What is your "magic number" for retirement?

[Anonymous]

$5M. I’m at about $5.2 NW and $4.8 in investments and plan to retire this year.

It either seems like a whole lot, compared to most people, or not much, compared to my big law colleagues.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This post scares me. A lot.

how much will you have in retirement?

You don't need $5mil unless you have huge expenses and/or want to travel in luxury a lot.

Think about what your expenses might be in retirement. Then pad it with an extra 20%.

My mom has Parkinson’s. She will need care costing 100k per year at some point. You can live a lone time with many diseases. Grandfather was chronically ill 40s and 50s. Could not work. Health disasters can blow through savings. For me, 3 million is the minimum I would be comfortable with to retire. My magic number is 4 million.

I can be prudent and have health insurance and savings, but there's no way I can save enough to cover all possible health disasters. And in some cases, money can't fix the problem.

People with Parkinson’s can be cared for for far less than 100K/ year in the DMV. Who are you talking to that is trying to scare you into spending this much?

[Anonymous]

People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

[Anonymous]

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

They are young and stupid. Weren't we all?

[Anonymous]

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Agreed. And most people's assumptions are based on a starting point and assume a minimum growth rate from there. But if someone retires at X amount, and the it proceeds to go down for an extended period of time, they further diminish their principle (which will then produce less and less income) until the markets turn around. So if you start with 5MM and it goes down long enough to hit 4MM or more, and your retirement success was predicated on 4% of 5MM, suddenly you're either living on less or having to take out a larger % of the 4MM.

The response is always, but historically..... But if you're caught retiring in one of the decades-long downturn, the historic returns don't mean anything to you. Best to run simulations on calculators like Firecalc that allow you to put in a shorter timeframe to see how your portfolio fares.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Agreed. And most people's assumptions are based on a starting point and assume a minimum growth rate from there. But if someone retires at X amount, and the it proceeds to go down for an extended period of time, they further diminish their principle (which will then produce less and less income) until the markets turn around. So if you start with 5MM and it goes down long enough to hit 4MM or more, and your retirement success was predicated on 4% of 5MM, suddenly you're either living on less or having to take out a larger % of the 4MM.

The response is always, but historically..... But if you're caught retiring in one of the decades-long downturn, the historic returns don't mean anything to you. Best to run simulations on calculators like Firecalc that allow you to put in a shorter timeframe to see how your portfolio fares.

Agree with both you and PP. It is important to always have a certain % in cash (to buy low) as well as a certain % (50%) of your needs met through predictable cashflow (e.g. pensions/SS/dividends/interest). Nest egg withdrawal would then be limited to 1-2%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Agreed. And most people's assumptions are based on a starting point and assume a minimum growth rate from there. But if someone retires at X amount, and the it proceeds to go down for an extended period of time, they further diminish their principle (which will then produce less and less income) until the markets turn around. So if you start with 5MM and it goes down long enough to hit 4MM or more, and your retirement success was predicated on 4% of 5MM, suddenly you're either living on less or having to take out a larger % of the 4MM.

The response is always, but historically..... But if you're caught retiring in one of the decades-long downturn, the historic returns don't mean anything to you. Best to run simulations on calculators like Firecalc that allow you to put in a shorter timeframe to see how your portfolio fares.

Agree with both you and PP. It is important to always have a certain % in cash (to buy low) as well as a certain % (50%) of your needs met through predictable cashflow (e.g. pensions/SS/dividends/interest). Nest egg withdrawal would then be limited to 1-2%.

That's easy to say, hard to do

[Anonymous]

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Lost decade maybe for those retiring. Everyone else was able to pick stocks up left and right at great prices.Buy on the way down, not up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Agreed. And most people's assumptions are based on a starting point and assume a minimum growth rate from there. But if someone retires at X amount, and the it proceeds to go down for an extended period of time, they further diminish their principle (which will then produce less and less income) until the markets turn around. So if you start with 5MM and it goes down long enough to hit 4MM or more, and your retirement success was predicated on 4% of 5MM, suddenly you're either living on less or having to take out a larger % of the 4MM.

The response is always, but historically..... But if you're caught retiring in one of the decades-long downturn, the historic returns don't mean anything to you. Best to run simulations on calculators like Firecalc that allow you to put in a shorter timeframe to see how your portfolio fares.

Agree with both you and PP. It is important to always have a certain % in cash (to buy low) as well as a certain % (50%) of your needs met through predictable cashflow (e.g. pensions/SS/dividends/interest). Nest egg withdrawal would then be limited to 1-2%.

That's easy to say, hard to do

The hard part is the capital accumulation. Once you have that, it's a matter of planning and not getting too greedy.

[Anonymous]

50 million.
70% there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Lost decade maybe for those retiring. Everyone else was able to pick stocks up left and right at great prices.Buy on the way down, not up.

Not really.. A lumpsum 100K investment beginning of '99 would have become $109K at the end of 2009. The same $ invested in equal monthly installments would have become $97,937.82. Source: https://www.officialdata.org/us/stocks/s-p-500/1999?amount=100000&endYear=2009

[Anonymous]

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Lost decade maybe for those retiring. Everyone else was able to pick stocks up left and right at great prices.Buy on the way down, not up.

Living through the lost decade was not fun. However, it made me wealthy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Lost decade maybe for those retiring. Everyone else was able to pick stocks up left and right at great prices.Buy on the way down, not up.

Not really.. A lumpsum 100K investment beginning of '99 would have become $109K at the end of 2009. The same $ invested in equal monthly installments would have become $97,937.82. Source: https://www.officialdata.org/us/stocks/s-p-500/1999?amount=100000&endYear=2009

That same $100,000 is worth close to $650,000 today.

Portfolio Visualizer

[Anonymous]

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Lost decade maybe for those retiring. Everyone else was able to pick stocks up left and right at great prices.Buy on the way down, not up.

Of course it's great for non-retired people to have a down market in which they can then buy. But that isn't the point of posting about down-cycle retiring for people who have run models that don't take into consideration that their portfolio could go down quickly and stay down for a decade.

Some people don't think about getting caught in a down cycle AFTER they are retired and then have no way to go to back to earning income which would enable retiree to not touch principle until markets turn around.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s". And I'm thinking, well .. maybe.

Lost decade maybe for those retiring. Everyone else was able to pick stocks up left and right at great prices.Buy on the way down, not up.

stocks didn't go down. they were flat. for a decade.