Reply to How much do we need to retire?

Forum Index » Money and Finances

Reply to "How much do we need to retire? "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous]I retired at 53 in the DMV about a decade ago with a net worth of around 4 million.  We’re now worth about $8 million because of market gains, watching spending etc.  $6.5 million of that is in retirement and brokerage accounts; the rest is home equity in our primary residence in DC and a second home in the country.  We still have a mortgage of about $600k but the interest rate is below 2 percent and the monthly payment is covered by the rent we get from renting our basement apartment so it’s a wash.  We collect about $45k a year in social security, which we started collecting when I was 62, and that and the rent we get from the basement combines to about $75k a year in income.  No pension.   Our kids launched before I retired.

Our “wish list” is/was remarkably similar to OP’s.  A year or two ago we met with a financial advisor to see how we were doing — only because it was offered for free by our brokerage firm and despite having already been retired for years — and we were told we had more than enough money to keep living how we are.  We were also told we could expect to have money left over for the kids and could self-fund long term care if necessary.  We were advised not to bother with long term care insurance.

Our annual budget is $240k, so we need to generate about $165k a year from our investments outside of income from SS and rent to cover this.  This includes taxes.  It also includes $40k a year for travel, which we have trouble hitting because it’s a lot.  This is about 2.5 percent of the current value of our investments, which is just fine.  But of course we only had half what we had at 55 then what we have now.

OP doesn’t need this much probably and there are of course differences between our situation and the one they contemplate.  We have the mortgage for one, and while it’s covered by the rent we still pay it and it’s in the budget.  Many of our other expenses are probably higher than OP’s because we have two homes and not one.  One thing that jumps out at me is that $1000 a month for groceries and eating out once or twice a week is far too low, as others have said.  You can easily spent that just on the eating out part.  Another thing that jumps out is $1000 a month in car payments.  Why wouldn’t you just plan on buying good but inexpensive used cars in cash?  How much driving do you plan to do?  In the last decade we have only bought one car . . .

My bottom line number for OP would be $4 million in the income generating part of your portfolio for a reasonable early retirement.  Anything lower than that and you’re watching your pennies too much, which is no fun.  That’s one thing that we have not had to do pretty much at all.

One final note. I am always puzzled by posters who say that you couldn’t retire this early without either going crazy or becoming boring and useless and worthless or whatever.  That could happen, I suppose, if you have defined yourself by your job or if you find out too late that you don’t have enough saved to enjoy yourself after all, but if you do, as we do, early retirement is an absolute joy. I don’t regret it for a millisecond. We are doing everything and anything that we want, we are always around to help out with our kids and grandkids, we travel, we go out, we have friends, we putz
around sometimes and do nothing, etc.  It’s all pretty great.

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics