Anonymous wrote:

Anonymous wrote:

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.

'You never paid for childcare.. We calculated that overtime with 2 kids it cost us around 1 mil with private preschool... in after tax money. And many people don't have 1person able to make 450K, it usually takes 2 income earners for this (much more common), which sucks you dry with childcare, outsourcing for some household tasks and takeout as it's tough to cook from scratch and do all the cleaning/outdoor work when you both work FT and have kids to take care of.

Anonymous wrote:

Anonymous wrote:

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.

It's them struggling at a younger age (better health, more energy) or you struggling in your 50s-60s with your health issues, older age fatigue/brain fog, having to keep up with younger workers, getting laid off or stuffed with more responsibilities, etc. Plus I am not averse to the idea of them living with us for free until they get on their feet. You can help in other ways other than sponsoring expensive party life at a $$$$ private school with all expenses paid, summers in Europe and then them earning 50K a year while relying on parents to pay for a nice urban rental, vacations and uber eats and happy hours.

Charity can f-off, let billionaires and those with tons of disposable income pay. We grew up poor in squalid small apartments, and our parents are dirt poor in old age, plus dead beat siblings. Charity starts at home for us.

Anonymous wrote:

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 wrote:

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 wrote:

Anonymous wrote:

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.

+1

Families who plan for a SAHP typically are financially savy and save well. You likely saved before being a SAHP, bought a home you can afford with only 1 income (even when you had 2), etc. We did that and banked the remainer for 5 years (had kids a bit later than you). When you save most of an 80K+ salary for 4-5 years and buy a house based on one income you will do well

Anonymous wrote:

Anonymous wrote:

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.

+1

We want to maintain the same lifestyle or better. We are downsizing a bit but have two homes (condo and smaller house), so it's actually a higher cost. Don't want to stress over bigger ticket items in retirement, so we planned and saved for a nice retirement.

Anonymous wrote:

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 wrote:

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 wrote:

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 wrote:

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.