Anonymous
Post 06/21/2024 11:39     Subject: If your HHI is $450k, what is your retirement number
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?


Start investing the max you can in IRAs and 401k from age 20/22. My 25 has over $150K already in retirement.
Anonymous
Post 06/21/2024 02:35     Subject: If your HHI is $450k, what is your retirement number
Question: for withdrawals from IRAs etc., you don't need to pay payroll type taxes, correct?

Like social security, etc.

It would be just federal and state taxes on the income (your withdrawal)?

Anonymous
Post 06/20/2024 22:39     Subject: Re:If your HHI is $450k, what is your retirement number
We made your HHi for years. If your house is paid off and your kids are through college $5 million is great
Anonymous
Post 06/20/2024 19:13     Subject: If your HHI is $450k, what is your retirement number
Anonymous wrote:^^ this salery is new as of about 3 years ago when somebody got a new job and our savings went way high really fast. Never got a bonus before so what did we do? Invested it. No new spending.


+1. All bonuses and stock options went straight to the brokerage account.
Anonymous
Post 06/20/2024 19:12     Subject: If your HHI is $450k, what is your retirement number
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:I'm 51 and husband is 56. We make about $300k down from about $325K. Husband was laid off recently and found another job which didn't pay as well.

Our net worth is ~$5.4M investments/cash, $1M home, $600K college savings.

While I think we could retire now if we had to as 4% of 5.4M is $216K, 80% of this after taxes is $173K assuming health insurance of $30K that leaves about $12K per month in spending. So I think we are at FIRE now- but we won't exercise it yet.

$7M is really our magic number, which we may be able to achieve in the next 4 years depending on how the stock market does, but we might reconsider if we have another job loss which is not unlikely.

At $7M, we can withdraw the same $216K but that's only 3% so we have a better buffer in the stock market goes down. We should theoretically be adding each year to our net worth if we withdraw 3% (after taxes). If we decide to withdraw 4% some years for kids weddings, helping with a DPs etc, house upgrades, new or used car we will still feel good- that would give us an additional $50K per year for those years. I personally think with $7M, we won't struggle.


A decade ago, our number was $5m (outside of home equity), but we ended up with $7m+ before we retired, and I’m glad. We could be comfortable on $5m, but have been free to travel, make some generous charitable donations, buy nice new cars, set up 529s for the grandkids, etc. and still have slightly more than we started with. It’s nice to not have to worry when the market takes a dip.


I am too burnt out to bother appreciating ability to support my grandkids (that's sort of my kid's job?) and donating to charity.


Must be. My DH paid his own way through college and my parents struggled to help, but I ended up with loans, and not having to watch our kids struggle to send their kids to college is a source of happiness for us. If we don’t do this, we’d be leaving them money when they’re older and don’t need it as much, so why wouldn’t make their lives easier now? As for charity, we do enjoy giving to organizations that can better people’s lives, including scholarships for students at the colleges that sent us on the road to wealth. If that doesn’t make you happy, I have good news — none of this is mandatory in the United States of America.
Anonymous
Post 06/20/2024 19:00     Subject: If your HHI is $450k, what is your retirement number
Anonymous wrote:
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).


160K per year before tax is likely to be about 10K/month net. IMO it's pretty tight in a high COL area even if your housing is paid off because you also will incur high health insurance expenses before you reach 65. Our modest home has constant tax hikes due to prices rising, we are paying 2x of what we paid when we bought. Any dwelling would be about 2-3K overhead costs (RE tax, insurance, utilities, repairs/maintenance, outsourcing of things you cannot do yourself), this goes for condos/TH too which have fees. Add health insurance and you are likely already spending 5K just to live without even eating or buying any necessities, which will be another 2K if you are thrifty. If you want to buy any big ticket items, like upgrade your furniture, car, remodel you need to dig into your savings. If you want to travel and do some dining/entertainment that's easily 2-3K a month for nothing extravagant at all. There goes your 10K. Not a terrible retirement, obviously, but it's not really free of financial strain in case of big ticket spend. It's a life where you will have to decide between taking that vacation or fixing your house, or buying a new car because yours broke down and foregoing all travel that year including seeing family airplane trip away.


Agree. Amazing how many people here think they’re going to be happy having to dramatically change their lifestyle in retirement.
Anonymous
Post 06/20/2024 18:56     Subject: If your HHI is $450k, what is your retirement number
Anonymous wrote:I recently plugged our info into an online subscription planning tool. It has a good UI and seeing the income, taxes etc. in the future was eye opening.

Seeing some of these figures of $4M, $5M and above in this thread at pre-retirement ages makes me wonder if these folks know what their RMD's will be at age 75 on their tax deferred accounts.


Why do ou think “retirement savings” only include qualified accounts? This is why we only put enough $$ in our 401(k) to maximize the employee match and the the rest of our savings into brokerage (and still ended up with more in the qualified accounts than we need, but leaving the match $$ on the table would have been dumb).
Anonymous
Post 06/20/2024 17:17     Subject: If your HHI is $450k, what is your retirement number
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?


If you’re making 700k/ year one would think you’d understand the principle of compound interest. Obviously people who started investing in their early 20s are going to have exponentially more money than someone who started investing similar amounts in their mid thirties…especially given stock market trends over the past 10 years.
Anonymous
Post 06/20/2024 16:52     Subject: If your HHI is $450k, what is your retirement number
^^ this salery is new as of about 3 years ago when somebody got a new job and our savings went way high really fast. Never got a bonus before so what did we do? Invested it. No new spending.
Anonymous
Post 06/20/2024 16:50     Subject: If your HHI is $450k, what is your retirement number
Didn't have a number before reading this thread. HHI from w2 work is 650K. Brokerage accounts all told are about 3.25M. So my new number is 5. Given our savings rate, I hope to get there by the time my youngest goes to college (7 years) but might get there by the time they enter high school. Right now, that's all public. fingers crossed!
Anonymous
Post 06/20/2024 15:59     Subject: If your HHI is $450k, what is your retirement number
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?


You spend way too much damn money. We are 42 and I have been a SAHM for 16 years, since we were 26. DH started out making $165k (first year Big Law) but a few years later left that and has never made over $450k, and even that only recently. We have a NW over $4M not counting 529s that are fully funded and not counting the equity in our home (roughly $800k.)

You are living too fancy a life to accumulate wealth at the rate that we are. Its simply arithmetic.
Anonymous
Post 06/20/2024 12:53     Subject: If your HHI is $450k, what is your retirement number
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.


It's not dumb - we have a few million in 401(k)s that I will convert to Roth over the next 20 years at a sub 15% tax rate. The $7M will allow me to live with a very low tax rate since the only income will be dividends and potentially some capital gains. We have substantial carry forward losses that will allow us to live more or less tax free, even with conversions, for the next couple years.

I do not want to get stuck with a 72T distribution and I will retire before 55 so I can't touch that employer 401K without penalty until 59.5
Anonymous
Post 06/20/2024 12:49     Subject: If your HHI is $450k, what is your retirement number
PP again- oh I thought you said 3.1M in retirement- if that NW including house, you probably won’t get there.

I make 300k and have responded on this thread before but we are 5M in 50s.

We’ve never had a fancy car and my husband is very handy. Two incomes helps a lot too as you can double 401k savings.
Anonymous
Post 06/20/2024 12:47     Subject: If your HHI is $450k, what is your retirement number
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?


You are on target to have 5M by 50
Anonymous
Post 06/20/2024 11:23     Subject: If your HHI is $450k, what is your retirement number
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?