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How much $ to retire and how to fund your lifestyle in retirement

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Along a similar vein, some of the videos from Two Sides of FI have resonated with me, on their hints at numbers, mention of Chubby Fire (I was thinking Lean Fire or similar) and post-retirement - what it's like for different people at around 48-50 (their ages I think) .

Sense of purpose is a big part of their discussions. As is family attitudes, spouses etc
 
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I was involved with a lot of things while working, my involvement with those has increased. I take more naps, stay up later, sleep later, all if/when I want to. I can always be spur of the moment and/or know that I am free for any event.

I had concerns about things like "sense of purpose", okay more like angst. Nobody really offered me answers that helped with this.

I had concerns as to money being enough and likely worked longer because of it. When things happen that make me/us worried, we recall our emergency fund, no debt, and the expenses for immediate future are taken care of. 2023 should be fine, but we can adapt up or down if need be.

Our money is right. No angst. I do not really care about sense of purpose any longer. I really don't give a flip what other people think or worry about and I try not to worry much for my own sake. It all really just changed as time went on.

Come up with a plan that can weather storms and quit.
 
Yes.

Keep working.

I don't see how $3.5m is anywhere near enough, personally, and your recent six-figure loss in options, in just one day, suggests you do not have the skills needed to make money in options. (And even if you do or did, options are great until they aren't . . . . )

Just because you own a lot of a stock, remember that TSLA does not, and likely will not, be paying any dividend, perhaps forever.

Cash flow is king, and leaving your job will drop that to about ZERO.

Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.
 
Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.
Actually, what has occurred is WONDERFUL because it happened while you were still employed.

Imagine if this massive drop had occurred after you had made an early retirement decision . . .

Here's a better idea: BUY MORE TSLA while it's on sale!

That will set you up best for an early retirement, and you should also consider learning about options, such as covered calls, to provide for income off of the wealth those shares will create over time.

Best of luck going forward (luck is where preparation and opportunity meet).
 
Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.
There’s a lot to break down. Still at $1.9M after what’s happened the last 2 months is a great achievement. Take a step back and appreciate what you do have.
Do some research on buying $100 puts which should get rid of your margin call.
As Pilot mentioned, when we do get back to $1200 don’t just walk away from your shares, sell CC.
 
Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.

Same as you.
Same numbers.
Same risk of margin call.
The only difference is that I hate the 50% administrative portion of my job and love the 50% clinical portion.
I planned to cut the 50% I hated but will keep doing it.
 
Actually, what has occurred is WONDERFUL because it happened while you were still employed.

Imagine if this massive drop had occurred after you had made an early retirement decision . . .

Here's a better idea: BUY MORE TSLA while it's on sale!

That will set you up best for an early retirement, and you should also consider learning about options, such as covered calls, to provide for income off of the wealth those shares will create over time.

Best of luck going forward (luck is where preparation and opportunity meet).

Great piece of advice.

I'm one of those that made the early retirement decision at the end of 2021 with what I thought was enough and what I thought was stable monthly income while letting the shares grow. And then spreads happened. There are so many lessons learned that I almost feel like I can do an AMA thread haha.

I underestimated the importance of a paycheck. It puts undue pressure on you to almost make perfect trades. Also my goals/targets were ridiculously high. My trade sizing was atrocious. I don't have any regrets. I'm a risk taker plus my wife has a decent paying job and yes it did not work out as planned but I will be fine. I always knew I might have to look for a job if this did not work out. Looking back I can say that I could have done this call/put selling on the side and made decent secondary income. It was a mistake to quit my job.

I'm now in the process of writing my resume. I left on good terms with my previous employer(it's only been 5 months) so I have that going for me. I might even look for a job that is flexible. I better start soon though, I hear a recession is coming :)

Cheers and happy to answer questions.
 
Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.

Sorry to hear this. If it's any consolation, my IRA's down ~40% as well. How I've dealt with it is to trade shares for LEAPs to leverage up and free up cash for taking the SEPP distributions. All the option sales helped maintain the buffer despite huge losses in my non-TSLA holdings.
 
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Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.

Thanks for sharing. Sucks to be you. I am 100% sure there are many more like you on this forum. Been there, done that. Got depressed. Leaned into it, let it hurt and instruct. Took me nine months or so to get hungry again. Adapted. I stopped "trading" and started investing. No margin. I had lacked perspective in the market, missed all the warnings signs, even the ones screamed at me.

I do not understand the idea of puts. If this is gambling, then the solution is never more or different style gambling.

One of the issues with the utubers is they will never put out a video on this kind of thing, yet the NEED for such warnings are needed. They need to interview you and others and talk about what brings someone to this point. They need to put out regular repeated RISK MANAGEMENT information. Instead, they hype a pipe dream of hopes. Perhaps they have never felt such pain (they all seem so young...).

