First, only live another 30 to 35 years. Second, kids have graduated and have good jobs. Third, medicare. Fourth, own 3 Teslas that will last the majority of your remaining time. But definitely aiming higher than $2M.
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How much $ to retire and how to fund your lifestyle in retirement
- Thread starter dl003
- Start date
Everyone's needs in retirement are different. I plan to retire with a family of 4 at about 3 million. We drive a 15 year old car, cook most of our meals, don't travel much, are generally low waste and frugal. Our main cost is our Seattle house.
Edit: we also plan to home educate and will leave paying for college up to our kids if they think it's a good use of resources.
Pezpunk
Active Member
your main cost is going to be health care, even if you're healthy. :/
i could do it easily (family of 4). However my number is closer to 3M as I want to live very comfortably and have some cushion.
The vast majority of people will be retiring on a lot less 2M.
Samething here, was happy to tell my financial advisor when I had reached 2M. That was my original goal, but he said it’s minimum 5M to live on a $125,00 annual income and invest the remaining $125,000 for an always growing family thrust. His estimates was 5% average interest rate with a conservative portfolio, so $250,000 interest annually, $125,000 to live and $125,000 for investments for constant growth.
Here in Canada college schooling is not really that expensive, no health insurance needed because of universal healthcare however the 53% tax rate is making it hard to have some money to invest in the first place.
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OT,
Have you checked out Kelowna BC areas? That's where I'm headed eventually. Lakefront property is $2-5M (CND). Not an island, not even large. Just a place for a small sailboat or BEB is all. But that's just the home cost, so point well taken on $2M being overrated.
Elon did actually live on $1 per day and so figured $30/month shouldn't be too hard to make no matter what. It's the moment I think he realized how money wasn't the issue. I had my share of tent and car living, but somehow I didn't draw the same conclusion about money yet it seems.
Good for you. Unfortunately I fail all the above criteria. and some by a long shot. Youngest just starting High School. only have 1 tesla, and 20 years to medicare...
Not at 45 years old. Health insurance alone is going to be killer... Besides I'm not ready to sell most of my TSLA yet, so there's also that problem
Most people in the US live on far less than 4% of 2 million. Not saying I want to but people do it.
Congo Line
(not the dance)
Having the socialized medicine makes a huge difference. In the US, we get that (Medicare) starting at age 65, but trying to retire before then means paying health insurance premiums at anywhere from $750 to $1200 a month depending on family size and type of health plan.
TSLA gains over past year boosted my savings to north of $5M, and mortgage already paid off. Thanks to those spectacular gains, my retirement plans moved forward in time by 5 years or more. But since bonds pay next to nothing and equities are so volatile recently, I don't feel safe retiring until another 5 years from now, with the hope that by that time TSLA shares up at least 1.5x (if not more) and thus will be much better positioned to cover any health insurance and out-of-pocket deductibles.
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Good for you. Unfortunately I fail all the above criteria. and some by a long shot. Youngest just starting High School. only have 1 tesla, and 20 years to medicare...
Not at 45 years old. Health insurance alone is going to be killer... Besides I'm not ready to sell most of my TSLA yet, so there's also that problem
With Obamacare health insurance wouldn’t be too bad, at least in my area.
And why sell all of your TSLA, wouldn’t want to pull much more than $100,000 per year to live on if you want it to last.
of course if TSLA keeps going up substantially like everyone here predicts, you would be able to spend a lot more.
adiggs
Well-Known Member
We've got another thread in this area talking about this topic. A big part of this is the definition for lifestyle that you're looking for. A funny thing about income and lifestyle - the latter tends to grow to the former. There are people that are broke on $500k/year income, and there are people saving like crazy on $100k/year. Obviously the $500k/year household has more opportunities (travel, savings, car expense, ..), but that may or may not make them happier.
If you're looking for a $500k/year lifestyle, then $2M is not gonna cut it (or even be close). You'll be taking a lot of risk as you'll need a 25% annual gain for your portfolio to be flat.
But if you're looking for an $80k/year lifestyle (which is still better than the median in the US), then the 4% withdrawal rule of thumb has you covered at a $2M portfolio.
Me personally, I've found that our household will have a very nice lifestyle on a $4M portfolio with 10+ years to go to medicare. And buying back my time is more valuable than another $1-6M in the portfolio. That's me / my household; every body else's context is / will be different.
