Live off returns of 401(k)?

[Anonymous]

For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

[Anonymous]

Principal

[Anonymous]

Depends on if I can pay off the mortgage before retirement. If yes, then primarily income. If no then principal.

[Anonymous]

I plan to spend 4% of it a year. If it's returns, good. If it's principle, good too. Likely I'll end up with a lot left. Maybe not, but who cares, I'll be dead.

[Anonymous]

Anonymous wrote:I plan to spend 4% of it a year. If it's returns, good. If it's principle, good too. Likely I'll end up with a lot left. Maybe not, but who cares, I'll be dead.

Principal

[Anonymous]

Anonymous wrote:I plan to spend 4% of it a year. If it's returns, good. If it's principle, good too. Likely I'll end up with a lot left. Maybe not, but who cares, I'll be dead.

This. It really just depends on what the market does, and how long and how much we keep in the market.

[Anonymous]

If I have about $2 million in an account I plan on living off the returns. That seems to be the sweet spot, at least for me.

[Anonymous]

Anonymous wrote:I plan to spend 4% of it a year. If it's returns, good. If it's principle, good too. Likely I'll end up with a lot left. Maybe not, but who cares, I'll be dead.

Same. With 4% withdrawal in the first year, and then indexed to inflation, the Monte Carlo simulators say it’s very likely not to run out.

[Anonymous]

Anonymous wrote:For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

DH and I just retired (both 55) and are predicting a 33-year life expectancy in retirement. We’ll withdraw 3% this year, all pre-tax, and then index that amount for inflation / COLA every year after. Don’t expect to have anything left at the end. We’re even planning to sell our house and use the proceeds to take a few extravagant around-the-world cruises to make sure our kids won’t be able to inherit anything from that.

We currently have $16M and plan to withdraw $480K this year, $495K in 2025, $509K in 2026, etc… This replaces about 75% of our working years’ HHI (was $622K last year), but we’re also not needing to save any more, so hopefully we’ll be okay.

Doesn’t include SS or small pension of $9K per month. Probably just use those income streams for fun money, Starbucks, etc….

Kids are on their own and, quite frankly, by design. We’ve raised them all to be hardworking self-starters. Nothing would be more embarrassing for or offensive to our kids than receiving an inheritance handout, so we do our best to spare them from this – one of life’s greatest signs of failure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

DH and I just retired (both 55) and are predicting a 33-year life expectancy in retirement. We’ll withdraw 3% this year, all pre-tax, and then index that amount for inflation / COLA every year after. Don’t expect to have anything left at the end. We’re even planning to sell our house and use the proceeds to take a few extravagant around-the-world cruises to make sure our kids won’t be able to inherit anything from that.

We currently have $16M and plan to withdraw $480K this year, $495K in 2025, $509K in 2026, etc… This replaces about 75% of our working years’ HHI (was $622K last year), but we’re also not needing to save any more, so hopefully we’ll be okay.

Doesn’t include SS or small pension of $9K per month. Probably just use those income streams for fun money, Starbucks, etc….

Kids are on their own and, quite frankly, by design. We’ve raised them all to be hardworking self-starters. Nothing would be more embarrassing for or offensive to our kids than receiving an inheritance handout, so we do our best to spare them from this – one of life’s greatest signs of failure.

For most people a pension of $9k/month is not small! Also, what happens if you die and don’t leave anything to your kids and one of them has something tragic happen to them and they cannot work?

[Anonymous]

You know about RMDs, right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

DH and I just retired (both 55) and are predicting a 33-year life expectancy in retirement. We’ll withdraw 3% this year, all pre-tax, and then index that amount for inflation / COLA every year after. Don’t expect to have anything left at the end. We’re even planning to sell our house and use the proceeds to take a few extravagant around-the-world cruises to make sure our kids won’t be able to inherit anything from that.

We currently have $16M and plan to withdraw $480K this year, $495K in 2025, $509K in 2026, etc… This replaces about 75% of our working years’ HHI (was $622K last year), but we’re also not needing to save any more, so hopefully we’ll be okay.

Doesn’t include SS or small pension of $9K per month. Probably just use those income streams for fun money, Starbucks, etc….

