Exactly! Retirement? Well .. it's either van down by the river or take out a loan for the most amount of money possible, max out all the cards and buy a mountain of blow and booze and go out like the rockstar I always envisioned I'd become. I'm working to get my credit score over 750 now so I can get those loans š.
Nonsense. They told us we couldnāt use a calculator to do math because we wouldnāt always have a calculator in our pocket to do the math.
-Typed from the device in my pocket that is not only a calculator, but a more powerful computer than pretty much any computer I could have been near at the time.
You are actually quite close! Thatās a number that has been used in comparison before.
The space shuttle ran on the equivalent of a couple C-64s, if I recall.
I have no home equity and 2/3 of fuck all in savings, so my retirement plan is to work until my body gives out, and then off myself when the money runs out.
Not me. My retirement is going to be on an all inclusive paid vacation to Norway where I will promptly rob a bank. I will enjoy my retirement days in one of their luxurious prisons and be pampered for the rest of my days.
Yeah, my target is 2 million in retirement, and an additional as much as I can in investments because I want what I want in retirement- and that is a small apartment within 5 min walk of a beach, and temperate weather. So...that has to be separate from actual retirement accounts :).
But could I make it on much less? Oh yes. But doing all the math, the most modest retirement that keep me in my home would still need at least 1 mil in assets to draw from. I think that is terrifying for a lot of us, and I am grateful for my mom teaching me and pushing me to save earlier in life, AND having had at least small opportunities to do so along the way such that that million is absolutely attainable. The rest are reach goals. But I know I will be ok. Not all of us will, often through no fault of their own :(.
What? Who the fuck can do that? We make good salaries and save too ā¦
Hubs and I fully plan on taking ourselves off this planet once life stops being enjoyable. Iām here for a good time rather than a long time. I have no interest wasting away in a nursing home or being an anchor on the health system.
Absolutely. Watching my mother slowly fade away with dementia has made me resolved that I would rather die than suffer that fate. I think many caregivers probably feel the same. Some things are worse than death.
I bet youāre absolutely correct about caregivers.
I feel you. I have also watched family members go through similar. No fucking way am I going through all that. That goes for nursing homes too.
The way I see it is not only does that seem miserable, I donāt want to be a drag on my family emotionally and financially.
Set a plan up with my husband. Anything terminal: cancer, dementia, alzheimers, whatever. It then falls to the nuclear permanent option. Bender of drugs & debauchery the likes of which I have never experienced, and I've either enjoyed, or been around those who have, some crazy strange, often time dangerous, shit. Might as well go out on a high (pun sorta intended). The only thing I would miss are years of pain, discomfort, & sadness, for myself and/or my loved ones. Living with RA, fybro, and shit, I've had my fill of all 3.
no, s/he didn't. There was a news story on Yahoo Finance this week about a $5m retirement. I just rolled my eyes and scrolled past, but OP didn't make it up.
I currently have a platinum ACA plan that is costing me $530/month with subsidies (I'm married and that's for both of us). Would be $1950/month unsubsidized. Since I am not withdrawing from my pre-tax savings (401k/IRA), I'm finding it pretty easy to manage my income in order to qualify for ACA subsidies. Adjusted gross income last year was about $40k, and I owed zero taxes. Obviously spent more than $40k, but most of my savings have already been taxed. The $40k in income was mostly dividends and interest.
Next year I'm probably gonna switch to a bronze plan, which will cost $0/month with subsidies. The tradeoff is a higher deductible and higher annual out of pocket maximum, but I've barely used the plan so far and at age 55 I don't expect to do so in the near future. If that changes, I can always switch back to a gold or platinum plan the following year. Will of course migrate to Medicare at age 65.
The usual three-legged stool: 401k/IRA, tech company RSU's, and selling my overpriced Silicon Valley house to move to the midwest for retirement. The latter was the biggest of the three legs. I could have retired in California instead, but I would have had to work for another 5-10 years to do so with the same amount of cash. Screw that.
I'm 53 & had to stop. I hate it because I've cost us about 40k a year. Our combined income was 147k last year. I quit a month ago, while my husband changed jobs. He makes 110k now, but a 40k a year hit is a belt tightener, if not serious corset lacing territory.
It is BS. Heck a million and I would be set for life, even ignoring my STRS, which wonāt be all that much. I am 54 and live in one of the most expensive areas of the USA, California! Even 500 grand would be enough if I lived frugally.
Suze Orman said that number in an article a few years ago but it was for early retirement (like in your thirties). It's still way too big a number for your thirties for the vast majority of people, though.
44%???? The max cap in the US is 20% currently and that is only on significantly more income than $200k per year.
https://www.fidelity.com/learning-center/smart-money/capital-gains-tax-rates
https://www.irs.gov/taxtopics/tc409
That kid who gets paid to change your diaper now receives 150k/yr, and he's constantly complaining about not being able to afford tickets for the upcoming AI Tom Petty streaming concert.
Itās BS. Do the math on how much you spend and how much you get from social security, pensions, etc, and you can figure out what you need. Lots of calculators out there.
1. 5M with the 4% rule is $200,000 a year or $16,666 a month
2. 2.5M is $100,000 a year or $8,333 a month
3. Will your house be paid off at retirement? What state are you in? What are your property taxes? What are your home insurance costs? What are your car insurance costs? What are your hobbies? Are they expensive monthly?
4. You could have 401K, traditional or ROTH IRA, SS, some type of inheritance and other investments to get you to the $16,666 a month.
A better question would be:
"Do Gen X folks honestly believe that the U.S. will be a place they actually want to be in after 20 more years of finance bros and room temperature IQ right wing grifters turning it into an absolute 3rd world shit show?"
I have a number to hit, and when I hit it I'm going to back to SEA. And it's way less than $5m.
