Live off returns of 401(k)?

[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.

+100000

But how will you pay for healthcare?

[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?

It’s called life. They will face challenges and find solutions. PP’s kids are independent and don’t expect a handout. I inherited from my parents and gave it to charity because I have my own money.
Teach your kids how to fish and you feed them for life.

[Anonymous]

Anonymous wrote:

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.

+100000

But how will you pay for healthcare?

Their income is 480K. There’s plenty of money to afford healthcare.

[Anonymous]

Anonymous wrote:You know about RMDs, right?

I was gonna just post this.

You want to do a roth rollover when you can.

[Anonymous]

I'll follow the 4% rule but will probably modify 4% to 3 - 3.5% until I feel comfortable.

[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.

Haha. What a troll!!

[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.

I’m anticipating that life in most of the world including America will be a hellscape in the next 100 years (grandkids or great grandchildren). Food shortages, human mutations, pandemics, tampering with climate disasters, etc. I’m leaving my kids something and teaching them how to manage money.

[Anonymous]

Learned how to buy low, sell high and live off of the difference. Not touching the principle in big account, but adding to it. The money is not in 401k though.
I'm still young. Boss doesn't let me retire.
Kids have their own investment accounts.

[Anonymous]

We are thinking that if we have 9M @ 65 yrs old. All of it is in index fund. Dividend is 1.55%. We can use just 1.55% = $139k ( tax & health care 40%, spending 60%). We can keep index fund & not worry about the up & down of the market. We don’t think about RMD yet. If the money can double every 7 years, we hope that we can reach the goal 9M. 15 more years to go...

[Anonymous]

Anonymous wrote:

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.

The simulators say you likely won’t run out of money at 4% withdrawal rate, but it does *not* assume you never touch principal. It says you have high odds of not spending all your money in 30 years if you retire at 65. You might, or might not, have much money left at the end of 30 years. If you retire before 65, your safe withdrawal rate is lower.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You know about RMDs, right?

I was gonna just post this.

You want to do a roth rollover when you can.

That’s not always the best approach.

[Anonymous]

I'm going to withdraw 4% from my 401k at retirement, maybe 5%. We have substantial home equity so if we run out of money we can always sell the house and downsize.not trying to leave money to kids; they'll hopefully be old too by the time we pass.

[Anonymous]

The average 401k on DCUM is 5 million by RMD time. We all have paid off houses in Chevy Chase and Paid off Hones in Rehoboth and a paid off little condo on Florida for being a snow bird. We also have high govt pensions and govt medical in retirement.

Add in out trust funds and 20 million in stocks and the paid off luxury cars we will do fine when we retire

[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.

Haha. What a troll!!

Agree. Why is the PP so contemptuous of her children? No one is like this in real life. All the wealthy families I know, and I mean *all of the them* are leaving inheritances to their children and grandchildren, and also proactively setting them up now as it pays off greatly down the road. Wealthy grandparents pay for grandkids' education even if parents can afford it because it means parents can put the money into their own investments to grow for another 30 years.

And her numbers also make no sense. 16M will just grow faster and faster. The average annualized S&P return over decades is 10+% which means 1.6M PER YEAR. Even a few extravagant cruises will only make a tiny dent in that figure. They cannot run out of money unless they do really stupid stuff. But why would they? Just to spite their kids, who they clearly hate? Much better to donate it to charity.

[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.

“Small income stream of $9k per month” bwahahaha. I’ll take it if it’s so insignificant!