Why wouldn't you retire on $5M?

[Anonymous]

Anonymous wrote:I will be happy with health insurance, paid off modest home, $ for food, couple of grandchildren. Have seen elders pass last decade. You really don’t need that much. Crazy, greedy, malcontent people

If you are used to living on 20K+ you might struggle with 10k. It's all perspective.
We plan to have an active fun retirement and that includes spending on travel and events and dining etc while we can do it. So sure we could live in much less but why?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I need 20 M to be comfortable

Need or want? 19 million wouldn't be enough?

Do: obviously I can live on much less but why would I want to do that?!? Retired at 50 with more than 20m. Earned it ourselves so we plan to spend part of it on ourselves as well

[Anonymous]

Anonymous wrote:It’s all about what works for you. I went back to work full time a year ago at 58 after almost 30 years as a sahm and PT consultant. What nobody tells you is staying busy and happy and fulfilled takes a lot of work. I wasn’t happy once my kids were grown, parents died and husband returned to the office. Lunching, Yoga, pickleball and travel got old and having my life’s purpose on most days being making dinner walking the dog was honestly depressing. I couldn’t imagine doing just that and volunteering for 30 more years. I love the structure and camaraderie of work and the paycheck. My job is not high stress but it’s interesting. I’d like to work til 65-67. Just my perspective - and we have a little over 5 mil now.

If you need a job to feel important and fulfilled then go for it. But I find it a bit sad that you cannot find ways to fill your day "meaningfully" without a job at age 60

[Anonymous]

We have more than that but still have kids at home. Also spouse wants to work for a purpose for now. This will change in late 50s I am sure. Also if we can accumulate a larger sum it’s more security for the future. We have a great life but know that money makes most things much easier so why not get more while you can.

[Anonymous]

Because I'm a now divorcing single mother of 4, and my underperforming husband is stealing half of the savings/investments I built to run away with his mistress. So, my net worth is cut in half by divorce, and my ongoing family expenses have increased a lot

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s all about what works for you. I went back to work full time a year ago at 58 after almost 30 years as a sahm and PT consultant. What nobody tells you is staying busy and happy and fulfilled takes a lot of work. I wasn’t happy once my kids were grown, parents died and husband returned to the office. Lunching, Yoga, pickleball and travel got old and having my life’s purpose on most days being making dinner walking the dog was honestly depressing. I couldn’t imagine doing just that and volunteering for 30 more years. I love the structure and camaraderie of work and the paycheck. My job is not high stress but it’s interesting. I’d like to work til 65-67. Just my perspective - and we have a little over 5 mil now.

If you need a job to feel important and fulfilled then go for it. But I find it a bit sad that you cannot find ways to fill your day "meaningfully" without a job at age 60

The reality is that most people cannot - which is why people massively cognitively decline after just a few years of retirement.

[Anonymous]

Lifestyle inflation. When you're 30/31 (do you have kids OP?) - you are easily living under $10K. It's when you've stretched up to get that home, childcare, private school, kids, college that you have $20K+ bills. Maybe once your kids are out of college you can revert back to $10K.... but probably not. And by that time, you're 55+.

[Anonymous]

I'm closing in on $5M in my late 40s. I'm not anywhere close to retiring because I enjoy living large and I also enjoy my work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s all about what works for you. I went back to work full time a year ago at 58 after almost 30 years as a sahm and PT consultant. What nobody tells you is staying busy and happy and fulfilled takes a lot of work. I wasn’t happy once my kids were grown, parents died and husband returned to the office. Lunching, Yoga, pickleball and travel got old and having my life’s purpose on most days being making dinner walking the dog was honestly depressing. I couldn’t imagine doing just that and volunteering for 30 more years. I love the structure and camaraderie of work and the paycheck. My job is not high stress but it’s interesting. I’d like to work til 65-67. Just my perspective - and we have a little over 5 mil now.

