Reply to How much to retire at age 55? We are 50

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]My husband and I make 300k combined and have close to 5M saved.  Our house is worth 700k and we have 500k in college savings for 2 kids.

Fidelity’s retirement investment calculator calculates that we’ll only be able to spend about 10k a month to weather a significantly below average market.m [b]but an average market would give our kids 100M[/b] when we die. Planning for the significantly below average scenario seems crazy conservative. I’d like to retire before age 55 with hopefully 6M.

Is 6M too low?  The 4 percent rule would suggest that we would be able to spend 240k per year which would be more than enough.

Thoughts?
TIA[/quote]

Surely you mean 10 million lol.[/quote]

DP.  I'm sure they mean 100mil.  Compound interest is a wonderful thing.[/quote]

How could they possibly get from $5 million to $100 million by the time they die if they're also planning to start spending their savings? Compound interest is wonderful but it doesn't get you 20x your starting point in 30 years if you're taking out 4 percent a year. Or if it does, I'm saving too much money myself, as our net worth is nearly $3 million and we have no plans to retire for another 20-25 years.[/quote]

In 30 years ---- $5 should be at least $80.  In addition they are adding each year when only pulling out $120.  So they are continuing to save and that compounds.  $100 million sounds right.[/quote]

In 30 years, $5 million would only be "at least $80" if you assume 10 percent growth per year, according to the compound interest calculator on investor.gov. That doesn't seem like a realistic expectation over a 30-year span, though, does it? I usually use 5 or 6 percent in calculating my own savings and future growth rates.[/quote]

Should double every 7 years on average.[/quote]

I suppose I plan on doubling every 10-15 years. Maybe I’m being too conservative but I’d rather have more money than I planned for than not enough. [/quote]

What is your planned investment strategy?  What is portfolio size?

For a largely equity invested portfolio that has significant value --- 10 years to double would be fine for planning.  15 is way too conservative.  If the portfolio is more bond focused, maybe.  [/quote]

I don't have a formal strategy other than "don't take money out of savings," "put as much in as you can," and "max out your 401(k)s." We have a financial adviser managing our non-401(k) accounts, which we pay low fees for because the same adviser is also handling my parents' significantly larger investments. What we have is about 90 percent equities, total value of about $1.3 million, plus another $500,000 in 401(k)s and $330,000 in 529s for elementary-school aged kids.

I guess I don't see any real downside to having saved more money than we need. Could we spend more now? Sure. But are we perfectly happy not spending more now? Yes. So why not just save it? At some point, I imagine, we'll also inherit some significant money from my parents, but hopefully that's decades off, and I'm not really accounting for that in my planning, either.[/quote]

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