What is your "magic number" for retirement?

Anonymous
4.2 as of this morning. also have two pensions - 1 fed and 1 private (small). i think we are okay and can go today if we wanted to
Anonymous
We have a $70K pension and probably another $80k from SS for both of us if we wait until 70 so our magic number is $5 million (not including equity in our home and our kid's 529). Hope to get there in 8 years (but only at $2+ million today).
Anonymous
Anonymous wrote:Our HHI were about $450 before we retired a little more than 2 years ago. Since everything is paid off, including all the rentals, our base annual expenses is about $85k. The rule of thumb of 70-80% of your salary is ridiculous.


Correct. That rule of thumb is for people earning actual middle class salaries. On this board of 1%ers, it's a stupid rule.

For us 10%ers, because we will have 2 pensions (at 4% draw, we'd need $2.5M to generate these amounts) plus SS (at 4% draw, we'd need $1.8M), plus current $500k home equity, our magic number is $1M. But if we had $0 in the bank, we'd live very comfortably on just the pensions and the SS-- about $175k per year, or 60% of current HHI. More than enough, even if we still carry a mortgage.

We are late 50s and plan to retire at 65.
Anonymous
I guess $5m. We are 47 and 53. We have about $3m in 401ks/iras (some are inherited so we have to take out over the next 10) and in non retirement accounts, plus $250k in college savings for a 14 yo and an 11 yo. Aim to work 10 more years.
Anonymous
We'd be at our magic number if we were older. But we're in our mid/late 40s with young kids so the general unknowns of the trajectory of the next 10 years makes the ultimate number much more of a question mark.
Anonymous
Anonymous wrote:We'd be at our magic number if we were older. But we're in our mid/late 40s with young kids so the general unknowns of the trajectory of the next 10 years makes the ultimate number much more of a question mark.



This does not make sense because I’ve had a magic number when I was 40 and I had a three-year-old at the time.
Anonymous
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Anonymous wrote: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.

there's a lot more ageism in tech than in other industries.

We didn't feel ageism (in tech) until we hit our 50s.

Luckily, we saved a lot from our 30s, and so we are planning to retire in our late 50s, early 60s in a few years, with about $4 mil nw.


Maybe I’m too much of a noob at my very large tech company, but I just don’t see the ageism thing. There are plenty of colleagues still going strong in their late 50s and early 60s. Maybe my company’s culture is just that good or that aware of age discrimination? I have no idea. But I’m early 40s and more frequently than not, the youngest person in the room or on the call.


I think there is a difference between something like IBM, 3M or even Microsoft and places like Meta or Tesla or even Google.


Noob here again and I work for one of those companies. So is the former group or the latter group the one that’s discriminating based on age? LOL, I’m clearly clueless about this.


It's the IBMs, 3M, Microsoft type companies that don't have as much age discrimination as the hot, newer companies that try to run young and now lean. Though I was just thinking today that with all their job cuts, I wonder if they are getting older and slower and trying to fix that.


It’s interesting you’d equate older with slower.

Anonymous
Anonymous wrote:As a ten year retiree I have found that excluding education costs we are spending a lot more now then when we were working even though we don’t have a mortgage. We travel a lot more both domestically and internationally and we’ve joined two clubs. The things we use to do ourselves like yard work now others do. We could be spending 50% more.


Wow!
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Anonymous wrote:My "I'd walk away without another thought" number is $10M (single, no kids, 50s).

I won't get to 10M absent some kind of windfall, but will likely retire with $3-4M TSP, $1M other, fed pension in the 150-200 range, $1M house paid off.


How are you getting a Fed pension of $150-200k? Are you dual Feds?


Never mind, saw you are single. How are you getting $150-200K pension? Doctor?


My parent was not a Fed but worked for the IMF. Currently receiving a $250K pension, and they weren't even high up or anything in the organization.

Pensions used to be insane back in the day.


If you stay with an organization that offers a pension for a very long time - think 25, 30 years or more - you can build up an enviable pension.
Anonymous
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Anonymous wrote:My "I'd walk away without another thought" number is $10M (single, no kids, 50s).

