I'm eligible for a 25 year retirement (which I don't currently plan on taking). But I figure I'd have $1,000,000 to spend now on a good house, car, etc. Then I'd invest the other $7,000,000 and the interest, combined with my pension, would keep me comfortable.

[Sleel]

Probably somewhere around 1.5 to 2 million would be more than enough for anything I'd reasonably want to do. Prudent investments could increase the capital appreciably by the time I need to pay for kids' educations and still have enough to live on when I'm old enough to really retire. In the meantime, I could continue to live my semi-student lifestyle. After paying off the damnable student loans hanging over my head, I'd probably buy a few toys, but I don't really covet things that much. Probably an outgrowth of taking close to 8 years to graduate, between working at shitty jobs to get money saved for school.

[Atrael]

I also remember doing a thread like this sometime in the past.

I came to the conclusion that we'd need to win over $15 million to not have to work again.

I didn't do the math for a lump sum payment, as I'd probably not handle that amount too well. But I believe the standing figure is that you get $50,000 for each million of the jackpot. That comes out to $750,000 per year before taxes.

Figure that taxes will take about half (I'm rounding for ease, 40 percent is harder to figure out), so that leaves us with $375,000 per year. Of that amount, half would be put away into a savings account for the time after the payments were up. (I know that some could go into a tax defered type of investment, so that would lower our taxes, I'm talking broad outlines here, not exact dollars) So that leaves us about $187,000. Now I personally can't win the lottery and retire, and let my mom keep working, so figure for her yearly salary expenses, about $45,000. Same thing with my mother-in-law, add another $35,000 for her. That leaves us with $100,000 left. A little less than we make right now. While it's true that taxes have already been taken out of that amount, if we're not working, we have to be doing something. So I'm sure our leisure and entertainment expenses would be more. Not to mention travel, since I love to travel, I imagine we'd spend most of our time doing that.

Now some of the yearly bills could be lowered, if we paid off all the mortgages and such like the first year, but that would leave less to really live on, so then we'd have to keep working to meet other expenses. So....like I said...$15 million minimum. I don't even play if it's less than that.

[Shagnasty]

Originally Posted by Wesley Clark

I could probably get by fine with 300k as long as I lived in the midwest and got to invest most of it.

Now Wesley, you are a college student so I assume you are pretty young. I assume you haven't taken any finance classes yet or it is just not your forte. That is not even within one order of magnitude for a realistic answer.

[Wesley Clark]

Originally Posted by Shagnasty

Now Wesley, you are a college student so I assume you are pretty young. I assume you haven't taken any finance classes yet or it is just not your forte. That is not even within one order of magnitude for a realistic answer.

Yeah I'm young, but I get by fine with about 1000-1100/month, minus rare expenses. I think I could pull getting by with 300k if I outright owned a duplex in the midwest and only had to support myself since 300k would give me 10k+ a year or so in income after inflation & taxes and I'd have no house or car payments to spend that 10k on. I'm 26 though, not too young. But that figure is based on the assumption that I only support myself, own my own duplex and rent the other half out to someone, and manage to get my automobiles cheaply by buying and selling them correctly.

There is an entire subject on living cheaply to be free called voluntary simplicity. I can't remember the name offhand but I'm sure I've read books on people getting by fine with a next egg of 200-400k or so. Just as long as you own your own place (preferably a place where you can rent some of it out) and know how to be cheap.

[D_Odds]

Wesley, your assumption must be that any rental income you might achieve would offset full maintenance and taxes on your property. That's a fair enough assumption. However, I don't see where you factor in purchasing your own duplex. You've just doubled your needed winnings (unless you already own). You also haven't figured in future family needs - is the assumption that you'll stay single and childless valid? $12,000 - $13,300 is very, very difficult to live on anywhere in this country, even if one is debt free.

sleestak, yielding 7% annually on income-bearing investments is not conservative. 7% annual yield would be conservative with a mixed stock/bond portfolio, but that would not provide a 7% annual income on your investments (It *could*, but it would require more active investment management, which is an expense we haven't figured in - a trained investment manager managing an income-producing, capital preservation portfolio would take 1-2% of that 7%).

Atrael, your figuring is much like mine. The discount on the lump sum payments reduce the pot about 40-45% generally. NY taxes then take almost 1/2 the pot (around 47-48%). For me, $15 million should net me $4. That would be the bare minimum. I might work another ~5 years to take advantage of early compounding before I start relying on my investments for income.

[Wesley Clark]

Duplexes aren't unaffordable in the midwest. My brother's best friend bought one that used to be owned by a doctor for about 90k. Where I grew up 300k buys a 5 bedroom 3000-4000 sq ft home with 5 bedrooms. Housing is cheaper out here.