How much money to retire? Well, one needs a plan to weather such storms. For me this comes by knowing how much money we need to live. Starting in 2015 we kept track of every receipt, totaled up each month in different categories. So, we knew what our absolute floor of expenses were after figuring on taxes and insurance. Then we built up from a couple months of emergency fund to two years worth. Then we came up with a withdrawal model, a means of taking savings into living expenses. We chose the variable percentage withdrawal method, use online resources to calculate how much is available based upon our age and asset allocation. In good years such as 2021, the amount was quite large. What we did not spend padded the emergency fund. In leaner years, perhaps like 2022, if required, the emergency fund can get spent down some. This kind of stuff helps to handle drawdowns. Variable percentage withdrawal - Bogleheads

We wanted the availability of living through and surviving this crap without worries or losing sleep. These things need to be planned for!

The groupthink around here lacks awareness of margin troubles. I'd advocate for a healthy dose of skepticism towards everything, everyone, at all times. Surely the hivemind around here contributed to your actions? You were likely blinded to any faint or screamed warnings provided by elders or those wiser and more experienced.

Who the Heck keeps things on margin in a declining market?
 
The groupthink around here lacks awareness of margin troubles. I'd advocate for a healthy dose of skepticism towards everything, everyone, at all times. Surely the hivemind around here contributed to your actions? You were likely blinded to any faint or screamed warnings provided by elders or those wiser and more experienced.

Margin and spreads are very dangerous. I traded spreads and booked losses which can be offset by gains from TSLA shares earlier in the year. But have always been averse to using too much margin. Rolling puts/spreads works in a bull market. There is nothing wrong in taking losses or reducing your positions if you see the trend going against you or macros impacting the entire stock market.

Personally I did this for a "living" and came out positive in terms of realized gains. One of the keys to this was my limited use of margin. I still have 1/3 in cash which is covering puts in the 600-700$ range. My plan is to roll these puts. I'm not going to buy shares or leaps unless TSLA drops into the $500s. No regrets if the stock does not get to my price point.
 
Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.
37 with $1.9M... You sir, are still doing really well. I have also lost a significant amount in this drop from its ATH, probably close to $2.4M in paper losses, but we just gotta take the good with the bad.
I think we all got spoiled with TSLA and the run up to $1200+ last November. I, for one, was also contemplating retirement but with 2 kids 12 and 10 and private school, i thought better of that. Plus, i WFH and i actually kinda like my job for now. Do not fear, TSLA will be back in the $1000+ club before we know it and you will be planning to retire again real soon!! We all know its all macro driven, future has never been brighter for TSLA!

Good luck and we will be back to ATH soon enough!
 
Well well here we are, with the recent SP drop my portfolio is down to $1.9M 😢 . I now think that is not feasible to retire safely with only Tesla in my portfolio after what just happened. Right now I am facing a margin call if the stocks keeps falling into the high 500's; thankfully I have some cash to close out some losing positions if I need to. I also applied for a portfolio margin account to add enough buffer to survive this downtrend. The sad part is that I hate my job more than ever and right now is too risky to quit. I am hoping that Tesla goes back into 1000's by the end of the year but it seems so far and almost impossible in the current economic and world climate. I guess I am still young at 37 but it feels awful being so close to your goal and then everything goes down the drain over a few months. Next time I am close to an amount that I feel like I am comfortable with retiring I think I am going to have to say good bye to my precious Tesla shares.
Someone like yourself who is young and talented might just focus on finding something that you love doing. I've been very fortunate in that regard so I'm happy to still be working even though I'm (sort of) retired. Like the famous joke says if you love what you do, you never have to work a day in your life
 
I know for me, retirement isn't about not doing something. Its really about financial independence - the financial ability to choose what I want to do among the multitude of things that I could do. In my case that means no longer working for a paycheck, though it has included volunteering my time to provide my work experience and expertise for free to a non-profit.
 
I know for me, retirement isn't about not doing something. Its really about financial independence - the financial ability to choose what I want to do among the multitude of things that I could do. In my case that means no longer working for a paycheck, though it has included volunteering my time to provide my work experience and expertise for free to a non-profit.
Good deep conversation with my other half prompted by yesterday's

Both of us (partner) are on same wavelengths. Which is nice. I couldn't imagine doing this with anyone else I've ever been involved with.

Chatting about how to live after Financial Independence. Seeing 2 people either side of FI (2 years before, 2 years after), plus adding in blogs/videos/TMC posts (thanks all) on those much further along the path is what I feel I need right now.

