Looks like I need 6.2M to retire

[Anonymous]

Anonymous wrote:Most of the difference will come from growth in your portfolio. Even at a not-unreasonable 8% growth rate the investment will double in nine years even if you add nothing else (Rule of 72)

That only applies to a portfolio that is 100% securities which no one 10-15 years from retirement should be

[Anonymous]

Omg. You’re funny, OP.

That’s a good one.

[Anonymous]

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No. It should be calculated with your expenses and not your income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No. It should be calculated with your expenses and not your income.

I've never heard 10X expenses of income. More like 30X, though that is in hopes of not spending down principal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No, conventional wisdom is 30x your income, or less conservative, 25x your income.

I really would like to know how people think you need an income from your investments of $250k when retired. What on earth do you think you will be spending it on? That's our current household income with 2 kids, including saving a significant amount for retirement, kids college, and the random costs associated with kids. In 15 years we will have none of those costs/needs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No, conventional wisdom is 30x your income, or less conservative, 25x your income.

I feel like this whole thread is a joke. I hope

[Anonymous]

"The rule of 25 says you need to save 25 times your annual expenses to retire. To get this number, first multiply your monthly expenses by 12 to figure out your annual expenses. You then multiply that annual expense by 25 to get your FIRE number or the amount you'll need to retire."

[Anonymous]

Conversely, "Fidelity recommends having eight times your income by age 60 and ten times your income by age 67."

[Anonymous]

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

You need how ever much you want to live on. You must budget and calculate how much you need (after taxes) yearly. Then work backwards and figure out where it will come from.
Be sure to include costs for medicare and all the supplemental healthcare/medications/etc. It's only cheap if you have low income. At $250k/year income, you will be paying $1k/person/month (or more). So figure out your costs and what you want to spend monthly and figure out where you can get that money---interest, dividends, SS, etc. Once you start using principal then you need to make sure it will last you until 90+

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No, conventional wisdom is 30x your income, or less conservative, 25x your income.

I really would like to know how people think you need an income from your investments of $250k when retired. What on earth do you think you will be spending it on? That's our current household income with 2 kids, including saving a significant amount for retirement, kids college, and the random costs associated with kids. In 15 years we will have none of those costs/needs.

Depends upon your lifestyle. We are planning to retire at mid 50s. I've done calculations. We estimate we need $500K/year (after taxes) for how we want to live. That's with kids out of college (or in college but 529 fully funded so not much expenses for any kid). both homes are fully paid for, but this includes all property taxes, HOA, maintenance, etc. Then we add on the "extras we desire in retirement". Such as travel, sport tickets, concert tickets, dining out, wines, etc. to reach that number.
But yeah, I need about $250K as bare minimum to live and maintain our two homes, and that doesn't include much travel, dining out, anything "fun" or extra.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

You need how ever much you want to live on. You must budget and calculate how much you need (after taxes) yearly. Then work backwards and figure out where it will come from.
Be sure to include costs for medicare and all the supplemental healthcare/medications/etc. It's only cheap if you have low income. At $250k/year income, you will be paying $1k/person/month (or more). So figure out your costs and what you want to spend monthly and figure out where you can get that money---interest, dividends, SS, etc. Once you start using principal then you need to make sure it will last you until 90+

I am the PP but not the OP. My post was simply to point out what the “rule” was to question where OP is getting the 6.2 figure. I have no idea what OP actually needs

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No, conventional wisdom is 30x your income, or less conservative, 25x your income.

I really would like to know how people think you need an income from your investments of $250k when retired. What on earth do you think you will be spending it on? That's our current household income with 2 kids, including saving a significant amount for retirement, kids college, and the random costs associated with kids. In 15 years we will have none of those costs/needs.

I'm not the PP you're responding to, but do you possibly think that everyone's expenses are the same as yours? There is a huge list of variables in how/where people live. Property taxes alone vary from state to state, not to mention even zip code to zip code. Auto/house/umbrella insurance vary. Healthcare costs and insurance vary. Cost of living varies. And if you have more than one house, much of that list is doubled.

I have two high end cars, very expensive to insure.
We have expensive jewelry that is expensive to insure.
We live in an area that has high home owner insurance rates.
We have an HOA.

Am I complaining? No. I am just saying that it might cost you 45K to live, but it costs me a great deal more than that before I ever even think about taking a trip. So my NW at retirement needs to support what *I* spend.

[Anonymous]

Nearing retirement now. College and wedding of kids done. 200K pension. 2 million savings. House worth 800K, 200K left but because of low interest rates that we are not paying off. Hoping that we will retire in place. We are not including home in our net savings. Not counting SS either. I do not have long term disability insurance so I will have to be healthy (and I am not). So that is a bummer.

We live comfortably on 140K.

[Anonymous]

Anonymous wrote:Nearing retirement now. College and wedding of kids done. 200K pension. 2 million savings. House worth 800K, 200K left but because of low interest rates that we are not paying off. Hoping that we will retire in place. We are not including home in our net savings. Not counting SS either. I do not have long term disability insurance so I will have to be healthy (and I am not). So that is a bummer.

We live comfortably on 140K.

A 200K pension is a game changer. Congrats!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I thought conventional wisdom says you need 10xs your income. So you need 2.5

No, conventional wisdom is 30x your income, or less conservative, 25x your income.

I really would like to know how people think you need an income from your investments of $250k when retired. What on earth do you think you will be spending it on? That's our current household income with 2 kids, including saving a significant amount for retirement, kids college, and the random costs associated with kids. In 15 years we will have none of those costs/needs.

I'm not the PP you're responding to, but do you possibly think that everyone's expenses are the same as yours? There is a huge list of variables in how/where people live. Property taxes alone vary from state to state, not to mention even zip code to zip code. Auto/house/umbrella insurance vary. Healthcare costs and insurance vary. Cost of living varies. And if you have more than one house, much of that list is doubled.

I have two high end cars, very expensive to insure.
We have expensive jewelry that is expensive to insure.
We live in an area that has high home owner insurance rates.
We have an HOA.

Am I complaining? No. I am just saying that it might cost you 45K to live, but it costs me a great deal more than that before I ever even think about taking a trip. So my NW at retirement needs to support what *I* spend.

Yes of course different people have different expenses. You are rich and have a lot of rich people things. I am sure you make a lot more than $250k/year as a household.

My point is that a household currently living on $250k/year with 2 kids is very unlikely to need that level of income during retirement, especially if your home is paid off or nearly so. My mother has income around $70k/year between a pension and SS. Has never touched her retirement money.