$7m in my brokerage, paid off house. Hopefully in 5 years. We plan to retire well before 59.5 so I am not even counting our 401ks

Anonymous wrote:Our HHI is about $450K and we’re 48 and 49 years old. Looking to retire in 12 years. Our number is $16M, all pre-tax. Want to make sure we have at least 30 years of retirement runway at the same standard of living we enjoy today.

We currently have $7.3M in our retirement accounts. Fingers crossed that the market continues to work in our favor.

Specific amounts aside, I wanted to reinforce this framework. It baffles me when people discuss their "net worth" number to determine when they will retire. To my mind, the amount invested (whether in retirement or taxable accounts) is the right number to focus on. I don't count cash, because that's to be used for an emergency nd to smooth out stock market dips, and I can't count on it making any money. I don't count home equity, because we have to live somewhere, and we'd need to sell or take out a home equity loan to access it. I don't count 529 funds, because they have an allocated use. I don't count short term savings that will be used for new cars, vacations, etc. because those are budgetary items, not savings. I don't even count ibonds, because in our plans, those are emergency backups, and we don't plan to use them for income generating purposes in retirement.

We have a net worth in excess of $5m, but our invested amount is around $3.1m. It would be nuts to base retirement decisions on net worth.

My wealthy friends, with expensive lifestyles, are aiming for $20M or even higher than that.

Of course they could be fine with less, but they are cognizant of their own expensive tastes and the fact they’ve raised their children to have expensive tastes.

Anonymous wrote:What difference does income have to do with retirement number?

It is how much you spend.

My income went from 160k to 450k over a period of time but my spending stayed the same. Same starter home, same used car.

Counselor, I think they are speaking to income as a reference point for how much they will draw down on an annualized basis.

Anonymous wrote:

Anonymous wrote:It doesn’t matter what you make. It matters what you spend, and what you plan to spend in retirement. $5M is only $150k/year at a 3% withdrawal rate. Is that enough for you? Only you know the answer.

We make $350k (but save a lot) and our number is $8M.

Your math is wrong. You should be able to withdraw much more than that. With 5M, even if it’s not invested and you keep it under your mattress, it will last 33 years if you withdraw 150k/year

Actually no, 3% of $5M is $150k so my math is perfect. That is the suggested retirement “rule.” You can object to the rule, but not my math.

Our HHI is about $450K and we’re 48 and 49 years old. Looking to retire in 12 years. Our number is $16M, all pre-tax. Want to make sure we have at least 30 years of retirement runway at the same standard of living we enjoy today.

We currently have $7.3M in our retirement accounts. Fingers crossed that the market continues to work in our favor.

We are "practicing" living on what we assumed we would need in retirement. 12K/month spend. I am not loving it. We just got a big increase in our homeowner's insurance, property tax went up, all our groceries have gone up, and while our healthcare insurance will supposedly go down with Medicare, we are looking at those numbers and they are not that much lower when you have any sort of money, and RMDs will definitely affect that. Not to mention we haven't taken any trips. And at 12K/month spend that is 150K before taxes, so reasonably can assume 180K drawdown.

All to say that what sounds great in theory is proving to be a challenge for us.

We are adjusting to 230K including taxes, which puts us at 6M + paid off house to feel comfortable. Would love to hit 7M.

But, as has been mentioned several times, it's all about expenses.

HHI closer to $375k. Retirement goal was $5m plus a paid off house and college fund but we met our goal sooner than planned. DH quit full time work and went to a low-stress PT job at 46. I’m still in my corporate job at 50 and while I could leave anytime, I’m not ready to retire. We are in Europe trying to spend more money.

The general theme here is that expected expenses form the basis of a retirement number. I totally agree. Just because your current income is large does not mean that you need anything close to it in retirement. If you haven’t allowed lifestyle creep and you adjust for current income taxes, payroll taxes, savings, kid expenses, etc. that won’t occur in retirement, you’ll quickly realize that you don’t need anywhere near your current income in retirement. If you’ll own your house in full, there’s no mortgage payment. Also, consider that you’ll get Social Security. Unless you’re just looking to shred money in retirement or want to leave a large estate for your children, $5 million is totally adequate. In fact, most retire with far less.

Anonymous wrote:In retirement, we do not need our $450k income. If there is no mortgage, no childcare, no saving for college, no saving for retirement, and social security income needs are way, way less. Assuming a plan for LTC (such as insurance) and a retirement age of 65, I would think $3m in future dollars would be a very comfortable retirement. There is always the risk of working too long for money that is not needed. Most people don't live to 95.

Agree. Only have this one life to live, not going to spend all of it stockpiling more money than necessary

In retirement, we do not need our $450k income. If there is no mortgage, no childcare, no saving for college, no saving for retirement, and social security income needs are way, way less. Assuming a plan for LTC (such as insurance) and a retirement age of 65, I would think $3m in future dollars would be a very comfortable retirement. There is always the risk of working too long for money that is not needed. Most people don't live to 95.

Anonymous wrote:We make exactly $450 and $5 million is our target (8-10 more years to get there). That does not include our home, our kid's 529, or a $70K pension. I honestly think we would be happy with $3 million, but we have to wait 8 years for the pension anyway. But another Trump presidency could make us quit and move before we hit that number...

A 70k pension though is like another 1.8M (and probably more assuming is govt and guaranteed) using the 4 percent rule.

I am PP, while we make $450K, so much of it goes to taxes (and in retirement our taxes will go down because we will have less income), put away into various investments, and to our kid's endeavors, that I think $10K a month after taxes would be great!

We make exactly $450 and $5 million is our target (8-10 more years to get there). That does not include our home, our kid's 529, or a $70K pension. I honestly think we would be happy with $3 million, but we have to wait 8 years for the pension anyway. But another Trump presidency could make us quit and move before we hit that number...

Anonymous wrote:It doesn’t matter what you make. It matters what you spend, and what you plan to spend in retirement. $5M is only $150k/year at a 3% withdrawal rate. Is that enough for you? Only you know the answer.

We make $350k (but save a lot) and our number is $8M.

Your math is wrong. You should be able to withdraw much more than that. With 5M, even if it’s not invested and you keep it under your mattress, it will last 33 years if you withdraw 150k/year