What is your "magic number" for retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

If anyone has ever inherited a stock portfolio you may have seen this. Both my mother and my MIL had similar stock strategies which was basically "all in, all the time, never sell" with no more than half their money in mutual funds/ETFs. Both started investing when there were no index funds. You invested in companies you knew. I'm also an all in, all the time, never sell but with index funds. When I inherited these old timey portfolios and took a few months to see what was what it was the first time I saw what widows knew: A robust portfolio of CAT, JNJ,KO etc lets you live off that income and let your portfolios grow for decades. I dont need the income now, but later on, for sure moving that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

Much riskier than the time tested formula.

[Anonymous]

I own my own home, but it is on an upper floor with no elevator. Seems like that is a bad longterm prospect.

Since my son is still in the phase of his life where he is likely to move around, should I rent somewhere more senior friendly (with the option of buying near him when he settles down)?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

If anyone has ever inherited a stock portfolio you may have seen this. Both my mother and my MIL had similar stock strategies which was basically "all in, all the time, never sell" with no more than half their money in mutual funds/ETFs. Both started investing when there were no index funds. You invested in companies you knew. I'm also an all in, all the time, never sell but with index funds. When I inherited these old timey portfolios and took a few months to see what was what it was the first time I saw what widows knew: A robust portfolio of CAT, JNJ,KO etc lets you live off that income and let your portfolios grow for decades. I dont need the income now, but later on, for sure moving that way.

Agreed. My FIL had a 1.2mm portfolio of dividend paying stocks that lasted him 50 years with a little left over at the end. He owned his home, had low expenses. In down years, the balance went down, but his dividend stocks continued to pay so that he could ride out the storm.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

If anyone has ever inherited a stock portfolio you may have seen this. Both my mother and my MIL had similar stock strategies which was basically "all in, all the time, never sell" with no more than half their money in mutual funds/ETFs. Both started investing when there were no index funds. You invested in companies you knew. I'm also an all in, all the time, never sell but with index funds. When I inherited these old timey portfolios and took a few months to see what was what it was the first time I saw what widows knew: A robust portfolio of CAT, JNJ,KO etc lets you live off that income and let your portfolios grow for decades. I dont need the income now, but later on, for sure moving that way.

Agreed. My FIL had a 1.2mm portfolio of dividend paying stocks that lasted him 50 years with a little left over at the end. He owned his home, had low expenses. In down years, the balance went down, but his dividend stocks continued to pay so that he could ride out the storm.

He died in his 80s, my MIL in her early 80s. Neither had much if any SS or pensions.

[Anonymous]

Anonymous wrote:I own my own home, but it is on an upper floor with no elevator. Seems like that is a bad longterm prospect.

Since my son is still in the phase of his life where he is likely to move around, should I rent somewhere more senior friendly (with the option of buying near him when he settles down)?

I am no expert here, but I might wait before selling. The minute you start renting you are throwing that money away.

But, you should do a cost comparison. How much does it cost you to live in your home? What does real estate look like in your area? How well will your property hold it's value? Then run the numbers on what it would cost to rent?

If your home value will probably to up, I wouldn't sell until you had to, or had a better idea where your DS is going to end up. But also in this day and age, people move more.

[Anonymous]

Thank you to whoever recommended the Portfolio Visualizer. Such a great and easy tool to adjust scenarios to see different outcomes. I generally use FireCalc, which I still like, but with this I was actually able to recreate what we have done (to verify it was correct) and then started playing around. It really helped see what different withdrawal rates did to the portfolio.

[Anonymous]

We are around $3.5M net worth including home equity of $400k and another $400k in 529. Our HHI rose drastically in the last two years and we are now able to save $250k-$300k per year. Another 10 years to work, we are 44 and 47. So thinking retire with somewhere around $7M net worth after paying two kids college. We both are in tech, so no guarantee that we will continue to be consistently employed or with high HHI.

[Anonymous]

early and late 50s here. We have 1.6 or so in assets, plus 2 pensions (probably worth about 2 million in terms of payout) and about 500k in equity. We are putting away about 55k/year and will do so for another decade. Then we will retire and live within whatever means we have. We may recalibrate if we need to. DH has a very flexible, easy and enjoyable wfh job so is not inclined to retire fully until 70 if all goes well.

[Anonymous]

Anonymous wrote:Thank you to whoever recommended the Portfolio Visualizer. Such a great and easy tool to adjust scenarios to see different outcomes. I generally use FireCalc, which I still like, but with this I was actually able to recreate what we have done (to verify it was correct) and then started playing around. It really helped see what different withdrawal rates did to the portfolio.

You’re welcome. As I’m sure you’ve figured out, you can also back test specific portfolios.