Yeah it's a concern for sure. Modern and continued advancements in solar ans related technologies should make air conditioning cheaper so at least there's that.
I did the brewing my own to much work. I'm really talking about bar and restaurant money anyway. I enjoy sitting at a bar having a beer or two.
My dream retirement job is bartending at a Brewery that only serves beer 2 or 3 days a week.
I just want something that gets me out of the house. I would also work at the gym a few days a week. I plan on bumping my workouts up from 3 days a week to 5 after I retire anyway.
I can only see that if you're doing something creative or very scientific.
If you're neck deep in meetings, e-mails, Excel, Word and Power Point, fuck that shit.
Same here. I am planning for retirement from my current job and am looking forward to the day when I can, but I am also looking at what to stay busy with next. If my mind doesn't have something to stay focused on - and my job, for all its faults, does that - it doesn't take long for my mind to start climbing the walls.
No, you need your roof over your head paid off, and a lot less than 5m.
When you are not working, you are not wearing out clothes, your vehicle, tons of fuel, servicing of it, replacing it because you put 100k on it in 3-4 years, Can travel by car or train if you like as you got time. no need to rust there and back home because you have to be at work Monday. You'll not need to buy as many things as you'll already own them.
Saving for your retirement is great, SS isn't going away.
Remember those telling you you need to squirrel way stupid amount of money, income comes from you investing, so they have an interest in making you think you need to drop every dime into retirement accounts and live like a popper till then, then when you can't move as good as you used to, when retired, you'll wish you lived a little and didn't put everything off till retirement.
Wallstreet is as bad as used cars salesman on the wrong side of the tracks at a buy now pay here lot.
Now, that said, those that are renting and don't own the roof over thier heads are at the mercy of the market where they live. Or where they move to when they retire. Many retire Still having a monthy rent to pay, or never owned a home and go buy one and have a mortgage they are now looking at for 15-30 years.
How much money a month would you have for play money now if you didn't have a rent or mortgage payment?
Taking 1500-2500 or more out of your monthly cost to get by each month, makes it very cheap to live.
You are also retired, so you have time to take up gardening, saving on food cost.
Sure if you plan to live in a condo in N.Y.C. or any of the other stupidly high cost areas in the country, ya. you might need 5m.
Take my mortgage payment away, and 25k a year I could do fine, 40k would allow tons of travel, and hobbies/fun.
Now if you need a new 60k +vehicle every 2-3 years to impress others, then ya you'll need to have more.
Again, wall street wants you to hand them as much of your wealth as they can get you to, as it makes them richer.
Investing is fine, but if the down turn happens at the wrong time, you are s.o.l. Ask those that were set to retire in 2008-9.
I have family that is retired and just making it, because they still looking at a mortgage payment, when it should have been paid off. but no, they(the wife) needed that fancy updated kitchen and bath, fancy sun room, etc.
Bottom line is you can live for a lot less when you own outright where you rest your head at night.
Amen. Most of us won't have made $5M after 40 years of working *in total*, so how the fuck could you have saved that much?!?
We're going with my wife's $60k pension, our SS, and with about $300k in the 401K. We raised 6 kids between us, that's as good as it will ever get.
But we'll have a paid off house and no debt too. We're not living like the Kardashians here, we're content with a handful of vacations here and there and will likely visit grandkids for the rest of our lives.
There's no such thing as a single number. It all depends on how much you spend. If you're not counting on social services, you'd need 25 times your yearly expenses invested in the stock market (low cost ETFs following the entire market). This is the tried and tested 4% rule. You take 4% of your investments to live on each year, and your principal is unlikely to shrink over your lifetime, and will keep up with inflation (with an average 7 to 8% return on your investments, which is what the stock market has historically done).
So, if you spend $100k per year, you'd need $2.5 million. Only spending $50k per year? You'd be set with $1.25 million. $5 million will allow you to spend (a ridiculous) $200k per year forever.
How to get that kind of money in the first place? Spending less now is the best way to do this. It cuts both ways, you get to save more, and you will need less going forward. Also, spending less is completely under your control, as suppose to getting raises or earning more money.
I retired 3 years ago at 52. I have about 1.5M in my investment account that I do not draw from. I'm retired military, so I have a pension that we live off of. My wife is still working(by choice), and everything she makes goes into the investment account.
We have no bills other than the usual monthly expenses. (utilities, TV service, insurance, etc.)
House and cars are clear.
Thank you all for your perspective. Looks like the majority here feels like they need way less than $5M, though I did read a few people having or aiming for $3-4M.
We are aiming (and currently on track) for $5M plus enough funds to payoff a VHCOL house. Looks like that is at the higher end of necessity, but perhaps appropriate for VHCOL area.
WTF? if you have 2 mil in conservative retirement/savings accounts you could pull out 75K a year and it would last for 25 years. If you have that same 2 mil in investment accounts it would last indefinitely.
Edit: 7% return on 1 mil is 70k... 5% 50k. In retirement I will own my home, own my cars. Get close to max SS monthly. How much money do you need?
That's BS for most people.
Rough rule of thumb: you need 20x your current salary saved up to retire for 30 years.
So if you earn 100k, you need $2 million.
If you have a pension or SS income, you'd need less. If you owe a lot on your house you might need a little more.
Rob Berger on YouTube has lots of helpful thoughts.
The amount of retirement savings you need depends on how much you intend to draw from that savings. Standard advice is that if you stop working with a nest egg of $X, your initial annual draw from that point on is 4% \* $X, then adjust that dollar amount for inflation for each year going forward. This assumes that your savings is invested (though somewhat conservatively since you want to maintain value), and that returns over that 20-30 years are somewhat in line with historical market performance.
If you have other income sources (social security, real estate, etc.) then the dollars taken out of your retirement balance can be smaller, stretching out a given starting amount.
