And that’s the $5M point

[Anonymous]

Anonymous wrote:

Anonymous wrote:The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

This is incorrect.

The 4% rule assumes a portfolio, typically invested in 50% stocks and 50% bonds, will achieve an average annual return that exceeds inflation by roughly 3 to 4%.

If you move your investments to cash, then as inflation rises your money isn't keeping up with inflation, giving you less buying power over your remaining years.

Yes. Example: run a 3M cash portfolio through Firecalc. 3M starting balance in cash earning nothing. 120K annual spend over 30 years at 3% inflation. It shows 0% chance of success.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

That is nice. But I just heard you now need ten million to retire. It is a big milestone. But what gets me mad is I was told when did my first 401k if I hit one million I could retire rich!!, then around 10 years ago Suzie Orman started pushing you really need 5 million to retire. Ok, I get it inflation. Now in the last year or so people are pushing you need 10 million. They are staying 5 million is ok if you are 65 today but a 45 year old person will need at least 10 million by the time they retire.

When does it stop? I guess kids in college today will need 20 million to retire.

These people are idiots. Anyone who thinks you need $10M to retire is bad at math.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

That is nice. But I just heard you now need ten million to retire. It is a big milestone. But what gets me mad is I was told when did my first 401k if I hit one million I could retire rich!!, then around 10 years ago Suzie Orman started pushing you really need 5 million to retire. Ok, I get it inflation. Now in the last year or so people are pushing you need 10 million. They are staying 5 million is ok if you are 65 today but a 45 year old person will need at least 10 million by the time they retire.

When does it stop? I guess kids in college today will need 20 million to retire.

These people are idiots. Anyone who thinks you need $10M to retire is bad at math.

It's based on inflation expectations. It's not 10M today. However, beyond that, one's amount is entirely dependent on anticipated yearly spend, not some "magic" number.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

This is incorrect.

The 4% rule assumes a portfolio, typically invested in 50% stocks and 50% bonds, will achieve an average annual return that exceeds inflation by roughly 3 to 4%.

If you move your investments to cash, then as inflation rises your money isn't keeping up with inflation, giving you less buying power over your remaining years.

Yes. I’ve noticed over the years on boards like this that people confuse different “4% rules”. What works (according to the models & for a 30 yr retirement) is investing in a mixed portfolio, removing 4% the first year, then increasing the dollar value removed each year based on inflation.

A “4% rule” that doesn’t adjust yearly for inflation is meaningless since inflation can vary widely

[Anonymous]

There is a big difference in what that $5M is worth depending on how much is in a Roth. $5M in a Roth could be worth as much as $10M in a traditional IRA, depending on where you live and your tax situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We plan to retire at $3.5M, for a comfortable $100k/year.

Thats considered low by today’s standards.

and when they die, they'll still have it. and it will grow. They will be fine.

[Anonymous]

Congrats, OP!

Some thoughts from Succession, ha.

<iframe width="560" height="315" src="https://www.youtube.com/embed/m0sRrsara9c?si=CHSUKc0gQi0C7-fP" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>

[Anonymous]

Anonymous wrote:Congrats, OP!

Some thoughts from Succession, ha.

<iframe width="560" height="315" src="https://www.youtube.com/embed/m0sRrsara9c?si=CHSUKc0gQi0C7-fP" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>

Ok, I don't know how to embed videos. But here's the bit:
Greg: I'm good, anyway, cuz, uh, my, so, I was just talkin' to my mom, and she said, apparently, he'll leave me five million anyway, so I'm golden, baby.

Connor: You can't do anything with five, Greg. Five's a nightmare.

Greg: Is it?

Connor: Oh, yeah. Can't retire. Not worth it to work. Oh, yes, five will drive you un poco loco, my fine feathered friend.

Tom: The poorest rich person in America. The world's tallest dwarf.

Connor: The weakest strong man at the circus.

[Anonymous]

I see the 10M goal as wanting a very comfortable retirement in a HCOL area that includes substantial “something” (travel, expensive hobbies, etc) in retirement.

Definitely more than is needed to survive but a nice to have and a buffer against the unknown in the economy.

If my job was miserable I would retire well short of that. Right now DH and I have pretty good employment options for the next 6-8 years, at which point we will hopefully retire somewhere in this neighborhood.

What is the downside with wanting to build this level of wealth? I certainly do not judge other’s choices, I have friends with a lot more and friends with a lot less.

[Anonymous]

These numbers are mostly made up I think. Certainly not representative of the majority of folks. Most people would be lucky to have $500,000 when they retire.

[Anonymous]

My parents retired with 2 million and a paid off house and 10 years later are doing fine. They are in their mid 70s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

This is incorrect.

The 4% rule assumes a portfolio, typically invested in 50% stocks and 50% bonds, will achieve an average annual return that exceeds inflation by roughly 3 to 4%.

If you move your investments to cash, then as inflation rises your money isn't keeping up with inflation, giving you less buying power over your remaining years.

Yes. Example: run a 3M cash portfolio through Firecalc. 3M starting balance in cash earning nothing. 120K annual spend over 30 years at 3% inflation. It shows 0% chance of success.

I'm curious what you think this "analysis" shows. The reason that it has a 0% chance of success has nothing to do with inflation, it's that $120k for 30 years is $3.6m, and you are starting with $3m and assuming no growth. If inflation were 0 forever, the nest egg would still only last 25 years. If you need Firecalc to tell you this . . .

You have effectively demonstrated that $3m is less that $3.6m. Congratulations, I guess.

P.S. Please retain the services of a financial planner, and perhaps a 5th grader to help you with the math.

[Anonymous]

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

OP, congrats on the family money. You’re full of it if you expect people to believe you accumulated this much by the time you reached 47 and did so without help.

[Anonymous]

Anonymous wrote:These numbers are mostly made up I think. Certainly not representative of the majority of folks. Most people would be lucky to have $500,000 when they retire.

+1 OP is lying. Probably crossed the $500K mark and added a 0 at the end to try to impress.

Even if OP has been dollar cost averaging into the S&P 500 for the past 30 years nonstop, she would have to have been contributing $3,500 per month for that entire time to have $5M today.I seriously doubt she was investing $42K per year in the stock market when she was 17!!

If she started later or accelerated contributions as she got older, her story is even more implausible. If she started saving just 5 years later for 25 years straight, what would have been $3,500 per month would instead have to have been $5,500 per month. Didn’t know too many 22-yo people in 2001 that were fresh out of college and able to sock away $66K per year. That’s like $130K in today’s dollars with inflation adjustment.

Nice try, OP!

[Anonymous]

No, it’s definitely possible with 2 people saving and investing.