Again, the 300k figure is based on several assumptions. That I'd own my own duplex, that someone else would be a good renter and rent out half of it and that their rent would cover all taxes, maintenace & insurance costs, that I remain single & childless, that I live in the midwest and that I am able to get my cars cheaply and no major medical or legal issues come up that drain my bank account.

12-13k after taxes sounds like very little, and it is. But if you aren't paying any rent/mortgage or any car payments and you are only supporting yourself it goes alot farther. Car payments (not including gas, insurance or maintenance) & household payments are about 40-45% of the average budget.

[Shagnasty]

Originally Posted by Wesley Clark

12-13k after taxes sounds like very little, and it is. But if you aren't paying any rent/mortgage or any car payments and you are only supporting yourself it goes alot farther. Car payments (not including gas, insurance or maintenance) & household payments are about 40-45% of the average budget.

It is extremely little to start out with. It becomes completely unworkable when you figure in inflation 20 years from now. This money has to last you for life remember.

[Wesley Clark]

Originally Posted by Shagnasty

It is extremely little to start out with. It becomes completely unworkable when you figure in inflation 20 years from now. This money has to last you for life remember.

True, true. However I think 300k is possible. If you subtract taxes and adjust for inflation each year you can probably get 9k a year out of it. If you have no mortgage or car payments 9k isn't unrealistic. Technically that rental income counts as 'work' and I would do things like find really good deals on cars (30% below NADA value), drive them for a year and resell them for about what I bought them for. So I'd still be working, I'd just be a landlord and someone who buys & sells used cars. So my whole premise is probably wrong as I'd still be working and making income.

If you are talking about no rental properties, no previous home ownership and no car deals I'd probably need closer to 700k-1 million.

[John Carter of Mars]

I see one thing to question in the way most of you are figuring, and it's making the amount you need seem way too large.

You don't have to have all your money left when you cork off. There are plenty of calculators that will allow you to, for example, plug in $500,000, figure on it earning 4%, and the calculator will tell you how many months you can withdraw X dollars per month before your money's all gone. It's the same calculation as paying down a mortgage, but in reverse, as you're paying yourself. Your lump-sum money will pay you much more, much longer than most of you seem to think.
If you should screw up and live longer than you thought, you can always sell your nice house and move to a smaller one or apartment. At an advanced age, that's not a bad move anyway.

Plug in your life expectancy as per insurance acturial tables, convert that to months, figure the amount of $ you'll want per month, and you'll have your answer. In most cases, 1 Million net, plus whatever you want to spend on a house, should be plenty.

[elfkin477]

I'm fairly young, so I'm thinking of a few decades, but my tastes don't really run to the overly expensive. 3-5 million ought to cover it, even if I surprise myself by living to ripe old age.

[Paul in Qatar]

I could quite right now at some modest level of existence. This is thanks to having a nice nest egg and my Army pension. Still, what would I do? Shuffleboard?

With an additional million, I could no longer justify working.

[Sarah Woodruff]

Originally Posted by Biggirl

For sure, a million does not go anywhere near as far as it used to.

It depends on what country you're in. You could move overseas. That's what I would do. I'd move to Portugal. I'd buy a 15th century crumbling-down villa in Coimbra.

[LSLGuy]

My take has always been that you can count on $20K/year income per $1 million in headline jackpot amount.

In other words, if they advertise the jackpot is [Dr Evil voice]One Million Dollars[/Dr Evil voice], you can take the lump sum, pay all the taxes, invest the residue conservatively, leave enough earnings in there each year to have the principal stay stable against inflation + taxes on the earnings, and withdraw the then-current equivalent of $20K every year forever. That $20K figure is post-tax.

It also assumes you give zero in the way of extravagant gifts to friends / family when you first win. That particular trick will eviscerate your winnings like nobody believes until it's too late.

On that basis, given my current assets, etc., I could retire on a $5Mil jackpot but that'd be a pay cut. For $10Mil I could maintain my lifestyle plus a little for the extra spending caused by the extra free time. For $20Mil I'd have enough for totally carefree living within my current tastes. For $40Mil I can start to acquire bad habits like secret mistresses, Dom Perignon by the case, etc. For $80Mil I can support some really bad habits like 2nd wives, chartered personal jet travel, etc. More than $80Mil would be just a waste in my case, but I can hardly wait to try to waste it.


I'm basing my $20K/$1Mil ratio on fairly pessimistic investment returns vs inflation, and not much in the way of effective tax avoidance. Folks with large lumps of money can hire people who can usually achieve much better rates of return (& tax treatments) than I can now, so that may be unrealistically pessimistic.

OTOH, the folks here who think they can average 7% after inflation and taxes and transaction costs over their entire portfolio are probably smokin' somethin'. Some years yes, but probably not every one.

Finally, my $20K figure assumes you want to die with the inflation-protected principal intact. A willingness to eat into principal improves the available outflow a bunch, particularly if you're already middle aged or later.