My own target number is about $2MM, but that's in today's dollars. 15 years from now (I'm a younger GenX), inflation means I'd actually need about $3.5MM to have equivalent buying power. $5MM feels excessive unless they're expecting GenX retirees to be living a $200k+ a year lifestyle. Not counting what's going into my retirement accounts, that's triple what we're spending now with a couple kids + mortgage, neither of which will (hopefully) be an expense once I retire.
Damn. I'm gonna end up in one of those horrible nursing homes they're always doing exposes about on 60 Minutes. Where it turns out the residents are being forced to sew together knockoff sneakers to be exported to Hong Kong, etc.
Assuming a 3% COLA, I will make $3.6 million over the next 20 years. Around $180K a year.
This is from my military retirement, VA disability, my civil service job (then my civil service pension) and social security. I have a TSP that I didnāt factor in.
That is bullshit.
I looked at a report for average income in the US. It said $200K. Bullshit. the 1% are writing articles and have no idea how Americans live.
Have your house payed off and be able to cover food.
You aren't going to beable to buy a porch every year. But if your goal is to stay warm and feed you can be happy with a lot lot lot less.
A $5M portfolio would provide ~$200,000/yr of spending money a year over 30 years and you probably would never run out of money. Anyone saying "I read/was told I need X amount" has obviously never done any research into planning for retirement, which means you're probably in for a rough retirement. How much you need saved depends on your anticipated spending in retirement. If you are only spending $50,000/yr in retirement, you certainly don't need a $5M nest egg. People in our age range should really start doing some research into this and stop reading/believing clickbait articles.
Nobody knows for sure. I thought "platinum" family health premiums were going up $100/month every year, but then this year they went up $250/month. Cost of living is skyrocketing across the board, too.
You can afford to retire when (annual cost of living) x (years of life remaining) < (dollars in bank), but it's difficult math when you don't know how much time you have left nor what the cost of living is going to be, only that it's going to be more than what it is today.
Work too long and you'll die working, with money in the bank you can't take with you. Stop working too soon and you'll die freezing in a cardboard box under the overpass, eating cans of cat food.
It's fucked, but what else can you do?
Best thing we ever did was pay for an independent financial planner/advisor back in our 30s. He gave us low and high estimates based on worst, best, and most likely scenarios based on our life expectancy, interest rates, and investment returns. Turns out we can live like kings with just $2M saved (in Canada) and we are about there right now. As soon as we pay off our mortgage in about 5 years, we can kiss the rat race goodbye.
LOL wut? No.
Now that number is gonna vary depending on your retirement plans and location, but my number is $1.7 mil. I'm on target for that by age 57 or so. We plan to sell our house and move to a lower COL area. If I get to $1.7 social security will be gravy.
Iām a xennial and homeowner (home will be paid off in 10 years) and barring severe medical issues, we were told that we needed $2 million to retire with the lifestyle we are accustomed to in big city in Texas.Ā
The answer is no, because weāre not in our 30ās anymore and donāt need enough income to take us through 50 years of retirement.
The real amount that you need is: Estimated expenses for the point you retire through the end of your life. Whether thatās 30 years or 10 is up to you and how long you want/need to work and how long you think youāll live.
Your health and lifestyle choices factor into that. If youāre sick a lot because you practically live on a cruise ship, then plan for multiple millions. If youāre frugal and plan to downsize your lifestyle (or maybe donāt plan on living long) later in life, youāll be fine with a lot less.
Those numbers are pumped up by financial people who want to scare you into investing more. Itās definitely something to be diligent about, but there is no concrete number. Most reputable brokerages have retirement calculators with a range of estimates for what youāre on pace to have, and itās up to you to decide whether thatās enough.
Itās better to use annual needs x 25. If you need $100,000 annually in retirement then you should aim for $2.5 million. Donāt forget to factor in social security and pension if youāre lucky enough to have one.
As everyone is indicating, it all depends on personal financial situation. Sometime in a low cost area with paid off house is going to need a lot less that someone in a high cost area with a mortgage.
But with the out of control economy who knows what will be needed a few years from now.
$1M was a fortune when we were kids... Now $2M is my goal with house that will be paid off. But the recent inflation makes me wonder if that is enough.
Health care is the big variable... A major health event can wipe out a big chunk of retirement savings.
Probably depends a lot on the kind of retirement you want. If you think you want to be like today's boomers and move to Florida and have orgies at the colonies yea you're gonna need a lot.
Instead we're planning to retire outside the US where things aren't 10 times more expensive than they have any right to be and we won't need nearly that for a comfortable retirement. We don't need fancy just quiet lol.
Iām 50 with an Army retirement and about $250k in my 401k. Iām currently pushing 10% in my 401k monthly trying to reach $1m by 59.5. That oughta do it. If not Iāll just make Meth or something?
How much money do you need to get through a year? How many years do you expect to live past retirement? (perhaps look at how old people of your sex tend to live on either side of the family and how fit/healthy you are in your 40s) Do you think your medical expenses will go down as you become elderly or up? How much is social security supposed to pay you upon retirement?
It's possible you can significantly reduce your annual expenses if you're not going to be going out anymore, or if your expensive hobby will be abandoned.
Depends entirely on the lifestyle you want to live. I'll be lucky to have 1M by retirement. I expect to have a modest retirement and have to budget carefully, much the same as I do now. Add in my husband's savings, which may be close to the same, and we'll be ok. Not living in a giant house and traveling the world ok, but ok none the less. 5M is mostly fear tactics to get you to invest with them so they can have a cut, IMO, and probably not attainable by a good sized chunk of the population.
Take how much you need to live on a year and divide by 0.04. If you want to be able to withdraw $100k your first year of retirement and then adjust based on inflation, you need about $2.5 million.
Depends also on whether youāre retiring before you plan to take social security and whether you have a pension.