If you need a job to feel important and fulfilled then go for it. But I find it a bit sad that you cannot find ways to fill your day "meaningfully" without a job at age 60

lol! Im sorry this choice seems so sad and pathetic to you. But we are likely coming from very different places. After being at home taking care of others for 25 years, and also working from home PT a few hours a week in order to be flexible and available, it has been a treat to go back to work on my own terms and have a nice paycheck even though I don’t really need one. I need purpose and structure and love the camaraderie. If you work currently and are ready for a break, I can see this perspective being unimaginable, or sad for a “60 year old”. But just like working gets old, so does staying home and not working. This is my personal journey; and I absolutely disagree that it is sad. My life feels pretty perfect and fulfilled honestly.

[Anonymous]

We have $7M in our late 30s and to buy a 3bd/2ba house in a decent public school district our VHCOL area (coastal CA) would cost $3M+, realistically more like $4M+. We are still living in a condo and need to keep working.

[Anonymous]

Anonymous wrote:Simple: Because for some people work isn’t work..
When you’re 30 and at the beginning of your career it’s stressful and time consuming and you’re probably counting down the days you no longer have to work. if you have the luck to grow so much in your career, by the time you could retire you may not really want or need to.

I’m now in a position where I make a LOT to pretty much do nothing but use my brain At my level I get lots of job satisfaction by mentoring and giving back the next generation. People in my field/conpany respect and look up to me, reach out to network, and want my advice. I speak at conferences. I have the ability to refer someone for a job or give someone a leg up. I get lots of perks from my job which enhance my personal life (eating out at the nicest restaurants, Uber black, first class flights, free computer and phone, subscriptions, etc). I have a admin assistant and career coach. Work life balance is great! My status gives me lots of once-in-a-lifetime bucket list experiences. Earlier this year I shared a stage and had private lunch with an A-list celebrity who works with my company and I have box seats at the US Open in 2 months.

I see this perspective from others I know who may not even have such extreme circumstances. Usually the type of person who has the drive to earn and save multi-millions has the intrinsic need to continue achieving. Think of top athletes, politicians, and business moguls. The way I see it - I’ve worked really hard for a lot less and had to juggle life on top of it. With all the sacrifices and effort I put in over the last 25 years to get here, why would I stop “working” now. Retiring at this point would be boring and feel more like giving up and leaving a lot on the table. I grew up with a kit less, so I do think the generational wealth I’m creating is a key driver for me, but aside from more money I’m a lot healthier mentally and physically and emotionally as well. I may step back in 10 years for some unforeseen reason, but until then I’m going to keep logging in.

I don't know - as a partner at a law firm, my dad worked like a dog until he retired in his early 60s and he did count the days until he could retire! Your position sounds unique.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Simple: Because for some people work isn’t work..
When you’re 30 and at the beginning of your career it’s stressful and time consuming and you’re probably counting down the days you no longer have to work. if you have the luck to grow so much in your career, by the time you could retire you may not really want or need to.

I’m now in a position where I make a LOT to pretty much do nothing but use my brain At my level I get lots of job satisfaction by mentoring and giving back the next generation. People in my field/conpany respect and look up to me, reach out to network, and want my advice. I speak at conferences. I have the ability to refer someone for a job or give someone a leg up. I get lots of perks from my job which enhance my personal life (eating out at the nicest restaurants, Uber black, first class flights, free computer and phone, subscriptions, etc). I have a admin assistant and career coach. Work life balance is great! My status gives me lots of once-in-a-lifetime bucket list experiences. Earlier this year I shared a stage and had private lunch with an A-list celebrity who works with my company and I have box seats at the US Open in 2 months.

I see this perspective from others I know who may not even have such extreme circumstances. Usually the type of person who has the drive to earn and save multi-millions has the intrinsic need to continue achieving. Think of top athletes, politicians, and business moguls. The way I see it - I’ve worked really hard for a lot less and had to juggle life on top of it. With all the sacrifices and effort I put in over the last 25 years to get here, why would I stop “working” now. Retiring at this point would be boring and feel more like giving up and leaving a lot on the table. I grew up with a kit less, so I do think the generational wealth I’m creating is a key driver for me, but aside from more money I’m a lot healthier mentally and physically and emotionally as well. I may step back in 10 years for some unforeseen reason, but until then I’m going to keep logging in.

