How much to retire at age 55? We are 50

[Anonymous]

Anonymous wrote:

Anonymous wrote: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

If $6,000,000 isn't enough for two people to retire on then 99.9% of the country is f***ed.

It depends on what your spending expectations are in retirement, which are likely based on spending today. We have two houses with associated costs (maintenance, landscaping, cleaning, insurance, RE taxes, etc.). Also plan to travel quite a bit while we can, including spending a month at a time in some places. So we are budgeting or more than $240k. And we want plenty to be able to cover any long term care requirements and not burden our kids. Other people won't have those same expectations so don't need to fund the same kind of lifestyle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t assume that the markets will continue to flourish. I’d assume continued inflation. I wouldn’t assume the ACA will remain intact, and certainly wouldn’t count on subsidies continuing. I would also anticipate major political and social unrest in 2024 and beyond, and plan accordingly.

I’m sure this is too gloom and doom for most folks.

Not sure exactly how to plan for the breakdown of democracy, especially if it happens 20 years before I plan to retire, so I think I'll just keep saving as I have been doing until it obviously becomes time to sell everything and flee the country.

If fleeing the country is on your radar, you might want to plan for that now.

It's not, really, I was mostly being flip. I don't see much reason to plan for evacuation as far as retirement savings goes. If I had to flee immediately, we could just ... leave all our stuff here and put plane tickets on a credit card (assuming those still work) and then deal with liquidating or moving assets later. Not really sure where we'd go, anyway. Can get Israeli citizenship pretty easily, but things would have to be pretty bad here for that to seem like a safer, more stable option.

[Anonymous]

Inflation, taxes, a likely prolonged period of low returns given high asset prices currently and the fact that the average investor's portfolio performs worse than the stock indices mentioned here even on a risk-adjusted basis (because we all make imperfect decisions on when we invest and withdraw) all represent threats to long-term wealth preservation and growth.

[Anonymous]

Anonymous wrote:Inflation, taxes, a likely prolonged period of low returns given high asset prices currently and the fact that the average investor's portfolio performs worse than the stock indices mentioned here even on a risk-adjusted basis (because we all make imperfect decisions on when we invest and withdraw) all represent threats to long-term wealth preservation and growth.

There may be a period of prolonged low returns. But so what. Even the depression ended in 10 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t assume that the markets will continue to flourish. I’d assume continued inflation. I wouldn’t assume the ACA will remain intact, and certainly wouldn’t count on subsidies continuing. I would also anticipate major political and social unrest in 2024 and beyond, and plan accordingly.

I’m sure this is too gloom and doom for most folks.

Markets might not perform as in the past. But that past is almost 140 years. I don’t think it will be different that that. Agree with you on ACA.

I’m concerned about the attempted coup and ongoing subversion of democracy, so I’m inclined to hedge my bets a bit.

This is not an investment concern. You can't plan for that or around it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t assume that the markets will continue to flourish. I’d assume continued inflation. I wouldn’t assume the ACA will remain intact, and certainly wouldn’t count on subsidies continuing. I would also anticipate major political and social unrest in 2024 and beyond, and plan accordingly.

I’m sure this is too gloom and doom for most folks.

Markets might not perform as in the past. But that past is almost 140 years. I don’t think it will be different that that. Agree with you on ACA.

I’m concerned about the attempted coup and ongoing subversion of democracy, so I’m inclined to hedge my bets a bit.

This is not an investment concern. You can't plan for that or around it.

I disagree.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wouldn’t assume that the markets will continue to flourish. I’d assume continued inflation. I wouldn’t assume the ACA will remain intact, and certainly wouldn’t count on subsidies continuing. I would also anticipate major political and social unrest in 2024 and beyond, and plan accordingly.

I’m sure this is too gloom and doom for most folks.

Markets might not perform as in the past. But that past is almost 140 years. I don’t think it will be different that that. Agree with you on ACA.

I’m concerned about the attempted coup and ongoing subversion of democracy, so I’m inclined to hedge my bets a bit.

This is not an investment concern. You can't plan for that or around it.