Look up mr. Money Moustache. You probably won't like the answer, but it's a answer. In summary, live in a fairly cheap location, bike everywhere, be outlandishly frugal otherwise. Travel is fine, if you do it in your $10K used small wagon car.
Most purple are very much not ready for this, but probably would be happier, healthier and live quite a but longer if they could pull it off.
It looks like the guy couldn't hold it anymore and gota model 3
You can retire and live well with far less than $5mil. But we are not ordinary people, we are TSLA investors. Preferably for us, when we retire we will have enough cushion in our net worth that we can continue to invest in TSLA. So, for example, if your goal for a retirement account is $5mil, you shouldn't retire until you have at least $7mil, which would give you plenty of runway to keep investing, even during market downturns. If you retire just when you've hit you're target retirement amount, you will likely be too cautious about investing any substantial amount of that anymore in a single volatile stock.
Why continue to grow your assets even after you've hit your retirement target? Because unlike working, investing in TSLA is easy and fun, and the gains you make can be used for charity, the next generation, personal splurges or pursuing activities of interest. Trust me on this, you will find it valuable.
Why continue to grow your assets even after you've hit your retirement target? Because unlike working, investing in TSLA is easy and fun, and the gains you make can be used for charity, the next generation, personal splurges or pursuing activities of interest. Trust me on this, you will find it valuable.
I can do you one better. Go to the following link and put in your assumptions and your current liquid assets. Also adjust other assumptions like what kind of investment vehicle you want to be in(standard investment vehicles only, not individual stocks).
This calculator will back test over 95 scenarios from great depressions to full on bull market and spit out the probability of running out of money till the years you want to remain in retirement. If the probability is above 95%, then that's your path to retirement.
FIRECalc: A different kind of retirement calculator
Food for thought, if you have 2 million and spend the median income of the average American household of 65k/year. Having this asset in the Total Stock Market fund will give you a 98.9% probability of never running out of money after 55 years but instead you'll most likely still have $13,827,070 when you die.
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lafrisbee
Active Member
First I am 64. So health care isn't an issue for me. And I have never made more than $40,000 in any year I have been alive. My Average yearly income is below $20,000. And I have lived a very good life. I work to live, not live to work. And I was influenced by Thoreau while in college. BS from Auburn, and Master's from Florida State University. As having so low an annual salary My Social security check is less than a thousand dollars. Which is almost enough for me to live on. But I recently married and she is in the field of Stochastics, and has her Doctorate in some area of Optimization. So money is something I think about even less. She doesn't spend much, so her bank account is growing quickly based solely on her work income.
You'll never see me post a photo of me drinking a bottle of beer or a shot of scotch that costs more than a Publix Sub. And I go into a grocery store having the prices determine what I will eat the next week instead of deciding what I feel like.
Twenty years ago I bought my first home. And I started planting trees in it that I would provide me with real food.Mangoes, Bananas, Lychees, Muscadines, and the odd citrus tree as I live in Florida. I was not considering buying a home. I was living in a County Park for free because it had a small lake, and I had been a lifeguard for the county for a few years. And the county had "caretakers" that were either law enforcement or firefighters that lived in their own trailer in the park for free. I bought the trailer from the previous caretaker for $1500. All I had to do was call the police of someone came into the park at night and was acting a fool. So...I purchased the home because it was too good a deal. Long story. After two years the man that sold it to me and came back to tell me how good a deal I got because the IRS had audited him claiming he would not have sold the house for that little. He set the price, not me. And he worked for the FBI so it wasn't like I took advantage of some senile old man. The house is now 7x the value I paid for it. A friend who owned a real estate business did the closing for me for cost. He was a bit nervous doing it until he met the man and determined he was of sound mind.
My hobbies also improve the bottom line..I used to hunt and fish. Now since I live on the coast I can pretty much offer any guest a fresh fish dinner...if they are willing to hold a pole for an hour.
I have an expensive hobby, Koi. I have a 51,000 gallon koi pond in my backyard. I Know a man that builds them for other people. He is also a friend. His estimate for if he built the pond for one of his clients was over $250,000. My costs were under $20,000. It took me 2 years just to finish digging the hole with a shovel.
