Anonymous wrote:Help me understand how there’s many folks here are in their 40s and have > $5MM in retirement accounts. I am 44 (DW is 46, SAHM), making ~700K/year (only the last few years, prior to that was ~350k), and have a net worth of $3.1MM. Granted I only started putting money in 401k/brokerage starting 10 years ago (have now 700k in retirement/brokerage accounts).

How did everyone accelerate to >$5MM at this same age range?

Anonymous wrote:

Anonymous wrote:$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

That's dumb. There are several good ways to get at the 401k money before 59.5. If retiring "well before 59.5" indicates you value time over having a bigger nest egg, yoy absolutely should be counting your 401ks.

Anonymous wrote:Help me understand how there’s many folks here are in their 40s and have > $5MM in retirement accounts. I am 44 (DW is 46, SAHM), making ~700K/year (only the last few years, prior to that was ~350k), and have a net worth of $3.1MM. Granted I only started putting money in 401k/brokerage starting 10 years ago (have now 700k in retirement/brokerage accounts).

How did everyone accelerate to >$5MM at this same age range?

Anonymous wrote:Financial advisors say $4.3M for us to retire extremely safely around 47-49 years old, live on $160K ish (in today's dollars) and be very good until 95, with a substantial amount left.

My math says more like $3.5M since we don't have any college to fund, don't want to leave much behind, and don't have any family member that lived past 85. They agreed that is probably fine, but they are cautious.

We've always spent a lot less than we earn so $160K to live on, adjust up over time for inflation, would be plenty. Their calculation also doesn't include any SS. I'm 40, so I think not including anything at all is overly cautious (but better than being reckless).

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Anonymous wrote: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.

Fascinated - can you provide a breakdown of your $12K / month spend? I can completely see how a mortgage & spending / saving for kids can get you to this number, but when you're retired, mortgage paid down, kids out of the house - do you really need that much?

That's what I thought. But then my health insurance premium went up as did our home insurance. (Were paying 4300/year. Changed to get 2800/year. One month in, they raised it and we are back to nearly 4300/month with a lesser company.) Water bill, electric, gas. Property taxes. All went up.

We have $250K @ 5.5% left on our mortgage that we are paying down 125K at a time with recasting. That will help, but by the time that is done, I'm guessing other expenses will also have creeped up. Also, my DH is on Medicare. Because of our income (that even in retirement won't change significantly, and will probably go up once RMDs start) he is paying $500/month. (I have downgraded my private plan and am paying $800/month with 6K deductible. Obamacare was more expensive for the same plan.)

I am hoping that once fully retired we can get things closer to 10K/month. But that's still 120K + income tax. And so far this year we haven't taken a trip and have only eaten out once. We haven't bought any clothes. No new cars.

I will say that financial newsletters and premium streaming adds probably $200/month. But we feel it's important to stay abreast of investments since we are DIY. And since not traveling or doing anything, we want to at least watch shows together. We don't have a landline or cable.

12K a month is not hard to spend. Even if your house is paid off in an expensive COL area taxes are 2x what they were 10 years ago. We pay 2K a months in just RE tax+insurance+utilities on a very modest home. Add healthcare costs at 2-3K a month for a family (our kids are still at home), add food and essentials at 2K a month, add kids activities and other expenses (500-1K) and that's just essential basic living, no travel, fine dining, big ticket items, luxury items, etc. No repairs, maintenance, outsourcing either. Basic life in a paid off modest home easily can run you 7K. If you want to travel, go out to eat, buy clothes outside of discount stores, entertainment (movies, concerts), you can blow through 12K budget without having to drive luxury cars or improve your home.

If you live in a huge new expensive home and accustomed to driving a nice car and traveling in comfort and not looking at prices for basics, and indulging in a few small luxuries or doing some little improvements to your home and especially if you have a second home, you need upwards of 20K a month net. Tell me where I am wrong.

You're not. I've always tracked spending closely and I average $12.5k/month in a small, paid-off home in a nice area, driving a couple of Subarus for me and my teen, who's in public school. I'm self-employed so health insurance is high, and of course car insurance for my teen is high, and something in the house always needs fixing. While there's certainly a lot of fat in my budget (we eat out a lot, have too many streaming services, and I'm generous with gifts and charity), I rarely buy new clothes and my only vacation so far this year was within driving distance.