It’s fun to see what would have happened had you invested $50,000 in AAPL in 1997, for example.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

If anyone has ever inherited a stock portfolio you may have seen this. Both my mother and my MIL had similar stock strategies which was basically "all in, all the time, never sell" with no more than half their money in mutual funds/ETFs. Both started investing when there were no index funds. You invested in companies you knew. I'm also an all in, all the time, never sell but with index funds. When I inherited these old timey portfolios and took a few months to see what was what it was the first time I saw what widows knew: A robust portfolio of CAT, JNJ,KO etc lets you live off that income and let your portfolios grow for decades. I dont need the income now, but later on, for sure moving that way.

Great post, thank you.

I ran a backtest on portfolio visualizer on a total stock market index fund vs SCHD. While the TSM portfolio was a little larger, SCHD was throwing off significantly more income per year. At a certain point, portfolio size doesn’t matter if you’re receiving $200,000+ in income a year.

You gave me something to think about.

[Anonymous]

Anonymous wrote:Thank you to whoever recommended the Portfolio Visualizer. Such a great and easy tool to adjust scenarios to see different outcomes. I generally use FireCalc, which I still like, but with this I was actually able to recreate what we have done (to verify it was correct) and then started playing around. It really helped see what different withdrawal rates did to the portfolio.

I like cfiresim too— find it easier to use than firecalc but still has lots of capabilities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

If anyone has ever inherited a stock portfolio you may have seen this. Both my mother and my MIL had similar stock strategies which was basically "all in, all the time, never sell" with no more than half their money in mutual funds/ETFs. Both started investing when there were no index funds. You invested in companies you knew. I'm also an all in, all the time, never sell but with index funds. When I inherited these old timey portfolios and took a few months to see what was what it was the first time I saw what widows knew: A robust portfolio of CAT, JNJ,KO etc lets you live off that income and let your portfolios grow for decades. I dont need the income now, but later on, for sure moving that way.

Great post, thank you.

I ran a backtest on portfolio visualizer on a total stock market index fund vs SCHD. While the TSM portfolio was a little larger, SCHD was throwing off significantly more income per year. At a certain point, portfolio size doesn’t matter if you’re receiving $200,000+ in income a year.

You gave me something to think about.

What does this even mean? A smaller portfolio with less discretion about realizing income subject to taxes isn’t a good thing.

You can always sell off part of your holdings of a mutual fund— there’a no advantage to taking money out as dividends.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:While you loons are wasting your life away trying to get to $10M, many people are retiring with $600K and a paid-off house, using the strategies detailed in this article:

https://seekingalpha.com/article/4661283-how-to-invest-600000-in-2024-to-live-off-of-dividends-forever

this “strategy” requires SS which means i’d have to work until age 67🤮

no thanks. i’m out mid 50s so i’ll continue to power save.

No. The strategy basically says that you can have a much higher withdrawal rate if you focus on high-dividends stocks. Imagine being able to perpetually withdraw 7% from your portfolio instead of 3-4% – that’s possible if you ignore two mainstream pieces of advice:

1). Don’t buy bonds – they’re garbage.

2). Don’t limit yourself to the usual broad indices like the S&P and an international index. While almost nothing outperforms the S&P 500 long-term, in retirement, it is problematic because it pays low dividends and requires you to sell some of your shares. Because of this, you are a lot more dependent on market cycles and the price of stocks (i.e., sequence of returns risk), and you can only withdraw something like 3-4%.

If anyone has ever inherited a stock portfolio you may have seen this. Both my mother and my MIL had similar stock strategies which was basically "all in, all the time, never sell" with no more than half their money in mutual funds/ETFs. Both started investing when there were no index funds. You invested in companies you knew. I'm also an all in, all the time, never sell but with index funds. When I inherited these old timey portfolios and took a few months to see what was what it was the first time I saw what widows knew: A robust portfolio of CAT, JNJ,KO etc lets you live off that income and let your portfolios grow for decades. I dont need the income now, but later on, for sure moving that way.

Great post, thank you.

I ran a backtest on portfolio visualizer on a total stock market index fund vs SCHD. While the TSM portfolio was a little larger, SCHD was throwing off significantly more income per year. At a certain point, portfolio size doesn’t matter if you’re receiving $200,000+ in income a year.

You gave me something to think about.

What does this even mean? A smaller portfolio with less discretion about realizing income subject to taxes isn’t a good thing.

You can always sell off part of your holdings of a mutual fund— there’a no advantage to taking money out as dividends.

This would be for a tax advantaged account. I have a brokerage window.

Yes, agreed this is mental accounting. The warmth of a dividend blanket might not be the most optimal, but it sure does help prevent people from making stupid mistakes (sell when the market is down).