Nothing is assured but "Prior Planning and Preparation Prevents P**s Poor Performance". I want to avoid the 19th century "Retired Colonel" syndrome (lifetime in Indian Army, retired to British town, dead within months). I think we're more mentally prepared than a few others due to our natures (own interests, what is morally/inherently important to us and disinterest in materialism, convention and what others think), but some more info always helps.

The drop in $TSLA share price hasn't really fazed us, "The number" is much the same, $TSLA price fall could delay the switch to "retirement from paid work" but a lower amount is (we think) doable, partly on an assumption that $TSLA will grow faster than most shares/bonds used in FIRE calculators and worst case - do some part-time/project work (much of which would be below annual income tax limits, certainly higher-rates).

If the economy goes bad, it might force my hand much too early, but I'd consider that as just a sabbatical and opportunity to do other things until work picks up or $TSLA is up. In this forced scenario, I wouldn't be sticking to a 4% rule initially, but confident that I'll be well below 3% in a few years. I've learned that looking for work when the cards are against you is deeply troubling. Better to sit it out, skill up, mentally recharge and look for a decent role than just take anything.

Still not there, but it's such a wonderful feeling to see the light at the end of the tunnel and believing it is achievable.
 
Good deep conversation with my other half prompted by yesterday's

Both of us (partner) are on same wavelengths. Which is nice. I couldn't imagine doing this with anyone else I've ever been involved with.

Chatting about how to live after Financial Independence. Seeing 2 people either side of FI (2 years before, 2 years after), plus adding in blogs/videos/TMC posts (thanks all) on those much further along the path is what I feel I need right now.

Nothing is assured but "Prior Planning and Preparation Prevents P**s Poor Performance". I want to avoid the 19th century "Retired Colonel" syndrome (lifetime in Indian Army, retired to British town, dead within months). I think we're more mentally prepared than a few others due to our natures (own interests, what is morally/inherently important to us and disinterest in materialism, convention and what others think), but some more info always helps.

If the economy goes bad, it might force my hand much too early, but I'd consider that as just a sabbatical and opportunity to do other things until work picks up or $TSLA is up. In this forced scenario, I wouldn't be sticking to a 4% rule initially, but confident that I'll be well below 3% in a few years. I've learned that looking for work when the cards are against you is deeply troubling. Better to sit it out, skill up, mentally recharge and look for a decent role than just take anything.

Still not there, but it's such a wonderful feeling to see the light at the end of the tunnel and believing it is achievable.
Have you done your modeling with Bernicke's Reality Retirement Plan?

Might be a good way to look at things on a forward looking basis
 
Have you done your modeling with Bernicke's Reality Retirement Plan?

Might be a good way to look at things on a forward looking basis

Interesting, thanks.

1) I'm (actually we, but I'll speak for myself) likely to spend more when I feel better off, I'm naturally tight with money. Previously when I have had a lot extra I have splashed out, but for experiences, not things. Exceptions would be a better house and travel. I'm too old with too many aches and pains for backpacking and winging it now

2) Therefore, I imagine a cautious first 1-3 years (same as now), then a travel splurge (higher expenses), eventually a house splurge (big dent in savings) and then lower expenses as we age, except for help with kids/relatives/charity which would mostly happen only if priority (kids education/housing) or we had loads spare (pay forward).

3) At some point, small UK gov and private pension kicks in £13k in todays money probably.

Conclusion:- reassessed numbers, quietly confident, even if $TSLA dips further.
 
I know what you mean and if I was still striving to reach my "number" I would probably be even more than the 50-plus percent (in one company) than I already am. And I would be a bit "on the edge of my seat" the entire time being so concentrated in one investment, no matter how sure of a thing it seemed. As it is, I don't have a care. Which is a luxury in itself. No having a care is a luxury made possible by having a lot more than I know I need.

For that reason, I have some investment/retirement advice for those looking to retire and trying to come to terms with what their 'number' is. Take it or leave it, it doesn't matter to me:

Make the 'number' at least two to three times what you think it should be. Obviously, the exact multiplier here will vary depending upon how you calculated your "number" to begin with, and your age and health at the time, but you get the idea. Remember, the first million is the hardest so be very generous when calculating the number. Like at least 2-3X what you think you will actually need, maybe 5x. It's a lot easier to make more money when you haven't mentally 'cashed out' than it is to conserve a dwindling pile. There are a bunch of very good reasons to be greedy like this, I'm only going to mention two or three of the big ones.

