When do you say "I've earned enough, its time to retire" and what do you do?

[Anonymous]

"yes, but that is gross income. She'll be paying 35% in income tax, which leaves her with $162,500. Still a livable amount if you dont have a mortgage, but you do have property taxes which can be $20k a year in a nice place. And then there's inflation. And seriously, I wouldn't quit my job even if I had a guaranteed $160k/year - that's not very much to entertain yourself all day every day, certainly not enough to travel as much as I'd want to do in retirement, or join a nice golf club, or eat lunch with my girlfriends a lot. Not saying that some people wouldn't be happy staying close to home and just volunteering a lot, but it's worth thinking about. "

How much net income do you, personally, live on now?

[Anonymous]

"We're approaching 50 yo and the $4mil number and like you, we're debt free and kids colleges are saved. DH feels he'll need to work (the same crazy amount he works now) til he's 65. Can you give me any guideline about how you came up with your "magic number" til you retire? "

Pretty straightforward. We have a target number for annual income, based on our projected spending, and a target earnings from investment. I have a small pension and DH has a middling pension, so we're planning to live off of more than the earning on $4 mil + SS.

[Anonymous]

Anonymous wrote:

How much net income do you, personally, live on now?

fair question, but not relevant in my opinion (although as I said in my post, it may be to someone else). The better question is what do I want to be able to do in retirement, and how much will I need to do that. I dont disagree that if DH and I had no mortgage and no college payments we could live on $200,000/year (just using a round number that is close to what we're talking about here). But If I were going to retire at age 50 (again, round number), that amount would not be enough to cover how I would want to live. I would estimate that at 50 I have at least 20 years of healthy living, and I'd get bored out of my skull during those years if I didn't have the money to travel a lot, eat at fabulous restaurants and see shows, take my kids places, possibly have a second home somewhere... $200k wouldn't cut it for that, particularly as the buying power declines over the next 20-30 years. I'd far rather work another 5 or 10 years, save additional money, and have a fabulous retirement. But my job doesn't make me miserable. To some people, the idea of not working is in and of itself so fabulous that they could happily do it on $200k. It's just something to think carefully about.

[Anonymous]

"But If I were going to retire at age 50 (again, round number), that amount would not be enough to cover how I would want to live. I would estimate that at 50 I have at least 20 years of healthy living, and I'd get bored out of my skull during those years if I didn't have the money to travel a lot, eat at fabulous restaurants and see shows, take my kids places, possibly have a second home somewhere... $200k wouldn't cut it for that,..."

In other words, you want to spend more disposable income in retirement than while you're working. I don't. I'd rather have the free time.

[Anonymous]

OMFG.

[Anonymous]

Anonymous wrote:"But If I were going to retire at age 50 (again, round number), that amount would not be enough to cover how I would want to live. I would estimate that at 50 I have at least 20 years of healthy living, and I'd get bored out of my skull during those years if I didn't have the money to travel a lot, eat at fabulous restaurants and see shows, take my kids places, possibly have a second home somewhere... $200k wouldn't cut it for that,..."

In other words, you want to spend more disposable income in retirement than while you're working. I don't. I'd rather have the free time.

exactly. Not sure how I'd occupy myself day in and day out without working if I didn't have more money than I do now, particularly as a relatively young retiree (by the time I'm 70 maybe I'll be happy to just volunteer a bit and garden and such). As I said, different strokes, but I'm sure I'm not the only one who feels this way, so as one PP suggested you have to figure out what you'd need to have the life you want in retirement and work backwards. I have had many relatives who retired and then just sat around bored until they died.

[Anonymous]

"exactly. Not sure how I'd occupy myself day in and day out without working if I didn't have more money than I do now, particularly as a relatively young retiree (by the time I'm 70 maybe I'll be happy to just volunteer a bit and garden and such). As I said, different strokes, but I'm sure I'm not the only one who feels this way, so as one PP suggested you have to figure out what you'd need to have the life you want in retirement and work backwards. I have had many relatives who retired and then just sat around bored until they died."

Oh. I plan to volunteer at least 20 hours a week in retirement. Don't you want to spend time with your grandchildren?

[Anonymous]

exactly. Not sure how I'd occupy myself day in and day out without working if I didn't have more money than I do now, particularly as a relatively young retiree (by the time I'm 70 maybe I'll be happy to just volunteer a bit and garden and such). As I said, different strokes, but I'm sure I'm not the only one who feels this way, so as one PP suggested you have to figure out what you'd need to have the life you want in retirement and work backwards. I have had many relatives who retired and then just sat around bored until they died.

So, you're saying that you make LESS that $250,000 per year now, and that's fine to live on, pay your mortgage, etc., have some fun, and save for retirement - but you wouldn't retire right now, today, if you had $10 million?

Sorry, but that's nuts. To paraphrase Ferris, a woman with such screwed up priorities doesn't deserve $10 million.

We make more that $250K, and if we had $10 million, I wouldn't go into the office to turn off my computer. And I like my job.