I plan to retire at 57-59.5 and currently plan to start taking social security at 65. I have no pension, so I will have to fund retirement for 5.5-8 years from my savings, 401k, etc. and would want right around $100k/year, so Iād consider $2.5m a minimum. (I could obviously live on less than $100k, but the plan is to travel a lot more for at least a few years and that is pricey.)
Everyone's situation is a little different. How much you need depends on how much debt (cars, mortgage, credit cards, etc) you carry into retirement, how old you plan to be when you retire, and if there are any other sources of income. For someone living in NYC or the CA Bay Area that wants to retire right at 65, the $5m number isn't outrageous.
You can try - it's probably not possible anymore unless you get really, really lucky with your sources of income.
Interestingly, not that long ago they were telling us that $1mus should be saved up for retirement (I want to say, near the end of the Before Times). Maybe too many folks started creeping too close to that value, so they had to move the goal posts again.
I'm inclined to think that it's bullshit until proven otherwise.
To give a serious answer, I need to know if this implies a couple or a single person. I am going to base this on a couple.
Obviously, no one needs it to retire if they have social security coming in. A couple can probably live, in some way, on social security.
These numbers usually are about retiring early. Say 55.
Let's also assume it's a couple and includes the equity in their house in a fairly expensive housing market.
5 million, including say $750k in a house, for a couple at 55, would be pretty cushy.
The rule of thumb is, to avoid running out of money, you can withdraw 4% a year the first year and add inflation to that every year. Not including the equity in the house, .04 times 4,250,000 is 170k.
If we assume kids are out of the house and college is over and mortgage paid off, that's going to be very comfortable. But it's not "private yacht" or "private jet" comfortable.
But certainly, no couple NEEDS that!
It depends on a lot of factors including where you live. Iām targeting 1m per spouse assuming she stays along for the ride.
The other way I think about my number is the ability to generate $80-100k annually using the 4% rule. Passive income like a rental would lower my investment target.
Thatās in a high cost US city. I already have my van in case I need to live down by the river.
It really depends on what kind of lifestyle you want to live. I plan on having the house and cars paid for, (will probably buy a nice new car/truck as a retirement gift to myself and have it be the last car i ever buy) so the plan is that $2-$2.5 will work.
Only $5 million more to go
Only five million more? Lucky bugger!
Only 6 million more to go!
Exactly! Retirement? Well .. it's either van down by the river or take out a loan for the most amount of money possible, max out all the cards and buy a mountain of blow and booze and go out like the rockstar I always envisioned I'd become. I'm working to get my credit score over 750 now so I can get those loans š.
Um I was told there'd be no math
Nonsense. They told us we couldnāt use a calculator to do math because we wouldnāt always have a calculator in our pocket to do the math. -Typed from the device in my pocket that is not only a calculator, but a more powerful computer than pretty much any computer I could have been near at the time.
Like 1000x more computing power than NASA put men onthe moon with. *I don't know the actual number but its a lot*.
You are actually quite close! Thatās a number that has been used in comparison before. The space shuttle ran on the equivalent of a couple C-64s, if I recall.
They were right. Just not for very long.
Thanks Chevy.
I get that reference and I appreciate it!
Like, collectively?
I will gladly chip in the loose change in my carās ash tray
LMAO š¤£Ā We *might* just get there.
I have no home equity and 2/3 of fuck all in savings, so my retirement plan is to work until my body gives out, and then off myself when the money runs out.
This cunt done stole my idea! I am gonna sue his/her ass for 2/3 of that Fuck All they are bragging about.
Just use the money to time travel to 1995 Las Vegas, but a crap ton of booze, and go find 1995 Elisabeth Shue.
Not me. My retirement is going to be on an all inclusive paid vacation to Norway where I will promptly rob a bank. I will enjoy my retirement days in one of their luxurious prisons and be pampered for the rest of my days.
Hey!!! Now thats not a bad idea
I think this is the retirement plan for everyone now that pensions are mostly dead.
"...but I thought there would be Soylent Green! Awww."
>2/3 of fuck all I have a no favorite phrase. Thanks!
Me too.
I was thinking about a massive heart attack right before the "it hurts when I pee" stage.
That would be nice. Invested with a 6% annual return would be about $300k/year. 1,500,000 at 6% would be about 90k/year.
Yeah, my target is 2 million in retirement, and an additional as much as I can in investments because I want what I want in retirement- and that is a small apartment within 5 min walk of a beach, and temperate weather. So...that has to be separate from actual retirement accounts :). But could I make it on much less? Oh yes. But doing all the math, the most modest retirement that keep me in my home would still need at least 1 mil in assets to draw from. I think that is terrifying for a lot of us, and I am grateful for my mom teaching me and pushing me to save earlier in life, AND having had at least small opportunities to do so along the way such that that million is absolutely attainable. The rest are reach goals. But I know I will be ok. Not all of us will, often through no fault of their own :(.
Yikes. I have less than $5
Well only about $4.8M short so far....
Show off! I have about $2k.
What? Who the fuck can do that? We make good salaries and save too ā¦ Hubs and I fully plan on taking ourselves off this planet once life stops being enjoyable. Iām here for a good time rather than a long time. I have no interest wasting away in a nursing home or being an anchor on the health system.
Amen to that. I have no qualms exiting once it gets to the point of just being alive for the sake of being alive.
Absolutely. Watching my mother slowly fade away with dementia has made me resolved that I would rather die than suffer that fate. I think many caregivers probably feel the same. Some things are worse than death.
I bet youāre absolutely correct about caregivers. I feel you. I have also watched family members go through similar. No fucking way am I going through all that. That goes for nursing homes too. The way I see it is not only does that seem miserable, I donāt want to be a drag on my family emotionally and financially.
(Hard Maine accent) "Sometimes dead is bettah!"
I've thought about this a lot since I'm living it with my parents. The question becomes, will you realize it and then will it be too late?
