Reply to Why wouldn't you retire on $5M?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]5 million is now the amount to retire on at 65. It is not enough to retire early. Why if we get a big bear market and recession a few years and Fed decides to go back to zero interest you are now liquidating assets at fire sale prices.

I know people who retired in 1999 and 2007 when stocks crash a year later and interest rates fell like a brick their money disappeared way quicker than anticipated.

My BIL semi retired 2007 quit his full time job took a 20 hour a week part time job with no benefits. He was getting great money in stock market and even his CDs and Money Markets paying great interest

By end of 2008 his stocks crashed 38 percent and his money markets, CDs and short term treasuries his "safe side" when interest rates fell like a brick in 2008 they money markets reset to near zero and every CD maturity and bond maturity reset to near zero.

By 2019  he had to sell his his wonderful big home to downsize a tiny home. This time he bought new constuction and got lucky bought at 2019 price in pre-construction and by time he sold old hom in spring 2021 was worth a lot more.

If that man only retired 5 years later he be a very rich man. He would have been pumping up 401ks and retirement funds in 2008-2012 when stocks were super low [b]instead he was selling stocks[/b]. By time the 2019 to 2025 bull market came we are in now he had hardly any stocks. He was selling for a decade.

He also took a life time hit on his SS payments.        [/quote]

Might that be the issue?  We plan on retiring early but that does not mean we’ll be selling stocks. (We aren’t in “stocks” we’re invested via index funds). We will have money set aside to cover 3 years of living expenses. The rest will stay invested in market with no plan of ever fully leaving market. 4M is our magic number. [/quote] So the money you “set aside”,  do you plan to spend all the principle and interest generated by that over the 3 years? And then you pull from the index funds for the next 3 years? [/quote]

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