How much to retire at age 55? We are 50
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Anonymous
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My husband and I make 300k combined and have close to 5M saved. Our house is worth 700k and we have 500k in college savings for 2 kids.
Fidelity’s retirement investment calculator calculates that we’ll only be able to spend about 10k a month to weather a significantly below average market.m but an average market would give our kids 100M when we die. Planning for the significantly below average scenario seems crazy conservative. I’d like to retire before age 55 with hopefully 6M. Is 6M too low? The 4 percent rule would suggest that we would be able to spend 240k per year which would be more than enough. Thoughts? TIA |
Anonymous
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It’s doable as long as you can keep your expenses in line. What’s your plan for health insurance? What is your spending?
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Anonymous
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6M is plenty. We have similar income stats, although we are very aggressive savers and don't spend anywhere near that (probably average spending around $120K a year).
My estimates - and those of our financial advisor - show we'd be fine retiring at 45 with 4M. And that is a lot longer gap to bridge on health insurance. Need to have non-retirement funds lined up until 59.5, or Roth contributions, plan SEPP payments, or plan a Roth conversion ladder. |
Anonymous
| What are you planning to do for health insurance? |
Anonymous
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What is it you want to do? If you’re not working and still healthy, you will probably be filling up the days with other stuff that is going to cost money. You may find yourself spending more than what you do now. The kids are going to be expensive.
Now, are you in a good position to dial back your jobs and go part time ir switch to another career that doesn’t earn much? Yeah, probably. |
Anonymous
Surely you mean 10 million lol. |
Anonymous
DP. I'm sure they mean 100mil. Compound interest is a wonderful thing. |
Anonymous
Will the kids be out of the house by then? If so, I'd say go for it. Your $5M will be around $7-8M in 5 years time. |
Anonymous
| Only $10k a month, huh? |
Anonymous
| How did you get to 5M? Apple stock in the 90s? |
Anonymous
OP here. Yeah I was surprised by the fidelity calculator too but it assumes we only spend 10-12k per month. |
Anonymous
No student debt. Maxed contribution retirement saving since we were 22. We don’t have fancy cars or hobbies. |
Anonymous
That’s what I’m hoping but if the market doesn’t do well I am hoping for a min of 6M in 5 years time. |
Anonymous
I just wonder if the calculators work well for “high” net worth individuals. I think my plan will be to pull a min of 10k per month out (and the rest will depend on the market). If the market is doing well, I’ll pull the 4 percent out-240k a year. I much prefer thre 4 percent rule  . I think the 10k per month seems ridiculously low. I think that’s a thing they call it flexible retirement or something like that.
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Anonymous
I mean we are 46 and maxed retirement contributions since 25 and have no where near that. |