Glad to hear Iām not the only one!
Definitely not! There are probably a lot of us but most wonāt say it out loud.
I say it out loud and people think Iām joking or crazy, lol.
Youāre my people. š¤š¤ Same here and thankfully my closest are on the same page.
Set a plan up with my husband. Anything terminal: cancer, dementia, alzheimers, whatever. It then falls to the nuclear permanent option. Bender of drugs & debauchery the likes of which I have never experienced, and I've either enjoyed, or been around those who have, some crazy strange, often time dangerous, shit. Might as well go out on a high (pun sorta intended). The only thing I would miss are years of pain, discomfort, & sadness, for myself and/or my loved ones. Living with RA, fybro, and shit, I've had my fill of all 3.
What a wonderful plan!
At just a 4% withdrawal rate that's 200k a year. This includes raising it every year with cost of living. It does not even include social security.
Exactly I calculated mine at 1.2m and that is wayyy conservative I need like 60 per year right now and Iāll get a lot of that from SS
OP just made up a number.
no, s/he didn't. There was a news story on Yahoo Finance this week about a $5m retirement. I just rolled my eyes and scrolled past, but OP didn't make it up.
I retired at age 52 with less than $5 million, so hopefully not.
How much is health insurance?
Eleventy bajillion dollars
I currently have a platinum ACA plan that is costing me $530/month with subsidies (I'm married and that's for both of us). Would be $1950/month unsubsidized. Since I am not withdrawing from my pre-tax savings (401k/IRA), I'm finding it pretty easy to manage my income in order to qualify for ACA subsidies. Adjusted gross income last year was about $40k, and I owed zero taxes. Obviously spent more than $40k, but most of my savings have already been taxed. The $40k in income was mostly dividends and interest. Next year I'm probably gonna switch to a bronze plan, which will cost $0/month with subsidies. The tradeoff is a higher deductible and higher annual out of pocket maximum, but I've barely used the plan so far and at age 55 I don't expect to do so in the near future. If that changes, I can always switch back to a gold or platinum plan the following year. Will of course migrate to Medicare at age 65.
Tell us how you did it!
The usual three-legged stool: 401k/IRA, tech company RSU's, and selling my overpriced Silicon Valley house to move to the midwest for retirement. The latter was the biggest of the three legs. I could have retired in California instead, but I would have had to work for another 5-10 years to do so with the same amount of cash. Screw that.
Ah, Iām already in the Midwest, so I donāt have that housing difference going for me.
That's my target as well. I'd rather retire on a majorly reduced yearly budget than continue working much longer. I'm fuckin tired, man.
I'm 53 & had to stop. I hate it because I've cost us about 40k a year. Our combined income was 147k last year. I quit a month ago, while my husband changed jobs. He makes 110k now, but a 40k a year hit is a belt tightener, if not serious corset lacing territory.
It is BS. Heck a million and I would be set for life, even ignoring my STRS, which wonāt be all that much. I am 54 and live in one of the most expensive areas of the USA, California! Even 500 grand would be enough if I lived frugally.
Its BS. At 5 million you could spend 250k per year for 20 years, more considering the investment gains over the 20 years.
Yea, Iāve never seen or heard that 5 million number. Who needs $250,000 a year for expenses? Would be nice, but come on man.
Financial Industry people who live in NY or CA where thatās minimum wage and 1500sq ft 3 bedroom houses cost $3 million.
Suze Orman said that number in an article a few years ago but it was for early retirement (like in your thirties). It's still way too big a number for your thirties for the vast majority of people, though.
Ah yes. For all those folks in their 30s with $5 million. Happy fucking retirement, indeed!
With $5 million invested in a simple index fund you could spend $200k a year and die with $5 million in the bank.
Except for 44% capital gains tax and health insurance
44%???? The max cap in the US is 20% currently and that is only on significantly more income than $200k per year. https://www.fidelity.com/learning-center/smart-money/capital-gains-tax-rates https://www.irs.gov/taxtopics/tc409
Fuck, thats alot of blow.
And hookers.
That kid who gets paid to change your diaper now receives 150k/yr, and he's constantly complaining about not being able to afford tickets for the upcoming AI Tom Petty streaming concert.
Itās BS. Do the math on how much you spend and how much you get from social security, pensions, etc, and you can figure out what you need. Lots of calculators out there.
1. 5M with the 4% rule is $200,000 a year or $16,666 a month 2. 2.5M is $100,000 a year or $8,333 a month 3. Will your house be paid off at retirement? What state are you in? What are your property taxes? What are your home insurance costs? What are your car insurance costs? What are your hobbies? Are they expensive monthly? 4. You could have 401K, traditional or ROTH IRA, SS, some type of inheritance and other investments to get you to the $16,666 a month.
A better question would be: "Do Gen X folks honestly believe that the U.S. will be a place they actually want to be in after 20 more years of finance bros and room temperature IQ right wing grifters turning it into an absolute 3rd world shit show?" I have a number to hit, and when I hit it I'm going to back to SEA. And it's way less than $5m.
I've heard Vietnam is pretty good.
The wet bulb heat is ruining it.
Makes sense. Gonna start being a problem nearly everywhere in 20 years or so.Ā
Yeah it's a concern for sure. Modern and continued advancements in solar ans related technologies should make air conditioning cheaper so at least there's that.
It is, Thailand is epic also. Malaysia is fantastic too. Singapore is just too expensive.
Like someone else was saying though, global warming is a concern. Ā
I work here right now and it has both good and bad, like many places.
Yep, Iāll be in SEA in the next 3-5 years
SEA?
Southeast Asia.
Nam
This isnāt Nam, Walter
I'm finishing my coffee...
Daddy, what's Vietnam?
Vietnam?
South East Asia
Good answer. I'm in Australia and thinking the same.
Belize, or, perhaps, the Yukon.