It's a great life and I'm thankful to be able to provide it for me and my kid, but I'm more cost-conscious than I thought I would be with a paid-off home. I used to think I might upgrade my house once my business took off, but now I think the extra spending required would be too stressful.


Anyway, to answer the OP's question - $8M.

How do you arrive at 8 mil after describing such a modest lifestyle you seem to value? Holy sh**, how will anyone ever retire if you need so many millions to maintain a ho hum life in an old paid off house with subarus? Are you planning to start living large at 65? or do you all really strongly believe you must leave sizeable inheritance to your kids, god forbid they have to work for a living? You obviously all believe there will be no social benefits for you in any shape in old age...

Because $8M is only $240k a year? What part don’t you understand? (DP)

I don't understand. If you can make 5% yearly return on investment at low risk why wouldn't you? 5% of 4m investment is 200K, what is this 3% withdrawal rate BS? Do you have to let go of a concept that money can make money because you are retiring? You can live off your 5% and not touch the principal, which you can dig into for catastrophic things and leave the rest to your kids. Investments should keep up with the rate of inflation too, sure it's more work especially if different investment vehicles are used. If you did this while working ft job and raising kids before retirement why can't you do this after?

You're not making a safe 5% return. You are making 5% minus some level of income tax at those numbers. So you really need approx an 8% return to have 5% to spend.

Anonymous wrote:$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:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Fascinated - can you provide a breakdown of your $12K / month spend? I can completely see how a mortgage & spending / saving for kids can get you to this number, but when you're retired, mortgage paid down, kids out of the house - do you really need that much?

That's what I thought. But then my health insurance premium went up as did our home insurance. (Were paying 4300/year. Changed to get 2800/year. One month in, they raised it and we are back to nearly 4300/month with a lesser company.) Water bill, electric, gas. Property taxes. All went up.

We have $250K @ 5.5% left on our mortgage that we are paying down 125K at a time with recasting. That will help, but by the time that is done, I'm guessing other expenses will also have creeped up. Also, my DH is on Medicare. Because of our income (that even in retirement won't change significantly, and will probably go up once RMDs start) he is paying $500/month. (I have downgraded my private plan and am paying $800/month with 6K deductible. Obamacare was more expensive for the same plan.)

I am hoping that once fully retired we can get things closer to 10K/month. But that's still 120K + income tax. And so far this year we haven't taken a trip and have only eaten out once. We haven't bought any clothes. No new cars.

I will say that financial newsletters and premium streaming adds probably $200/month. But we feel it's important to stay abreast of investments since we are DIY. And since not traveling or doing anything, we want to at least watch shows together. We don't have a landline or cable.

12K a month is not hard to spend. Even if your house is paid off in an expensive COL area taxes are 2x what they were 10 years ago. We pay 2K a months in just RE tax+insurance+utilities on a very modest home. Add healthcare costs at 2-3K a month for a family (our kids are still at home), add food and essentials at 2K a month, add kids activities and other expenses (500-1K) and that's just essential basic living, no travel, fine dining, big ticket items, luxury items, etc. No repairs, maintenance, outsourcing either. Basic life in a paid off modest home easily can run you 7K. If you want to travel, go out to eat, buy clothes outside of discount stores, entertainment (movies, concerts), you can blow through 12K budget without having to drive luxury cars or improve your home.

If you live in a huge new expensive home and accustomed to driving a nice car and traveling in comfort and not looking at prices for basics, and indulging in a few small luxuries or doing some little improvements to your home and especially if you have a second home, you need upwards of 20K a month net. Tell me where I am wrong.

You're not. I've always tracked spending closely and I average $12.5k/month in a small, paid-off home in a nice area, driving a couple of Subarus for me and my teen, who's in public school. I'm self-employed so health insurance is high, and of course car insurance for my teen is high, and something in the house always needs fixing. While there's certainly a lot of fat in my budget (we eat out a lot, have too many streaming services, and I'm generous with gifts and charity), I rarely buy new clothes and my only vacation so far this year was within driving distance.

It's a great life and I'm thankful to be able to provide it for me and my kid, but I'm more cost-conscious than I thought I would be with a paid-off home. I used to think I might upgrade my house once my business took off, but now I think the extra spending required would be too stressful.


Anyway, to answer the OP's question - $8M.

