Anonymous wrote:

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

That is nice. But I just heard you now need ten million to retire. It is a big milestone. But what gets me mad is I was told when did my first 401k if I hit one million I could retire rich!!, then around 10 years ago Suzie Orman started pushing you really need 5 million to retire. Ok, I get it inflation. Now in the last year or so people are pushing you need 10 million. They are staying 5 million is ok if you are 65 today but a 45 year old person will need at least 10 million by the time they retire.

When does it stop? I guess kids in college today will need 20 million to retire.

You're only just now discovering the concept of inflation?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can retire with basically nothing if you have a big enough pension or real estate. If you think that you need more than 5 mil, you probably have a spending/mental problem.

For those without a pension, $5M is only $150k a year on the 3% rule.

3% is very conservative. You can draw more than 3% and still be very safe.
But even $150k a year to use is more than enough once you stop saving.
We earn $300k and enjoy a very comfortable lifestyle in Arlington. We save around a third of our earnings. If our house were fully paid off, we could maintain the same comfortable lifestyle we have now with just $150k.

Yes, 3% is very conservative. It started out as the 4% rule. Then some wanted to be more conservative but most advisors that I listen to/follow now think that even 4% is too conservative. Some go up to 5% as long as you keep a 60/40 split between stocks and bonds. And these rules are supposed to be so your money lasts at least 30 years.

You can earn 4.25% right now in a 10 year treasury, 5% in investment grade corporates. I am 61 and been slowly converting my portfolio to bonds, but am still working. I want the income stream to be up and running. The hard part is selling stocks and paying taxes to fund the bond portfolio, but want to lock in these rates.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

When do you expect to retire? We’re at 5.5M, and it’s hard to know what number is realistic. Not asking for advice; just curious what others are doing.

Op. In about 20 years

Most 40YO DCUMmers have $20M by now, per the latest threads. So, with $5M you're behind.

MOST? I am an estate planner and i'm not seeing this at all. Most are faaaaaaaaar below that.

We are at about 4 million (with our house paid off) and are in our early 50's. I'm going to work FT maybe another 10 years and then as much as I want after that.

Folks in dcumland are in a bubble and completely out of touch with how most Americans are living. The vast majority of people have very little if anything in retirement accounts and no pension.

Anonymous wrote:The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

This is incorrect.

The 4% rule assumes a portfolio, typically invested in 50% stocks and 50% bonds, will achieve an average annual return that exceeds inflation by roughly 3 to 4%.

If you move your investments to cash, then as inflation rises your money isn't keeping up with inflation, giving you less buying power over your remaining years.

Anonymous wrote:

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

That is nice. But I just heard you now need ten million to retire. It is a big milestone. But what gets me mad is I was told when did my first 401k if I hit one million I could retire rich!!, then around 10 years ago Suzie Orman started pushing you really need 5 million to retire. Ok, I get it inflation. Now in the last year or so people are pushing you need 10 million. They are staying 5 million is ok if you are 65 today but a 45 year old person will need at least 10 million by the time they retire.

When does it stop? I guess kids in college today will need 20 million to retire.

My dad tells me I (46) need $20M to retire. Kids will need 30-40 at this rate.

Anonymous wrote:The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

It's more like a guideline, not a rule. And that's not what it's says at all. Look at the withdrawal chart and terminal asset value chart and there are a lot of conclusions that you can draw from both charts. The study is also based on the past and you need to ask yourself if the US will continue to be #1.

Anonymous wrote:Health insurance is the issue, more so if one spouse was SAHM.

+1

Definately a factor. Late 50s and coverage for two of us is $2.8k per month for an EPO and that's only medical (no dental or vision) by 60 it's over $3k/month. and that is with a $9/$18k deductible!!!

We plan on $40-50k for medical expenses yearly. So retiring early can be costly from that perspective.

Anonymous wrote:The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

Absolutely, and what many overlook is that the 3% and 4% rule is just the minimum. It’s the safest rate for withdrawals that ensures you won’t run out of funds even in the worst situations. The most likely situation for most people won’t be disastrous.
Most people, about 90%, who only take out 3% end up leaving behind an estate that is significantly larger than what they had when they retired.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can retire with basically nothing if you have a big enough pension or real estate. If you think that you need more than 5 mil, you probably have a spending/mental problem.

For those without a pension, $5M is only $150k a year on the 3% rule.

We do not even spend $150k now for family of 4. I would dream about it if we can spend $150k including taxes, healthcare & everything but not housing for two of us.
Aim low, anything above will be cherry on top.

Same here. We live off about 100k per year including taxes and healthcare. Family of 3. We budget but I don't feel deprived. Everything else gets saved.

When we retire, we'll no longer be supporting our kid, and our home will be paid off. I see no reason why our lifestyle would change. I think we'll spend the excess on bucket list travel and, as we age, additional help at home.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We just crossed it, this morning, based on this market price advance. (Investment portfolio, not counting house.)

So that's $2.5M per person. Not enough to retire early.

Don’t listen to this person.

Enlighten us, why?

The 3/4% percent “rule” is based on zero growth upon retirement. Basically, moving all investments to cash upon retirement. Its simple at best but a foolish strategy

We recently retired at 61 with $5M in the bank - combination of investments and savings accounts. Primary house paid off, $1M in equity.

Monte Carlo simulations reflect 93% probability of success

Mortgage on second home, $1,750/month for another five years. Sell primary in five years, purchase downsize for $650K.

Plan on taking SS at age 67.

Financial plan reflects 2.75% inflation each year.

Our financial plan includes (each adjusted for inflation each year):
$200K LTC Insurance policy
$160K/year discretionary spending
$40K/year in travel up to age 75, $10K/year after that
$24K/year healthcare up to age 65, $12K/year after that
Two new cars every eight years.
Taxes on investment withdrawals

At 93, forecast is to have $5M left over, $2.5M with “bad timing” model, which reflects 12% portfolio downturn in first two years and increased inflation up to 4.75%.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can retire with basically nothing if you have a big enough pension or real estate. If you think that you need more than 5 mil, you probably have a spending/mental problem.

For those without a pension, $5M is only $150k a year on the 3% rule.

We do not even spend $150k now for family of 4. I would dream about it if we can spend $150k including taxes, healthcare & everything but not housing for two of us.
Aim low, anything above will be cherry on top.

That’s actually way more impressive to me than amassing $5M.

dp.. that's us, too, and that includes ACA insurance, which is ridiculously expensive. But we only have a measly $4mil saved. Anyways, I'm still gonna retire at 56 when the youngest goes off to college (with a funded 592) next fall. But, I want to travel more so our expenses may go up a bit.

Tomorrow is not guaranteed you know. Live a normal life. You could be dead tomorrow.

Congrats OP. Great achievement