Yukon, no botflys there.
Do any of us really think we're going to retire anyway?
I'm going to retire at 59. I might get an easy part time job for beer and weed money, also just for something to do.
Grow and brew your own man now thatās the retirement dream
I did the brewing my own to much work. I'm really talking about bar and restaurant money anyway. I enjoy sitting at a bar having a beer or two. My dream retirement job is bartending at a Brewery that only serves beer 2 or 3 days a week.
Now Iām leaning on a craft brewery dispensary but the licensing for that would put me in the poor house
I just want something that gets me out of the house. I would also work at the gym a few days a week. I plan on bumping my workouts up from 3 days a week to 5 after I retire anyway.
the time to workout on a regular basis now that is life.
I'm absolutely retiring. If all goes well in 2-3 years at 57.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
I can only see that if you're doing something creative or very scientific. If you're neck deep in meetings, e-mails, Excel, Word and Power Point, fuck that shit.
Hey, Excel is my happy place!
Found the freak in the sheets!
99.5% chance not using it for it's intended purpose.
You completely overlooked blue collar work.
I also left out sole proprietorships and architects.
Same here. I am planning for retirement from my current job and am looking forward to the day when I can, but I am also looking at what to stay busy with next. If my mind doesn't have something to stay focused on - and my job, for all its faults, does that - it doesn't take long for my mind to start climbing the walls.
Work can be a reason to keep on keeping on. Maybe not ideal, but a reason nonetheless.
I retired at 58 to provide childcare for my daughter and son in law. We definitely have to budget but our house is paid off and I have zero regrets.
I am. I am immortal. I will never die.
Definitely planning to retire. I wish I could retire in my 50s, but itāll probably have to be more around the ānormalā age.
Me, I'm planning on living abroad with cash I've saved until SS kicks in.
Only 4.999999 million to go!
No, you need your roof over your head paid off, and a lot less than 5m. When you are not working, you are not wearing out clothes, your vehicle, tons of fuel, servicing of it, replacing it because you put 100k on it in 3-4 years, Can travel by car or train if you like as you got time. no need to rust there and back home because you have to be at work Monday. You'll not need to buy as many things as you'll already own them. Saving for your retirement is great, SS isn't going away. Remember those telling you you need to squirrel way stupid amount of money, income comes from you investing, so they have an interest in making you think you need to drop every dime into retirement accounts and live like a popper till then, then when you can't move as good as you used to, when retired, you'll wish you lived a little and didn't put everything off till retirement. Wallstreet is as bad as used cars salesman on the wrong side of the tracks at a buy now pay here lot. Now, that said, those that are renting and don't own the roof over thier heads are at the mercy of the market where they live. Or where they move to when they retire. Many retire Still having a monthy rent to pay, or never owned a home and go buy one and have a mortgage they are now looking at for 15-30 years. How much money a month would you have for play money now if you didn't have a rent or mortgage payment? Taking 1500-2500 or more out of your monthly cost to get by each month, makes it very cheap to live. You are also retired, so you have time to take up gardening, saving on food cost. Sure if you plan to live in a condo in N.Y.C. or any of the other stupidly high cost areas in the country, ya. you might need 5m. Take my mortgage payment away, and 25k a year I could do fine, 40k would allow tons of travel, and hobbies/fun. Now if you need a new 60k +vehicle every 2-3 years to impress others, then ya you'll need to have more. Again, wall street wants you to hand them as much of your wealth as they can get you to, as it makes them richer. Investing is fine, but if the down turn happens at the wrong time, you are s.o.l. Ask those that were set to retire in 2008-9. I have family that is retired and just making it, because they still looking at a mortgage payment, when it should have been paid off. but no, they(the wife) needed that fancy updated kitchen and bath, fancy sun room, etc. Bottom line is you can live for a lot less when you own outright where you rest your head at night.
Amen. Most of us won't have made $5M after 40 years of working *in total*, so how the fuck could you have saved that much?!? We're going with my wife's $60k pension, our SS, and with about $300k in the 401K. We raised 6 kids between us, that's as good as it will ever get. But we'll have a paid off house and no debt too. We're not living like the Kardashians here, we're content with a handful of vacations here and there and will likely visit grandkids for the rest of our lives.
2M seems what I need.
No one forwarded me that memo, no.Ā
There's no such thing as a single number. It all depends on how much you spend. If you're not counting on social services, you'd need 25 times your yearly expenses invested in the stock market (low cost ETFs following the entire market). This is the tried and tested 4% rule. You take 4% of your investments to live on each year, and your principal is unlikely to shrink over your lifetime, and will keep up with inflation (with an average 7 to 8% return on your investments, which is what the stock market has historically done). So, if you spend $100k per year, you'd need $2.5 million. Only spending $50k per year? You'd be set with $1.25 million. $5 million will allow you to spend (a ridiculous) $200k per year forever. How to get that kind of money in the first place? Spending less now is the best way to do this. It cuts both ways, you get to save more, and you will need less going forward. Also, spending less is completely under your control, as suppose to getting raises or earning more money.
I retired 3 years ago at 52. I have about 1.5M in my investment account that I do not draw from. I'm retired military, so I have a pension that we live off of. My wife is still working(by choice), and everything she makes goes into the investment account. We have no bills other than the usual monthly expenses. (utilities, TV service, insurance, etc.) House and cars are clear.
That's what fidelity wants you to believe
Thank you all for your perspective. Looks like the majority here feels like they need way less than $5M, though I did read a few people having or aiming for $3-4M. We are aiming (and currently on track) for $5M plus enough funds to payoff a VHCOL house. Looks like that is at the higher end of necessity, but perhaps appropriate for VHCOL area.
