Anonymous
Post 01/17/2022 18:59     Subject: How much to retire at age 55? We are 50
Anonymous wrote: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 but an average market would give our kids 100M 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


4 % rule is not for early retirement, need to try 3/3.5%,
Also no one can be sure about the market in the next 5 years, so instead of 6 million, it could be 4 million
That with 3% rule would give you 120k per year.. also health care
Anonymous
Post 01/16/2022 17:07     Subject: How much to retire at age 55? We are 50
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:You don’t have five million if majority is in 401k. You can’t touch it really till 59.5.

Plus I am 59 now and trust me older kids are expensive. Plus there is “failure to launch” risk and possible grad school.

Also early retirement really sucks. I was laid off at 57 for six months and it was just me roaming around house getting in wife’s way. I had a severance package but still nothing to do.

Inflation is coming. Wait till a BIG Mac is $40 dollars, a Pizza $75 and a gallon of gas $25 dollars.



Can you say more about older kids being expensive? If by this you mean young adults, this is something I have not thought about at all. Curious to hear what kind of expenses you have in this area.


Let’s see I have three girls so chipping in three weddings, middle daughter wants to do grad school, younger daughter lawyer maybe. I got multiple cars. I can’t trade down houses as till kids married. Imagine me three single kids 27, 25 and 21 all bouncing back and forth home. Back and forth grad school then multiple weddings. And the cars and cell phone planes plus on your family medical plan.

My aunts 55 year old complex is loaded with kids 18-30. They don’t allow kids under 18. But many parents retire and young adults still at home.

I personally moved out for good at 29. I moved out at 23. Moved back 26 while in MBA then back out. My youngest sister stayed home till she married at 28.

The cheap period is when kids.

Heck my 80 year old MIL hosted Christmas a few weeks ago and fee 35 people and has 3 kids and 9 grandkids to buy gifts and visit.


My son just graduated with a CS in 3 years and is working and living at home. He contributes $1k/month to household expenses while trying to save money for a down payment and waiting for his girlfriend to finish her MS. We expect our kids to foot their own bill for their weddings, we may gift them some amount, may be $10k. I don't get this antiquated customer of parents of the bride paying for a lavish wedding.
Anonymous
Post 01/16/2022 17:00     Subject: How much to retire at age 55? We are 50
Anonymous wrote:
Anonymous wrote:You don’t have five million if majority is in 401k. You can’t touch it really till 59.5.

Plus I am 59 now and trust me older kids are expensive. Plus there is “failure to launch” risk and possible grad school.

Also early retirement really sucks. I was laid off at 57 for six months and it was just me roaming around house getting in wife’s way. I had a severance package but still nothing to do.

Inflation is coming. Wait till a BIG Mac is $40 dollars, a Pizza $75 and a gallon of gas $25 dollars.



Can you say more about older kids being expensive? If by this you mean young adults, this is something I have not thought about at all. Curious to hear what kind of expenses you have in this area.


Let’s see I have three girls so chipping in three weddings, middle daughter wants to do grad school, younger daughter lawyer maybe. I got multiple cars. I can’t trade down houses as till kids married. Imagine me three single kids 27, 25 and 21 all bouncing back and forth home. Back and forth grad school then multiple weddings. And the cars and cell phone planes plus on your family medical plan.

My aunts 55 year old complex is loaded with kids 18-30. They don’t allow kids under 18. But many parents retire and young adults still at home.

I personally moved out for good at 29. I moved out at 23. Moved back 26 while in MBA then back out. My youngest sister stayed home till she married at 28.

The cheap period is when kids.

Heck my 80 year old MIL hosted Christmas a few weeks ago and fee 35 people and has 3 kids and 9 grandkids to buy gifts and visit.
Anonymous
Post 01/16/2022 16:48     Subject: How much to retire at age 55? We are 50
Anonymous wrote:
Anonymous wrote:You don’t have five million if majority is in 401k. You can’t touch it really till 59.5.

Plus I am 59 now and trust me older kids are expensive. Plus there is “failure to launch” risk and possible grad school.

Also early retirement really sucks. I was laid off at 57 for six months and it was just me roaming around house getting in wife’s way. I had a severance package but still nothing to do.

Inflation is coming. Wait till a BIG Mac is $40 dollars, a Pizza $75 and a gallon of gas $25 dollars.



This is flat out false.


Pre 59.5 only at 55 from you last employer 401k anyhow. You should not touch it to 73.
Anonymous
Post 01/16/2022 16:18     Subject: How much to retire at age 55? We are 50
Are you a fat boy OP?
Anonymous
Post 01/16/2022 16:07     Subject: How much to retire at age 55? We are 50
Depends if you get very sick and need care or not. That will run $200k a year.
Anonymous
Post 01/16/2022 15:36     Subject: How much to retire at age 55? We are 50
Anonymous wrote:Still no answer to the health care question, OP. That's the biggest problem with any plan to retire early.