I won't get to 10M absent some kind of windfall, but will likely retire with $3-4M TSP, $1M other, fed pension in the 150-200 range, $1M house paid off.


How are you getting a Fed pension of $150-200k? Are you dual Feds?


Never mind, saw you are single. How are you getting $150-200K pension? Doctor?


I also wonder how you are getting 150-200K pension?


Some private companies still need offer pensions.


Yeah but PP mentioned a TSP account.

Which, not that I am reading about a single TSP with $3-4M, I am realizing PP is trolling.


Can’t 2 Feds do that?

1 fed, independent agency, advanced degree, very long tenure (at top of wage scale now), max tax deferred TSP contributions nearly all in equities for the whole time. TSP now nearing 3M. If retiring at 62, the internal pension calculator puts the pension in the 150-200 range. No, I'm not going to post my statements and W2. But it's possible and I am definitely not the only person in my agency in this situation.


What is an independent agency? Also, the all equities strategy is risky for those not early in their careers. 60/40 is the norm and I wouldn’t break too much with that unless I was very comfortable with risk.


Basically, this person is at an agency that is not on the GS scale and has its own pension plan and version of TSP.

I posted earlier. Am likely at the same agency but longer tenure and greater age. My TSP is considerably larger. All equities for decades but a year ago put 15% into governments and am still questioning why I bothered. Pension is effectively a huge bond portfolio. Am near retirement and switched to including a percentage of governments for dealing with RMDs when they come.


I am also at one of those agencies and I still don’t understand how one person is getting a $150-200k pension. Or has a $3-4M TSP in their 50s.

I am 45 and am no where near that. I am at the top of the scale and will have 35 years at 62. My pension (today’s dollars) is $95K. My TSP is $1.3M with a 10% match.

Only thing I can guess is that this is Fed Reserve Board or CFPB at the top of the scale with 38-40 years?


No, you can do this at your garden variety agency. My DH started working for them while getting his grad degree, so he has almost 40 years in service and he has always maxed his contributions to the tsp. They look at your high 3, so if you have been successful, you will do well.
Anonymous
Anonymous wrote:Wow. You folks rich.
We have 1.5M in our retirement accounts and we're both 55. Not enough, right? House is not paid off, One kid still in college.
I'll be working until I'm 80, and DH plans to retire at 75. We hope we'll have enough money to retire on by then. Both of us work in nonprofits. No way to acquire $5 million. Ha ha.


$1.5 M is nothing to sneer at. You will be fine, esp if you leave the high cost DMV.
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Anonymous wrote:My "I'd walk away without another thought" number is $10M (single, no kids, 50s).

I won't get to 10M absent some kind of windfall, but will likely retire with $3-4M TSP, $1M other, fed pension in the 150-200 range, $1M house paid off.


How are you getting a Fed pension of $150-200k? Are you dual Feds?


Never mind, saw you are single. How are you getting $150-200K pension? Doctor?


I also wonder how you are getting 150-200K pension?


Some private companies still need offer pensions.


Yeah but PP mentioned a TSP account.

Which, not that I am reading about a single TSP with $3-4M, I am realizing PP is trolling.


Can’t 2 Feds do that?

1 fed, independent agency, advanced degree, very long tenure (at top of wage scale now), max tax deferred TSP contributions nearly all in equities for the whole time. TSP now nearing 3M. If retiring at 62, the internal pension calculator puts the pension in the 150-200 range. No, I'm not going to post my statements and W2. But it's possible and I am definitely not the only person in my agency in this situation.


What is an independent agency? Also, the all equities strategy is risky for those not early in their careers. 60/40 is the norm and I wouldn’t break too much with that unless I was very comfortable with risk.


Basically, this person is at an agency that is not on the GS scale and has its own pension plan and version of TSP.

I posted earlier. Am likely at the same agency but longer tenure and greater age. My TSP is considerably larger. All equities for decades but a year ago put 15% into governments and am still questioning why I bothered. Pension is effectively a huge bond portfolio. Am near retirement and switched to including a percentage of governments for dealing with RMDs when they come.