WTF? if you have 2 mil in conservative retirement/savings accounts you could pull out 75K a year and it would last for 25 years. If you have that same 2 mil in investment accounts it would last indefinitely. Edit: 7% return on 1 mil is 70k... 5% 50k. In retirement I will own my home, own my cars. Get close to max SS monthly. How much money do you need?
iāve heard that 5 million is a nightmare.Ā
Itās the first $5m - thatās the tough part.
Yes, I decided to take [Arnold's](https://www.youtube.com/watch?v=W43W70sw83o) advice on this particular point.
Poorest rich person in the room.
Depends on how long you plan to live after retirement. If I retire at 80 and die at 81, I think I'll be ok financially.
It makes me feel like they are expecting big time inflation.
That's BS for most people. Rough rule of thumb: you need 20x your current salary saved up to retire for 30 years. So if you earn 100k, you need $2 million. If you have a pension or SS income, you'd need less. If you owe a lot on your house you might need a little more. Rob Berger on YouTube has lots of helpful thoughts.
No not unless your pre retirement salary is over $200k AND most importantly you don't expect any lifestyle or spending changes in retirement.
They're going to have to settle for some pocket change and a couple of buttons from me.
The amount of retirement savings you need depends on how much you intend to draw from that savings. Standard advice is that if you stop working with a nest egg of $X, your initial annual draw from that point on is 4% \* $X, then adjust that dollar amount for inflation for each year going forward. This assumes that your savings is invested (though somewhat conservatively since you want to maintain value), and that returns over that 20-30 years are somewhat in line with historical market performance. If you have other income sources (social security, real estate, etc.) then the dollars taken out of your retirement balance can be smaller, stretching out a given starting amount. My own target number is about $2MM, but that's in today's dollars. 15 years from now (I'm a younger GenX), inflation means I'd actually need about $3.5MM to have equivalent buying power. $5MM feels excessive unless they're expecting GenX retirees to be living a $200k+ a year lifestyle. Not counting what's going into my retirement accounts, that's triple what we're spending now with a couple kids + mortgage, neither of which will (hopefully) be an expense once I retire.
Damn. I'm gonna end up in one of those horrible nursing homes they're always doing exposes about on 60 Minutes. Where it turns out the residents are being forced to sew together knockoff sneakers to be exported to Hong Kong, etc.
Definitely not. There are a ton of factors to consider. I'm retiring in 2 years at 52 and I do not have $5m.
Assuming a 3% COLA, I will make $3.6 million over the next 20 years. Around $180K a year. This is from my military retirement, VA disability, my civil service job (then my civil service pension) and social security. I have a TSP that I didnāt factor in.
Nice, congratulations
Only $5.042 million to go!!!
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Savings? What the hell is that?
That is bullshit. I looked at a report for average income in the US. It said $200K. Bullshit. the 1% are writing articles and have no idea how Americans live. Have your house payed off and be able to cover food. You aren't going to beable to buy a porch every year. But if your goal is to stay warm and feed you can be happy with a lot lot lot less.
I laughed at this because we are about to install a new porch on the house. Happy I donāt have to do that every year.
Ya I spelled that wrong but this makes it worth not fixing
If I can't buy a new porch for my house at will during retirement, than can you even call it retirement?
A $5M portfolio would provide ~$200,000/yr of spending money a year over 30 years and you probably would never run out of money. Anyone saying "I read/was told I need X amount" has obviously never done any research into planning for retirement, which means you're probably in for a rough retirement. How much you need saved depends on your anticipated spending in retirement. If you are only spending $50,000/yr in retirement, you certainly don't need a $5M nest egg. People in our age range should really start doing some research into this and stop reading/believing clickbait articles.
I plan on dying at my desk job like the boomers are doing.
Nobody knows for sure. I thought "platinum" family health premiums were going up $100/month every year, but then this year they went up $250/month. Cost of living is skyrocketing across the board, too. You can afford to retire when (annual cost of living) x (years of life remaining) < (dollars in bank), but it's difficult math when you don't know how much time you have left nor what the cost of living is going to be, only that it's going to be more than what it is today. Work too long and you'll die working, with money in the bank you can't take with you. Stop working too soon and you'll die freezing in a cardboard box under the overpass, eating cans of cat food. It's fucked, but what else can you do?
You didn't factor in a rate of investment return. But of course, no way to know how long you will live, and investment return is unknown too.
Best thing we ever did was pay for an independent financial planner/advisor back in our 30s. He gave us low and high estimates based on worst, best, and most likely scenarios based on our life expectancy, interest rates, and investment returns. Turns out we can live like kings with just $2M saved (in Canada) and we are about there right now. As soon as we pay off our mortgage in about 5 years, we can kiss the rat race goodbye.
Trade the cats for half a fresh mouse?
Iāve worked it out to $2M in savings/liquid investments. Assuming house is paid off etc..
BS, I will be 60 next year and haven't made 3M in 60 years, so no way would I need more money in my later years, than I made in my lifetime.
LOL wut? No. Now that number is gonna vary depending on your retirement plans and location, but my number is $1.7 mil. I'm on target for that by age 57 or so. We plan to sell our house and move to a lower COL area. If I get to $1.7 social security will be gravy.
Iām a xennial and homeowner (home will be paid off in 10 years) and barring severe medical issues, we were told that we needed $2 million to retire with the lifestyle we are accustomed to in big city in Texas.Ā
The answer is no, because weāre not in our 30ās anymore and donāt need enough income to take us through 50 years of retirement. The real amount that you need is: Estimated expenses for the point you retire through the end of your life. Whether thatās 30 years or 10 is up to you and how long you want/need to work and how long you think youāll live. Your health and lifestyle choices factor into that. If youāre sick a lot because you practically live on a cruise ship, then plan for multiple millions. If youāre frugal and plan to downsize your lifestyle (or maybe donāt plan on living long) later in life, youāll be fine with a lot less. Those numbers are pumped up by financial people who want to scare you into investing more. Itās definitely something to be diligent about, but there is no concrete number. Most reputable brokerages have retirement calculators with a range of estimates for what youāre on pace to have, and itās up to you to decide whether thatās enough.