1) The luxury of not having a care. This doesn't mean you can be reckless with your money on a grand and continuing scale, but it does mean you can stop thinking about money, stop trying to get a better deal, you can take that vacation when it's most convenient for you, maybe that means tomorrow, rather than planning it for when the rates are the lowest or the weather might not be optimum. It means you can stop waiting hoping the thing you want/need will go on sale, you can just buy it when you need it. Basically, when you have more than you need, you can do whatever you want, whenever you want, without worrying how it might impact your budget. That's very liberating which is worth a lot right there.

2) I don't know what the future holds, and neither do you. It could be there is hyperinflation. Or the future could be an amazing place with amazing options, but only if you have the very large amounts of money that it may cost to be an early adopter of things that could significantly improve your life. Domestic robots, life extension technologies, amazing genetic cures for diseases that cripple quality of life, etc. etc. etc. I could go on and on about why we don't know, the point is, nobody can know how much they might need or want in the future and it's a lot easier if you continue compounding your gains than if you cash out early and start living big early. I'm not saying to delay your dreams so much as I'm saying it might be good to scale them back to require a much smaller part of your net worth so the bulk of it can continue to compound rather than spending it down early on lavish things.

The future is both more certain and yet more uncertain than most people think. That sounds like a contradiction, but the certainty is a function of the aggregate future of everyone (which, with AWG, etc., still has plenty of uncertainty to it) and the uncertainty is a function of each individuals happenstance (human nature is to under-estimate the chances of negative things happening). All the planning in the world cannot prevent bad things from happening. I'm not saying to expect bad things to happen, I'm saying it's easier and better to have contingencies in case they do happen than to squander those away on living large and close to your budget, before you really have the means. It's always helpful to not be constrained by money. Truth: money does not surprise you with how long it lasts (unless it's actively working for you). Conversely, many people have discovered that money vanishes amazingly quickly with little to show for it. This is even true for the majority of big Lotto winners, even those who won more than $50-$100 million. Yes, they were foolish but it still illustrates how quickly things can go wrong.

3) There is no rule that says you have to spend it all, it doesn't matter if you have more than you need. It's only a problem when you have less than you need. Go beyond money and enjoy living so far within your actual means that you can enjoy each moment even more. If your money continues compounding (and it will), there will come a point at which living far within your means is actually living quite large. This is the side you want to err on.

Some people feel they must spend it now to become "the person" they want others to see. Please stop right there. That never made anyone happy and it just might make long-standing family and friends jealous. Conversely, if they are already far beyond your economic "status" and you want to bring yourself "up to their level", stop right there! If they treat you or think of you any differently based upon your perceived economic status, they are not worth knowing, let alone, trying to impress. You only have one life to live, live it on your terms. Do what you do because that's what you believe you should be doing, not because that's what you think others believe you should be doing.

In the current world, even $10 million is not necessarily excessive if one wants to retire before the traditional retirement age of 62-65. Sure, don't live like a college student simply because you 'only' have $2 million or $5 million, or whatever it is, but don't "cash out" and "do big things" because there is a high chance those "big things" won't turn out how you thought. It's much better to continue making money by the proven method of the magic of compounding. It doesn't even have to be in TSLA although I haven't seen any companies that look to me like they have a more favorable risk/reward ratio at this point. At my age, that doesn't stop me from diversifying 50% of my assets into other companies. Elon Musk kept betting it all and winning. He never intended to bet it all but that's just how it played out because the money never goes as far as you think, unless it's actively working for you. I suppose if you are as exceptional as he is, you could emulate his investment style, but I don't recommend it. If you want to bet on yourself, and you do not have a proven track record, limit the amount you invest and get others to make up the difference. Elon did this too but it almost ended up a disaster anyway.

The message is: money ain't what it used to be so don't be getting all swell'd up in da head thinking yer rich and can cash out and get off the crazy train simply because Tesla doubled yet again. Sure, take some profits and upgrade your day-to-day life a little, but always keep the spending on the conservative side so your assets can continue to compound, and you can reach that point where money truly doesn't matter. I think many will be surprised how quickly that will happen when you patiently hold the course. Of course, your health and age are major determinates of how to think about all of this and how and when to diversify. Finally, never take your eyes off the actual current performance and future prospects of the companies you are invested in.
 
Very good and well thought out post, Stealth. To pull the "health and age" thread a bit more I would point out is that many believe "time>money" (at least once you have a reasonable sum of the latter). Over on another forum I am on, folks call it "OMY"ing. This occurs when they have enough money to retire, but then work "One More Year" (aka OMY) to be sure...and then that turns into two more years...and then three more years, etc. While some are glad they did stockpile a bit more, many look back in regret because the one thing that money can't buy is more years...especially more HEALTHY years. More healthy years to "do stuff", more years to spend with family and loved ones, etc. It's always a balancing act....if only my crystal ball were working better I'd know my own "balance" point!