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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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. 
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.
$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.
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.
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.
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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.
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.
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:
[ul]
[li]Provide me at least the standard of living I’m used to now, and probably significantly better.[/li][li]Have enough size to do the above, even in the face of a couple significant market crashes/economic downturns a-la 1987 and 2008.[/li][li]Have enough spare cash to support some further “fun” buying in the future.[/li][li]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.[/li][/ul]
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.
Probably somewhere between $3M and $10M. I don’t have a good handle on healthcare. And I’m young.