Lake Luke
I also get my koi for very little money as I will take vacations to koi breeders and work with them for a few days during their busy times. And I am considered a gifted culler. As one breeder put it, "Luke you see the final koi. You see good traits. But you also see what I not see. You see in baby koi adult koi hobbyists want that is not good koi." He used to raise an eye at some of my selections. Now he smiles at himself. I can actually ask for any of the babies I cull through. And while the finished (large) koi are valuable, the babies are 1/10th the price so it is not costing the breeder to have me cull through his koi and pick some ones I like..especially since my tastes are esoteric.
I get most of my clothes at Goodwill ( If you do start shopping at Goodwill go on a Sunday morning because they rotate out the stock based on a color-coded tag, and the week before that color will be pulled from the floor they reduce it 50%. ) The only clothes I don't buy from Goodwill are underwear, socks, and shoes.
I do not travel much, once every few years going cross country. HOWEVER TSLA is going to give me a new Cybertrck to explore wherever wheels can take me. When I travel I do insane things like stop at a grocery store for a snack (fruit) instead of a coffee at starbucks. I have two starbucks gift cards on the fridge, and starbucks is three blocks down the street. And I have had those cars for at least 2 years...
Now I am going to go take a nap...on a second hand bed I really enjoy, with second hand high count thread sheets I got from Goodwill. Even the pillows are from a thrift store, but they were still in the plastic.
I do buy new vehicles but only because in my youth when I had very little money I had to buy used, and unfortunately always got some car that was undependable. So I buy "new," and keep them for 10-15 years. The ICE Dodge 5.7 liter hemi I am driving now is a 2008... I think? It has to last two more years. No Problem, it could last much longer.
I enjoy my life. More or less. But what I have shared is not my life.
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I feel I should clarify driving the Dodge with the 5.7 liter hemi. It was late 2008 (I think). Gas was $4/gallon. I thought it would be advantageous to buy a "gas-guzzler". The sticker on the Dodge was $35k. I got it for my 1997(?) Nissan Pickup that was on its last leg and a little over $21k all in. I figured that the $20k in initial costs would lighten the cost of the fuel economy. And I thought gas would settle under $3/gal.
I unlike so many of you don't give a tinker's damn what happens to the work's air quality in 20 years. I have severe asthma which is triggered by cigarette smoke. For the first 50 years of my life no one cared about cigarette smoke. What were "adults" thinking? they could see, smell, and taste a dense cloud of known carcinogens and accepted it as if it were the right of others to kill not only themselves but everyone around them... and you worry about a couple of degrees? ( You are probably right, but my point is I don't care. I've lived through hell already.)
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jebinc
Well-Known Member
If one has a decent pension income (“Y”), in addition to having $x million, “x” can be a much smaller number - depending on amount of “Y” pension income.
Look up mr. Money Moustache. You probably won't like the answer, but it's a answer. In summary, live in a fairly cheap location, bike everywhere, be outlandishly frugal otherwise. Travel is fine, if you do it in your $10K used small wagon car.
Most purple are very much not ready for this, but probably would be happier, healthier and live quite a but longer if they could pull it off.
It looks like the guy couldn't hold it anymore and gota model 3
I started following Mr. Money Mustache and other FIRE bloggers around 2013. I retired at age 40 in 2017 with a family of 5 and net worth around 1.5 M. Full disclosure my wife still works, but the plan is for her to retire before 50. I’d be fine with her retiring tomorrow (net worth currently >3M), but I’m willing to have a leaner retirement. I think it's incorrect to characterize the FIRE lifestyle as requiring extreme frugality though. Frugality, especially in your early working years is a central tenet, but I think its more accurate to say FIRE requires a careful self-examination of what truly makes one happy, prioritizing your time over money and material things, and having the financial independence to not have to work out of necessity or with financial gain as the primary consideration. I don’t buy many material possessions, but I spend pretty lavishly for quality food and drink, some nice meals out, experiences (skiing/travel). Friends and family have no idea of our net worth looking in from the outside. My first Tesla shares were bought in 2013 and have added a nice cushion since I retired in 2017.
Apologies for the OT, but I hate seeing FIRE equated to extreme frugality and a life devoid of joy.
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Krugerrand
Meow
Do you need a filing cabinet? I got this two door one I don’t need anymore.
The same would work for you. You just have to wait about 10 years.Good for you. Unfortunately I fail all the above criteria. and some by a long shot. Youngest just starting High School. only have 1 tesla, and 20 years to medicare...
Not at 45 years old. Health insurance alone is going to be killer... Besides I'm not ready to sell most of my TSLA yet, so there's also that problem
Well, except for healthcare I guess.
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