I am also at one of those agencies and I still don’t understand how one person is getting a $150-200k pension. Or has a $3-4M TSP in their 50s.

I am 45 and am no where near that. I am at the top of the scale and will have 35 years at 62. My pension (today’s dollars) is $95K. My TSP is $1.3M with a 10% match.

Only thing I can guess is that this is Fed Reserve Board or CFPB at the top of the scale with 38-40 years?


If you are all equities, using the rule of 72 (sum doubles over ten years at 7% return), you likely will have $2.6M at 55 and $5.2M at 65. And that is without a single additional contribution. This is a good time to start directing all your contributions to your Roth instead--RMDs on a $5.2 M amount will be punishing.


Yes, we learned this way too late!
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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.


You have to factor in your own mental acuity in making these decisions in the last 20 years of your life. From your late 70s to late 90s, you may be better off with a portfolio that is throwing off money to keep your lights on and dental bills paid. For about half of us, someone else will be calling these shots by the time we get into our 80s. And if that's not ideal, then it's a good idea to NOT give people any reason to regularly touch the nest egg


I'll need the income. Otherwise my kids will say, "Sorry Pops, we decided it would cheaper - I mean better! - to pull all our teeth." They'll protect that capital.


Exactly! I saw a family member do that to his mother. He was so thrilled when she left a small inheritance.
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Anonymous wrote:My "I'd walk away without another thought" number is $10M (single, no kids, 50s).

I won't get to 10M absent some kind of windfall, but will likely retire with $3-4M TSP, $1M other, fed pension in the 150-200 range, $1M house paid off.


How are you getting a Fed pension of $150-200k? Are you dual Feds?


Never mind, saw you are single. How are you getting $150-200K pension? Doctor?


I also wonder how you are getting 150-200K pension?


Some private companies still need offer pensions.


Yeah but PP mentioned a TSP account.

Which, not that I am reading about a single TSP with $3-4M, I am realizing PP is trolling.


Can’t 2 Feds do that?

1 fed, independent agency, advanced degree, very long tenure (at top of wage scale now), max tax deferred TSP contributions nearly all in equities for the whole time. TSP now nearing 3M. If retiring at 62, the internal pension calculator puts the pension in the 150-200 range. No, I'm not going to post my statements and W2. But it's possible and I am definitely not the only person in my agency in this situation.


What is an independent agency? Also, the all equities strategy is risky for those not early in their careers. 60/40 is the norm and I wouldn’t break too much with that unless I was very comfortable with risk.


Basically, this person is at an agency that is not on the GS scale and has its own pension plan and version of TSP.

I posted earlier. Am likely at the same agency but longer tenure and greater age. My TSP is considerably larger. All equities for decades but a year ago put 15% into governments and am still questioning why I bothered. Pension is effectively a huge bond portfolio. Am near retirement and switched to including a percentage of governments for dealing with RMDs when they come.


I am also at one of those agencies and I still don’t understand how one person is getting a $150-200k pension. Or has a $3-4M TSP in their 50s.

I am 45 and am no where near that. I am at the top of the scale and will have 35 years at 62. My pension (today’s dollars) is $95K. My TSP is $1.3M with a 10% match.

Only thing I can guess is that this is Fed Reserve Board or CFPB at the top of the scale with 38-40 years?


No, you can do this at your garden variety agency. My DH started working for them while getting his grad degree, so he has almost 40 years in service and he has always maxed his contributions to the tsp. They look at your high 3, so if you have been successful, you will do well.


Your garden variety agency gets the standard pension of 1% of your top three per year- boosted up to 1.1 percent if you retire at 62 or older. So a 62 year old retiring with 40 years of service and a high 3 as a GS-15/10 would get 84k per year….a nice pension but nowhere near the numbers being bandied about above.
Anonymous
Anonymous wrote:You people are crazy. My number is $1.5 million. I should get there by age 45 (I’m single) but am checking out at that age anyway even if I’m a little short. Life is too short.


Agree. We have 2.2 million (mid-forties) with a toddler. We both aren’t loving our jobs, so we’re prepared to pull the plug in a year or two if worst comes to worst.
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