I don't know - as a partner at a law firm, my dad worked like a dog until he retired in his early 60s and he did count the days until he could retire! Your position sounds unique.

I am a lawy partner and I am counting the days to retirement. Also love the job a lot like the PP. Both are true.

[Anonymous]

Anonymous wrote:We have $7M in our late 30s and to buy a 3bd/2ba house in a decent public school district our VHCOL area (coastal CA) would cost $3M+, realistically more like $4M+. We are still living in a condo and need to keep working.

Seems like you could afford a mortgage on a $3M or $4M house if you already have $7M in assets and are both working in jobs that allowed you to amass that much before you turn 40.

[Anonymous]

5 million is now the amount to retire on at 65. It is not enough to retire early. Why if we get a big bear market and recession a few years and Fed decides to go back to zero interest you are now liquidating assets at fire sale prices.

I know people who retired in 1999 and 2007 when stocks crash a year later and interest rates fell like a brick their money disappeared way quicker than anticipated.

My BIL semi retired 2007 quit his full time job took a 20 hour a week part time job with no benefits. He was getting great money in stock market and even his CDs and Money Markets paying great interest

By end of 2008 his stocks crashed 38 percent and his money markets, CDs and short term treasuries his "safe side" when interest rates fell like a brick in 2008 they money markets reset to near zero and every CD maturity and bond maturity reset to near zero.

By 2019 he had to sell his his wonderful big home to downsize a tiny home. This time he bought new constuction and got lucky bought at 2019 price in pre-construction and by time he sold old hom in spring 2021 was worth a lot more.

If that man only retired 5 years later he be a very rich man. He would have been pumping up 401ks and retirement funds in 2008-2012 when stocks were super low instead he was selling stocks. By time the 2019 to 2025 bull market came we are in now he had hardly any stocks. He was selling for a decade.

He also took a life time hit on his SS payments.

[Anonymous]

Anonymous wrote:5 million is now the amount to retire on at 65. It is not enough to retire early. Why if we get a big bear market and recession a few years and Fed decides to go back to zero interest you are now liquidating assets at fire sale prices.

I know people who retired in 1999 and 2007 when stocks crash a year later and interest rates fell like a brick their money disappeared way quicker than anticipated.

My BIL semi retired 2007 quit his full time job took a 20 hour a week part time job with no benefits. He was getting great money in stock market and even his CDs and Money Markets paying great interest

By end of 2008 his stocks crashed 38 percent and his money markets, CDs and short term treasuries his "safe side" when interest rates fell like a brick in 2008 they money markets reset to near zero and every CD maturity and bond maturity reset to near zero.

By 2019 he had to sell his his wonderful big home to downsize a tiny home. This time he bought new constuction and got lucky bought at 2019 price in pre-construction and by time he sold old hom in spring 2021 was worth a lot more.

If that man only retired 5 years later he be a very rich man. He would have been pumping up 401ks and retirement funds in 2008-2012 when stocks were super low instead he was selling stocks. By time the 2019 to 2025 bull market came we are in now he had hardly any stocks. He was selling for a decade.

He also took a life time hit on his SS payments.

You kind of sound like me, always thinking about what could happen if/when you start withdrawing money. It's tough to change your mindset after decades of saving.

What you're talking about is sequence of returns risk and that problem can be mitigated by holding enough bonds to get you through the first 5-10 yrs of retirement. The failures that occur are due to people being extremely unlucky and also failing to make any changes in their withdrawal rate when things aren't going well during the first few years of retirement. You can also just plan on lowering your withdrawal rate to 2 or 3% and you will likely end up with more money than you know what to do with.