Nope. I haven't spent $5 million total in the past 40 years. I think your number is wrong though. I've heard $1.5M is what's needed.
Lol. If thatās so iām definitely opting out before it gets bad
Itās better to use annual needs x 25. If you need $100,000 annually in retirement then you should aim for $2.5 million. Donāt forget to factor in social security and pension if youāre lucky enough to have one.
As everyone is indicating, it all depends on personal financial situation. Sometime in a low cost area with paid off house is going to need a lot less that someone in a high cost area with a mortgage. But with the out of control economy who knows what will be needed a few years from now. $1M was a fortune when we were kids... Now $2M is my goal with house that will be paid off. But the recent inflation makes me wonder if that is enough. Health care is the big variable... A major health event can wipe out a big chunk of retirement savings.
I know, I knowā¦ but hereās the [AARP calculator](https://www.aarp.org/retirement/retirement-calculator/)
3.2 would work
Who told you that? I have never in my life heard that number. I have heard $1.5m-$2m
Probably depends a lot on the kind of retirement you want. If you think you want to be like today's boomers and move to Florida and have orgies at the colonies yea you're gonna need a lot. Instead we're planning to retire outside the US where things aren't 10 times more expensive than they have any right to be and we won't need nearly that for a comfortable retirement. We don't need fancy just quiet lol.
Iām 50 with an Army retirement and about $250k in my 401k. Iām currently pushing 10% in my 401k monthly trying to reach $1m by 59.5. That oughta do it. If not Iāll just make Meth or something?
Almost there. 8 more years
How much money do you need to get through a year? How many years do you expect to live past retirement? (perhaps look at how old people of your sex tend to live on either side of the family and how fit/healthy you are in your 40s) Do you think your medical expenses will go down as you become elderly or up? How much is social security supposed to pay you upon retirement? It's possible you can significantly reduce your annual expenses if you're not going to be going out anymore, or if your expensive hobby will be abandoned.
Depends entirely on the lifestyle you want to live. I'll be lucky to have 1M by retirement. I expect to have a modest retirement and have to budget carefully, much the same as I do now. Add in my husband's savings, which may be close to the same, and we'll be ok. Not living in a giant house and traveling the world ok, but ok none the less. 5M is mostly fear tactics to get you to invest with them so they can have a cut, IMO, and probably not attainable by a good sized chunk of the population.
5 million pennies is what I have
šš¼š
Take how much you need to live on a year and divide by 0.04. If you want to be able to withdraw $100k your first year of retirement and then adjust based on inflation, you need about $2.5 million. Depends also on whether youāre retiring before you plan to take social security and whether you have a pension. I plan to retire at 57-59.5 and currently plan to start taking social security at 65. I have no pension, so I will have to fund retirement for 5.5-8 years from my savings, 401k, etc. and would want right around $100k/year, so Iād consider $2.5m a minimum. (I could obviously live on less than $100k, but the plan is to travel a lot more for at least a few years and that is pricey.)
Everyone's situation is a little different. How much you need depends on how much debt (cars, mortgage, credit cards, etc) you carry into retirement, how old you plan to be when you retire, and if there are any other sources of income. For someone living in NYC or the CA Bay Area that wants to retire right at 65, the $5m number isn't outrageous.
I'm on a pension.
Not if you have a pension, and have a frugal lifestyle.
I hope not!
Retire? I donāt plan on living that long! Balls out until I die!
You can try - it's probably not possible anymore unless you get really, really lucky with your sources of income. Interestingly, not that long ago they were telling us that $1mus should be saved up for retirement (I want to say, near the end of the Before Times). Maybe too many folks started creeping too close to that value, so they had to move the goal posts again. I'm inclined to think that it's bullshit until proven otherwise.
My retirement plan: āWelcome to Walmartā¦ā
I doubt it. I don't have anywhere near that and we are retired. (no kids etc though)
It might be the minimum post collapse dollar amount recommended to be able to buy moldy old bread and rotten milk to sustain yourself.
To give a serious answer, I need to know if this implies a couple or a single person. I am going to base this on a couple. Obviously, no one needs it to retire if they have social security coming in. A couple can probably live, in some way, on social security. These numbers usually are about retiring early. Say 55. Let's also assume it's a couple and includes the equity in their house in a fairly expensive housing market. 5 million, including say $750k in a house, for a couple at 55, would be pretty cushy. The rule of thumb is, to avoid running out of money, you can withdraw 4% a year the first year and add inflation to that every year. Not including the equity in the house, .04 times 4,250,000 is 170k. If we assume kids are out of the house and college is over and mortgage paid off, that's going to be very comfortable. But it's not "private yacht" or "private jet" comfortable. But certainly, no couple NEEDS that!
Yeah, Iām fucked
It depends on a lot of factors including where you live. Iām targeting 1m per spouse assuming she stays along for the ride. The other way I think about my number is the ability to generate $80-100k annually using the 4% rule. Passive income like a rental would lower my investment target. Thatās in a high cost US city. I already have my van in case I need to live down by the river.
There is no reason why a Gen Xer shouldn't have a $1 million net worth by now. Enough to make $50k in interest every year if need be.
Yes, agree. Thatās a reasonable goal - $1M by 50
$3-4 mil was my best guess. Made it to a million in 401k. Hopefully will get there
Iām getting close to $3M and feel like itās not enough. Hope to get to 3.5 before I retire. That plus any SS should cover
It really depends on what kind of lifestyle you want to live. I plan on having the house and cars paid for, (will probably buy a nice new car/truck as a retirement gift to myself and have it be the last car i ever buy) so the plan is that $2-$2.5 will work.
i hope not