How do you arrive at 8 mil after describing such a modest lifestyle you seem to value? Holy sh**, how will anyone ever retire if you need so many millions to maintain a ho hum life in an old paid off house with subarus? Are you planning to start living large at 65? or do you all really strongly believe you must leave sizeable inheritance to your kids, god forbid they have to work for a living? You obviously all believe there will be no social benefits for you in any shape in old age...

Because $8M is only $240k a year? What part don’t you understand? (DP)

I don't understand. If you can make 5% yearly return on investment at low risk why wouldn't you? 5% of 4m investment is 200K, what is this 3% withdrawal rate BS? Do you have to let go of a concept that money can make money because you are retiring? You can live off your 5% and not touch the principal, which you can dig into for catastrophic things and leave the rest to your kids. Investments should keep up with the rate of inflation too, sure it's more work especially if different investment vehicles are used. If you did this while working ft job and raising kids before retirement why can't you do this after?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Fascinated - can you provide a breakdown of your $12K / month spend? I can completely see how a mortgage & spending / saving for kids can get you to this number, but when you're retired, mortgage paid down, kids out of the house - do you really need that much?

That's what I thought. But then my health insurance premium went up as did our home insurance. (Were paying 4300/year. Changed to get 2800/year. One month in, they raised it and we are back to nearly 4300/month with a lesser company.) Water bill, electric, gas. Property taxes. All went up.

We have $250K @ 5.5% left on our mortgage that we are paying down 125K at a time with recasting. That will help, but by the time that is done, I'm guessing other expenses will also have creeped up. Also, my DH is on Medicare. Because of our income (that even in retirement won't change significantly, and will probably go up once RMDs start) he is paying $500/month. (I have downgraded my private plan and am paying $800/month with 6K deductible. Obamacare was more expensive for the same plan.)

I am hoping that once fully retired we can get things closer to 10K/month. But that's still 120K + income tax. And so far this year we haven't taken a trip and have only eaten out once. We haven't bought any clothes. No new cars.

I will say that financial newsletters and premium streaming adds probably $200/month. But we feel it's important to stay abreast of investments since we are DIY. And since not traveling or doing anything, we want to at least watch shows together. We don't have a landline or cable.

12K a month is not hard to spend. Even if your house is paid off in an expensive COL area taxes are 2x what they were 10 years ago. We pay 2K a months in just RE tax+insurance+utilities on a very modest home. Add healthcare costs at 2-3K a month for a family (our kids are still at home), add food and essentials at 2K a month, add kids activities and other expenses (500-1K) and that's just essential basic living, no travel, fine dining, big ticket items, luxury items, etc. No repairs, maintenance, outsourcing either. Basic life in a paid off modest home easily can run you 7K. If you want to travel, go out to eat, buy clothes outside of discount stores, entertainment (movies, concerts), you can blow through 12K budget without having to drive luxury cars or improve your home.

If you live in a huge new expensive home and accustomed to driving a nice car and traveling in comfort and not looking at prices for basics, and indulging in a few small luxuries or doing some little improvements to your home and especially if you have a second home, you need upwards of 20K a month net. Tell me where I am wrong.

You're not. I've always tracked spending closely and I average $12.5k/month in a small, paid-off home in a nice area, driving a couple of Subarus for me and my teen, who's in public school. I'm self-employed so health insurance is high, and of course car insurance for my teen is high, and something in the house always needs fixing. While there's certainly a lot of fat in my budget (we eat out a lot, have too many streaming services, and I'm generous with gifts and charity), I rarely buy new clothes and my only vacation so far this year was within driving distance.

It's a great life and I'm thankful to be able to provide it for me and my kid, but I'm more cost-conscious than I thought I would be with a paid-off home. I used to think I might upgrade my house once my business took off, but now I think the extra spending required would be too stressful.


Anyway, to answer the OP's question - $8M.

How do you arrive at 8 mil after describing such a modest lifestyle you seem to value? Holy sh**, how will anyone ever retire if you need so many millions to maintain a ho hum life in an old paid off house with subarus? Are you planning to start living large at 65? or do you all really strongly believe you must leave sizeable inheritance to your kids, god forbid they have to work for a living? You obviously all believe there will be no social benefits for you in any shape in old age...