[Anonymous]

Anonymous wrote:

exactly. Not sure how I'd occupy myself day in and day out without working if I didn't have more money than I do now, particularly as a relatively young retiree (by the time I'm 70 maybe I'll be happy to just volunteer a bit and garden and such). As I said, different strokes, but I'm sure I'm not the only one who feels this way, so as one PP suggested you have to figure out what you'd need to have the life you want in retirement and work backwards. I have had many relatives who retired and then just sat around bored until they died.

So, you're saying that you make LESS that $250,000 per year now, and that's fine to live on, pay your mortgage, etc., have some fun, and save for retirement - but you wouldn't retire right now, today, if you had $10 million?

Sorry, but that's nuts. To paraphrase Ferris, a woman with such screwed up priorities doesn't deserve $10 million.

We make more that $250K, and if we had $10 million, I wouldn't go into the office to turn off my computer. And I like my job.

Also, a decent financial planner should be able to get you an average return of 6% per year, so that's an average of $600k/year. I'm sure PP could make do on that.

[Anonymous]

I would like to live in an RV permanently.
Unfortunately it is hard to find a place that does year round rentals.
so the only way to do it is to be on the move regularly

[Anonymous]

I would not think 10M is enough to retire on at age 40. I would not quit working, but maybe cut back on the most stressful aspects of your work life. I would not want to worry about money as I age. I want to have a nice cushion, not worry that rising costs will cut into my life style. I live a very frugal life, but love travel, nice restaurants, a few nice things, but nothing extravagant.

OP, can you cut back, but still keep working? Quitting entirely would bore you in a short time. But it's a nice problem to have. My magic number is 15M -- I could make do for the rest of my life if I hit that, but it's never going to happen for me! Work til I drop!

[Anonymous]

Anonymous wrote:I would not think 10M is enough to retire on at age 40. I would not quit working, but maybe cut back on the most stressful aspects of your work life. I would not want to worry about money as I age. I want to have a nice cushion, not worry that rising costs will cut into my life style. I live a very frugal life, but love travel, nice restaurants, a few nice things, but nothing extravagant.

OP, can you cut back, but still keep working? Quitting entirely would bore you in a short time. But it's a nice problem to have. My magic number is 15M -- I could make do for the rest of my life if I hit that, but it's never going to happen for me! Work til I drop!

But assuming $100k is a good income per person, so $200K per couple, a couple at age 40 only stands to earn $5M (ignoring inflation/cost of living increases) if they work until age 65. So surely $10M is more than sufficient. Perhaps purchase a lifetime annuity for steady income?

[Anonymous]

We did this on $5M, and it has been plenty. We don't splurge like we used to and have modest tastes, but are happy with our lifestyle, have a nice home and car, send kids to private school, and have savings for college. It is doable if you don't try to keep up with the folks still earning law-partner salaries. We enjoy a much slower and more relaxed pace of life, LOTS of time to be with and enjoy our kids, and keep busy with school, church and nonprofit volunteer work. I count my blessings every day. Go for it, OP, you won't regret it.

[Anonymous]

Anonymous wrote:"exactly. Not sure how I'd occupy myself day in and day out without working if I didn't have more money than I do now, particularly as a relatively young retiree (by the time I'm 70 maybe I'll be happy to just volunteer a bit and garden and such). As I said, different strokes, but I'm sure I'm not the only one who feels this way, so as one PP suggested you have to figure out what you'd need to have the life you want in retirement and work backwards. I have had many relatives who retired and then just sat around bored until they died."

Oh. I plan to volunteer at least 20 hours a week in retirement. Don't you want to spend time with your grandchildren?

We're talking about early retirement here, right? I'm in my late 30s and have a toddler and one on the way. No chance of having grandchildren before my 60s, maybe my 70s.

[Anonymous]

Anonymous wrote:

exactly. Not sure how I'd occupy myself day in and day out without working if I didn't have more money than I do now, particularly as a relatively young retiree (by the time I'm 70 maybe I'll be happy to just volunteer a bit and garden and such). As I said, different strokes, but I'm sure I'm not the only one who feels this way, so as one PP suggested you have to figure out what you'd need to have the life you want in retirement and work backwards. I have had many relatives who retired and then just sat around bored until they died.

So, you're saying that you make LESS that $250,000 per year now, and that's fine to live on, pay your mortgage, etc., have some fun, and save for retirement - but you wouldn't retire right now, today, if you had $10 million?

Sorry, but that's nuts. To paraphrase Ferris, a woman with such screwed up priorities doesn't deserve $10 million.

We make more that $250K, and if we had $10 million, I wouldn't go into the office to turn off my computer. And I like my job.

Actually, I never said we make less than $250k - we make more than that, but I dont think it's relevant. What I said was that if my choice was to retire at 50 with a $160k annuity, which is enought to not have to work but I would mostly be staying put or taking ordinary trips and trying to keep myself busy 24/7, or keep working for another 10 years at a job I like, build up more $, and retire later with enough money to do things like take my family on fabulous trips (high end safaris, chartered sailboats in the Greek Isles), I would pick the latter. YMMV.