High NW People - tell me about your retirement

[Anonymous]

Anonymous wrote:How did you accumulate that much on an income of $275K?

OP did not say how long he has been making that. Maybe he made a higher salary in a prior job.

Or maybe his wife had a high-paying job in the past.

[Anonymous]

Anonymous wrote:How did you accumulate that much on an income of $275K?

Oh, you didn’t read the are you rich thread…everyone making $250k has that much saved.

[Anonymous]

Anonymous wrote:OP here, thanks for the ideas. Taking it slow and planning some solid vacations seems to be the right choice for the next year as we decide. Job will work with me to allow more flexibility but I’d need to tell them what I want in advance.

The NW is pretty liquid, I didn’t think we needed exact #s at this level for this discussion. Anyone in the $6-15 M range is probably having roughly similar ideas. Given the market and my job, I’m not too anxious to buy a 2nd home right now.

You’re obviously not paying attention, and if you retire…what job?

[Anonymous]

“So, retire when you can afford to but have a plan for how to stay active, mentally engaged and give you time to enjoy life.”

This is the answer!

[Anonymous]

Unless you’re being careless with your money, anyone can retire on $10 million at 55. It’s all about the lifestyle you want, but any reasonable person could do it. No need to overthink this.

In fact, I retired with $5 million at 53 and have no regrets. My NW is higher today than when I retired.

Earlier, someone quibbled with another poster about including home equity in NW. Of course, it’s NW. Equity can be liquified with a HELOC or a move to a less expensive home or location. When we retired, we liquified $1.2 million when we sold a $2 million house near DC and bought a $800k house elsewhere in VA.

As others have said, the biggest issue in retirement is finding a new schedule. Half of you day can easily be consumed by daily exercise and the typical errands. The rest of your time may eventually beg for structure and meaning. What will your life amount to after 30 years of leisure? For many, it may not matter, but it bugs some of us.

[Anonymous]

What will your life amount to after 30 years of leisure?

Excellent distillation -

[Anonymous]

Anonymous wrote:How did you accumulate that much on an income of $275K?

Very doable if he’s been making 6 figures over 30 years with a high savings rate. I’m decades younger and make about the same. Just from what I have saved now will reach $7-8M from compounding at 7% with no further contributions. If I continue to earn and save another 25 years could be hitting 10-15M.

[Anonymous]

Anonymous wrote:What will your life amount to after 30 years of leisure?

Excellent distillation -

I keep working for 3 reasons:
(1) I became more risk averse as I grew older. I am 49, so the idea of living off my savings for potentially another 30 or 40 years gives me pause.
(2) I want to instill good work ethic in my children (kids are 9 & 11).
(3) I like the intellectual stimulation that comes with my work. Granted, I complain about many other aspects of the work, but the intellectual stimulation is fabulous. My father retired at age 65. And I feel like he is still struggling to find a purpose or a meaning... My mom has always been a SHW, so she just keeps on keeping on with gym, house projects, etc...

[Anonymous]

I retired from Biglaw in my early 50s about q decade ago and am now living quite comfortably off of an $8 million net worth supplemented by social security which we elected to take early despite not really needing it. We were lucky that the law firm allowed us to stay on their health insurance plan up until Medicare, an age to which I’ve not yet arrived. It’s made the premiums more manageable and predictable.

People often ask me how I “keep busy“ in retirement. My response is always “I didn’t know that was a requirement.“ Maybe I’d feel differently had I not hated my job for so many years, but I love waking up some days with literally zero on my plate and the complete freedom to do something or to do nothing. The one thing I make myself do every day is moderately excercise - I am in far better shape and health than when I was - but other that that I don’t worry about being busy or occupied. It’s a great feeling.

[Anonymous]

Anonymous wrote:I retired from Biglaw in my early 50s about q decade ago and am now living quite comfortably off of an $8 million net worth supplemented by social security which we elected to take early despite not really needing it. We were lucky that the law firm allowed us to stay on their health insurance plan up until Medicare, an age to which I’ve not yet arrived. It’s made the premiums more manageable and predictable.

People often ask me how I “keep busy“ in retirement. My response is always “I didn’t know that was a requirement.“ Maybe I’d feel differently had I not hated my job for so many years, but I love waking up some days with literally zero on my plate and the complete freedom to do something or to do nothing. The one thing I make myself do every day is moderately excercise - I am in far better shape and health than when I was - but other that that I don’t worry about being busy or occupied. It’s a great feeling.