I disagree. [/quote

Great

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think you should pay for college and grad school for the kids. I would allocate a million for that and then be pleasantly surprised if it’s not that much. Harvard Law and Med is $100,000 a year or more already.

I think you should also pay for your child if they decide to run for high political office. I would allocate $100 million for the Presidency and then be pleasantly surprised if you have some change left over.

I can't believe how shortsighted you all are. What if their children want to participate in intergalactic travel? They need to set aside at least $1B for that.

This is where it gets to be expensive. OP, are you prepared for intergalactic travel?

Yes OP here- shoot! Want to get off the planet before the next asteroid hits . This gave me a chuckle!

[Anonymous]

OP again. Our assets are down by 350k from Dec 2021- just noticing this. We’ve really been passive investors. Our only aggressive posture has been savings.

Someone asked how we got there with only 400k in 2008. Honestly, If have to research this and don’t feel like doing it. Our Fidelity legacy 401k accounts show we’ve contributed 1M and have 3M in them over approximately 20 years.

[Anonymous]

For anyone who is doubting how this is possible- just save the max- have dual income and let folks question you .

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

Surely you mean 10 million lol.

DP. I'm sure they mean 100mil. Compound interest is a wonderful thing.

OP here. Yeah I was surprised by the fidelity calculator too but it assumes we only spend 10-12k per month.

These calculators always make unrealistic assumptions about the actuarial rate of return.

Put in 2.5% pa above inflation and recalculate. This is overly conservative but it’s what you want to do when making a decision you could defer but not reverse easily.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Two thoughts. First retirement is not a one way street but if you decide to reenter the labor market you will take a hit. Second, what’s your return assumption? Have you processed the fact that real interest rates are negative? What do you think that means?

Of course. If we retire , it would be very difficult to find jobs in our field again as we are very specialized unless we are willing to move etc. We are right now invested very aggressively for our age and have most in equities. Obviously if the stock market takes a big hit in the next few years we’ll be singing a different tune. My plan is before we retire to move 1M into safe assets. In 2008, our portfolio dropped by half and as traumatic as that was it was only 400k or so at that time- now it would be a much different story.

Can you tell me what assets are safe? I’d love to purchase some.

[Anonymous]

Anonymous wrote:The average price of a single family home in Arlington is 1.3 million. Since you easily can, and benefitted from decades when the stock market gave you huge returns, you should completely pay your kids’ education and provide home down payment money — as long as kids are being responsible, kind etc. That’s what I would budget for. You probably also bought you current home for a low price, unlike now and a decade from now. This was all lucky for you, not a result of your great frugality, so I would pay it forward. At least, that’s what we are planning as two gov workers who got the same benefits.

The average price of a single-family home in Beverly Hills is probably pretty high now too. That doesn’t mean the OP shouldn’t retire at a reasonable age.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Two thoughts. First retirement is not a one way street but if you decide to reenter the labor market you will take a hit. Second, what’s your return assumption? Have you processed the fact that real interest rates are negative? What do you think that means?

Of course. If we retire , it would be very difficult to find jobs in our field again as we are very specialized unless we are willing to move etc. We are right now invested very aggressively for our age and have most in equities. Obviously if the stock market takes a big hit in the next few years we’ll be singing a different tune. My plan is before we retire to move 1M into safe assets. In 2008, our portfolio dropped by half and as traumatic as that was it was only 400k or so at that time- now it would be a much different story.

Can you tell me what assets are safe? I’d love to purchase some.

Right!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Two thoughts. First retirement is not a one way street but if you decide to reenter the labor market you will take a hit. Second, what’s your return assumption? Have you processed the fact that real interest rates are negative? What do you think that means?

Of course. If we retire , it would be very difficult to find jobs in our field again as we are very specialized unless we are willing to move etc. We are right now invested very aggressively for our age and have most in equities. Obviously if the stock market takes a big hit in the next few years we’ll be singing a different tune. My plan is before we retire to move 1M into safe assets. In 2008, our portfolio dropped by half and as traumatic as that was it was only 400k or so at that time- now it would be a much different story.

Can you tell me what assets are safe? I’d love to purchase some.

Right!

Are there any? CDs paying 0.25%?