DP. I also plan to retire at a similar time and with similar resources to OP. For healthcare, I plan to purchase on the ACA with a subsidy. I will try to structure my withdrawals to generate as little income as possible (take from post tax accounts). That way, my tax return shows very little earned income and therefore a greatly or 100% subsidized healthcare premium. I also have an HSA which I can use to pay premiums.
Anonymous
Post 01/16/2022 15:32     Subject: Re:How much to retire at age 55? We are 50
Your current NW is $6.2M. You can retire now. Your money will keep making money - you don't need to leave kids $100M. Perhaps $50M is enough.

You can't live in fear of health scares. Ask me. Because if there is a health scare - you will be surprised at how little difference an extra million will make. My mom without health insurance (visiting) spent 1 night at the hospital, needed ambulance etc. The bill was $135k. All the money you painstakingly saved for 10+ years will go away in a flash. So many people get/will get sick in their 60s - start living now. We retired at 50 and 48 last year. My dad retired at 61 and passed at 64. DH's dad retired at 58 and passed at 75.
Anonymous
Post 01/16/2022 15:29     Subject: How much to retire at age 55? We are 50
Anonymous wrote: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 but an average market would give our kids 100M 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


No you’re screwed bozo
Anonymous
Post 01/16/2022 14:58     Subject: How much to retire at age 55? We are 50
Anonymous wrote: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 but an average market would give our kids 100M 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


Groundhog Day again. Humble bragging. You want a real answer, consult a financial advisor. I think you can afford it.
Anonymous
Post 01/16/2022 14:17     Subject: How much to retire at age 55? We are 50
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Still no answer to the health care question, OP. That's the biggest problem with any plan to retire early.


20k per year I’m estimating for Healthcare expenses.


Until you get sick.


Isn't that the point of the 20K? To buy insurance so you can deal with the sickness?
Anonymous
Post 01/16/2022 14:17     Subject: How much to retire at age 55? We are 50
Anonymous wrote:
Anonymous wrote:Two thoughts. First retirement is not a one way street but if you decide to reenter the labor market you will take a hit. Second, what’s your return assumption? Have you processed the fact that real interest rates are negative? What do you think that means?


Of course. If we retire , it would be very difficult to find jobs in our field again as we are very specialized unless we are willing to move etc. We are right now invested very aggressively for our age and have most in equities. Obviously if the stock market takes a big hit in the next few years we’ll be singing a different tune. My plan is before we retire to move 1M into safe assets. In 2008, our portfolio dropped by half and as traumatic as that was it was only 400k or so at that time- now it would be a much different story.


Yeah.. Tell me about it. We prob. had close to $1.5m at that time and it dropped to less than $1M. Now at $7.5, a 50% drop would be terrible. In my spreadsheet model, I assume a 50% drop sometime during the current year so the projected beginning balance for the next year is adjusted down 50% (if it doesn't happen this year, I just push it out to next year in my model on Jan 1). I just got to the point where things don't turn negative over the next 50 years even with the 50% drop in the next year. I also assume 5% investment growth, 3% expenditure growth and try to model in all known large expenses - college, home remodel, car purchase every 10 years, etc.
Anonymous
Post 01/16/2022 13:56     Subject: How much to retire at age 55? We are 50
Anonymous wrote:
Anonymous wrote:Still no answer to the health care question, OP. That's the biggest problem with any plan to retire early.


20k per year I’m estimating for Healthcare expenses.


Until you get sick.
Anonymous
Post 01/16/2022 12:43     Subject: How much to retire at age 55? We are 50
Anonymous wrote:Two thoughts. First retirement is not a one way street but if you decide to reenter the labor market you will take a hit. Second, what’s your return assumption? Have you processed the fact that real interest rates are negative? What do you think that means?


Of course. If we retire , it would be very difficult to find jobs in our field again as we are very specialized unless we are willing to move etc. We are right now invested very aggressively for our age and have most in equities. Obviously if the stock market takes a big hit in the next few years we’ll be singing a different tune. My plan is before we retire to move 1M into safe assets. In 2008, our portfolio dropped by half and as traumatic as that was it was only 400k or so at that time- now it would be a much different story.
Anonymous
Post 01/16/2022 12:36     Subject: How much to retire at age 55? We are 50
Two thoughts. First retirement is not a one way street but if you decide to reenter the labor market you will take a hit. Second, what’s your return assumption? Have you processed the fact that real interest rates are negative? What do you think that means?