Kids are on their own and, quite frankly, by design. We’ve raised them all to be hardworking self-starters. Nothing would be more embarrassing for or offensive to our kids than receiving an inheritance handout, so we do our best to spare them from this – one of life’s greatest signs of failure.

For most people a pension of $9k/month is not small! Also, what happens if you die and don’t leave anything to your kids and one of them has something tragic happen to them and they cannot work?

Pretty sure that poster is messing with us. It would be a lot of work to spend money at that level and most normal people would not consider leaving kids money a tragedy.

My plan is to use my RMD to live on and supplement with dividends from my taxable account. The trick will be to have enough cash to span the years between retirement and RMD’s which are now age 75. I don’t have a great plan. Paying income tax on withdrawals may not be wise. I could take from my Roth. Also, I plan to deplete my HSA since those don’t inherit well. Honestly, I have trouble spending more than $150k a year and will likely have $5M invested assets at retirement so probably don’t need 4%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

DH and I just retired (both 55) and are predicting a 33-year life expectancy in retirement. We’ll withdraw 3% this year, all pre-tax, and then index that amount for inflation / COLA every year after. Don’t expect to have anything left at the end. We’re even planning to sell our house and use the proceeds to take a few extravagant around-the-world cruises to make sure our kids won’t be able to inherit anything from that.

We currently have $16M and plan to withdraw $480K this year, $495K in 2025, $509K in 2026, etc… This replaces about 75% of our working years’ HHI (was $622K last year), but we’re also not needing to save any more, so hopefully we’ll be okay.

Doesn’t include SS or small pension of $9K per month. Probably just use those income streams for fun money, Starbucks, etc….

Kids are on their own and, quite frankly, by design. We’ve raised them all to be hardworking self-starters. Nothing would be more embarrassing for or offensive to our kids than receiving an inheritance handout, so we do our best to spare them from this – one of life’s greatest signs of failure.

Hysterical. Well done use of sarcasm. Or you're a troll.

Regardless, bravo.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

DH and I just retired (both 55) and are predicting a 33-year life expectancy in retirement. We’ll withdraw 3% this year, all pre-tax, and then index that amount for inflation / COLA every year after. Don’t expect to have anything left at the end. We’re even planning to sell our house and use the proceeds to take a few extravagant around-the-world cruises to make sure our kids won’t be able to inherit anything from that.

We currently have $16M and plan to withdraw $480K this year, $495K in 2025, $509K in 2026, etc… This replaces about 75% of our working years’ HHI (was $622K last year), but we’re also not needing to save any more, so hopefully we’ll be okay.

Doesn’t include SS or small pension of $9K per month. Probably just use those income streams for fun money, Starbucks, etc….

Kids are on their own and, quite frankly, by design. We’ve raised them all to be hardworking self-starters. Nothing would be more embarrassing for or offensive to our kids than receiving an inheritance handout, so we do our best to spare them from this – one of life’s greatest signs of failure.

+100000

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For those of you who have saved at least a few million in your 401(k) (congrats!), are you planning to just live off the annual returns and preserve the entire principle for your kids, or is your plan to live very well and spend down a good amount of the principle? If you do plan to live off the returns, how much did you save?

DH and I just retired (both 55) and are predicting a 33-year life expectancy in retirement. We’ll withdraw 3% this year, all pre-tax, and then index that amount for inflation / COLA every year after. Don’t expect to have anything left at the end. We’re even planning to sell our house and use the proceeds to take a few extravagant around-the-world cruises to make sure our kids won’t be able to inherit anything from that.

We currently have $16M and plan to withdraw $480K this year, $495K in 2025, $509K in 2026, etc… This replaces about 75% of our working years’ HHI (was $622K last year), but we’re also not needing to save any more, so hopefully we’ll be okay.

Doesn’t include SS or small pension of $9K per month. Probably just use those income streams for fun money, Starbucks, etc….

Kids are on their own and, quite frankly, by design. We’ve raised them all to be hardworking self-starters. Nothing would be more embarrassing for or offensive to our kids than receiving an inheritance handout, so we do our best to spare them from this – one of life’s greatest signs of failure.

Hysterical. Well done use of sarcasm. Or you're a troll.

Regardless, bravo.

Agreed, this was very well done! Had me for the first couple paragraphs . . .