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.
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.
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.
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.
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.
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.
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.
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.