Because $8M is only $240k a year? What part don’t you understand? (DP)

I don't understand. If you can make 5% yearly return on investment at low risk why wouldn't you? 5% of 4m investment is 200K, what is this 3% withdrawal rate BS? Do you have to let go of a concept that money can make money because you are retiring? You can live off your 5% and not touch the principal, which you can dig into for catastrophic things and leave the rest to your kids. Investments should keep up with the rate of inflation too, sure it's more work especially if different investment vehicles are used. If you did this while working ft job and raising kids before retirement why can't you do this after?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Fascinated - can you provide a breakdown of your $12K / month spend? I can completely see how a mortgage & spending / saving for kids can get you to this number, but when you're retired, mortgage paid down, kids out of the house - do you really need that much?

That's what I thought. But then my health insurance premium went up as did our home insurance. (Were paying 4300/year. Changed to get 2800/year. One month in, they raised it and we are back to nearly 4300/month with a lesser company.) Water bill, electric, gas. Property taxes. All went up.

We have $250K @ 5.5% left on our mortgage that we are paying down 125K at a time with recasting. That will help, but by the time that is done, I'm guessing other expenses will also have creeped up. Also, my DH is on Medicare. Because of our income (that even in retirement won't change significantly, and will probably go up once RMDs start) he is paying $500/month. (I have downgraded my private plan and am paying $800/month with 6K deductible. Obamacare was more expensive for the same plan.)

I am hoping that once fully retired we can get things closer to 10K/month. But that's still 120K + income tax. And so far this year we haven't taken a trip and have only eaten out once. We haven't bought any clothes. No new cars.

I will say that financial newsletters and premium streaming adds probably $200/month. But we feel it's important to stay abreast of investments since we are DIY. And since not traveling or doing anything, we want to at least watch shows together. We don't have a landline or cable.

12K a month is not hard to spend. Even if your house is paid off in an expensive COL area taxes are 2x what they were 10 years ago. We pay 2K a months in just RE tax+insurance+utilities on a very modest home. Add healthcare costs at 2-3K a month for a family (our kids are still at home), add food and essentials at 2K a month, add kids activities and other expenses (500-1K) and that's just essential basic living, no travel, fine dining, big ticket items, luxury items, etc. No repairs, maintenance, outsourcing either. Basic life in a paid off modest home easily can run you 7K. If you want to travel, go out to eat, buy clothes outside of discount stores, entertainment (movies, concerts), you can blow through 12K budget without having to drive luxury cars or improve your home.

If you live in a huge new expensive home and accustomed to driving a nice car and traveling in comfort and not looking at prices for basics, and indulging in a few small luxuries or doing some little improvements to your home and especially if you have a second home, you need upwards of 20K a month net. Tell me where I am wrong.

You're not. I've always tracked spending closely and I average $12.5k/month in a small, paid-off home in a nice area, driving a couple of Subarus for me and my teen, who's in public school. I'm self-employed so health insurance is high, and of course car insurance for my teen is high, and something in the house always needs fixing. While there's certainly a lot of fat in my budget (we eat out a lot, have too many streaming services, and I'm generous with gifts and charity), I rarely buy new clothes and my only vacation so far this year was within driving distance.

It's a great life and I'm thankful to be able to provide it for me and my kid, but I'm more cost-conscious than I thought I would be with a paid-off home. I used to think I might upgrade my house once my business took off, but now I think the extra spending required would be too stressful.


Anyway, to answer the OP's question - $8M.

How do you arrive at 8 mil after describing such a modest lifestyle you seem to value? Holy sh**, how will anyone ever retire if you need so many millions to maintain a ho hum life in an old paid off house with subarus? Are you planning to start living large at 65? or do you all really strongly believe you must leave sizeable inheritance to your kids, god forbid they have to work for a living? You obviously all believe there will be no social benefits for you in any shape in old age...

Because $8M is only $240k a year? What part don’t you understand? (DP)

I don't understand. If you can make 5% yearly return on investment at low risk why wouldn't you? 5% of 4m investment is 200K, what is this 3% withdrawal rate BS? Do you have to let go of a concept that money can make money because you are retiring? You can live off your 5% and not touch the principal, which you can dig into for catastrophic things and leave the rest to your kids. Investments should keep up with the rate of inflation too, sure it's more work especially if different investment vehicles are used. If you did this while working ft job and raising kids before retirement why can't you do this after?[/quote
]

You're not making a safe 5% return. You are making 5% - some level of income tax at those numbers. So you really need approx an 8% return to have 5% to spend.