This sounds great and also well deserved.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I need more details about how you’re calculating networth. For example, our home would sell for $2.2-2.3 and we owe less than $500k. So, for the sake of argument we have $1.8 in it.

3.5 million in retirement accounts + $30k in art/jewlery.

What else should we be including in networth? Cars? We have no debt, colleges are paid for. Is our networth approx $5 million? How do you have double that making $275k???

Anyone who needs to ask themselves how to calculate net worth, and is nickel and diming their material goods, does NOT have a high net worth. The point of calculating net worth is to assess how much you could liquidate for if need be. There are various ways to calculate NW, with or without one's primary residence and with and without one's valuables, but the fact of the matter is, you need a roof over your head, and your collectibles probably won't sell for that much, given commission and fees you will probably need to pay to unload them. My family has a lot of antiques and collectibles - it hardly ever sells for what you think it will. You could say you have around 4M in net worth.

I am not OP, but I have 10M+, solely because I made interesting choices decades ago in the stock market. I invested very little, but since most of it was in high tech, it worked out great. No inheritance, no high income. It happens.

Net worth is a defined term and that term does include jewelry, home equity, etc. What I use for retirement planning is liquid assets and use use the 4% rule to to see if it covers my (desired) cost of living, after accounting for other sources of income, such as pensions or investment property income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I need more details about how you’re calculating networth. For example, our home would sell for $2.2-2.3 and we owe less than $500k. So, for the sake of argument we have $1.8 in it.

3.5 million in retirement accounts + $30k in art/jewlery.

What else should we be including in networth? Cars? We have no debt, colleges are paid for. Is our networth approx $5 million? How do you have double that making $275k???

Anyone who needs to ask themselves how to calculate net worth, and is nickel and diming their material goods, does NOT have a high net worth. The point of calculating net worth is to assess how much you could liquidate for if need be. There are various ways to calculate NW, with or without one's primary residence and with and without one's valuables, but the fact of the matter is, you need a roof over your head, and your collectibles probably won't sell for that much, given commission and fees you will probably need to pay to unload them. My family has a lot of antiques and collectibles - it hardly ever sells for what you think it will. You could say you have around 4M in net worth.

I am not OP, but I have 10M+, solely because I made interesting choices decades ago in the stock market. I invested very little, but since most of it was in high tech, it worked out great. No inheritance, no high income. It happens.

True, but some of us also have a lot of $$$ tied up in things that I don't think should count in the definition of NW. For example, we have $3 million in equity in our primary residence and $600,000 in 529 plans. Those things make our NW look and feel materially higher when I include them.

[Anonymous]

Anonymous wrote:What will your life amount to after 30 years of leisure?

Throw in some philanthropy and quality family time, and it amounts to a life well lived!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I need more details about how you’re calculating networth. For example, our home would sell for $2.2-2.3 and we owe less than $500k. So, for the sake of argument we have $1.8 in it.

3.5 million in retirement accounts + $30k in art/jewlery.

What else should we be including in networth? Cars? We have no debt, colleges are paid for. Is our networth approx $5 million? How do you have double that making $275k???

Anyone who needs to ask themselves how to calculate net worth, and is nickel and diming their material goods, does NOT have a high net worth. The point of calculating net worth is to assess how much you could liquidate for if need be. There are various ways to calculate NW, with or without one's primary residence and with and without one's valuables, but the fact of the matter is, you need a roof over your head, and your collectibles probably won't sell for that much, given commission and fees you will probably need to pay to unload them. My family has a lot of antiques and collectibles - it hardly ever sells for what you think it will. You could say you have around 4M in net worth.

I am not OP, but I have 10M+, solely because I made interesting choices decades ago in the stock market. I invested very little, but since most of it was in high tech, it worked out great. No inheritance, no high income. It happens.

You should factor in how willing you are to liquidate those physical items. If they aren’t special to you and you could quickly sell them without any hard feelings then it makes more sense to add them to NW. Same thing with your house, if you live in a $2M house you absolutely love then it’ll be harder to access that equity vs someone who wouldn’t mind downgrading to an 800k house.

[Anonymous]

Using the 4 percent rule, your 10mm in net worth should allow you to spend $400k for the rest of your life but some feel a more conservative number is appropriate if under 65. Say 3.5 percent. So that’s $350,000…more than your salary. I say retire and enjoy yourself!