$2 million

LMCane said:

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CC09LawAg said:

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This is one of the first things I read when starting to contemplate this concept:

The 4% Rule: The Easy Answer to "How Much Do I Need for Retirement?" (mrmoneymustache.com)

I am sure it is not the end all be all, but found it to be helpful framework and reference when studying more and reading discussions.

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again- the 4% rule is designed to ensure that the principal balance never goes down.

that if you have one million dollars you should be living off of $40,000 a year and believing the rate of growth of your account will be 4%

so that you are always at one million dollars.

but what if you don't want to die with a million dollars?

am I missing something here?

what if I want to pass with 10 dollars in my accounts?

doesn't that then allow one to then take out 5% or 6% a year from a million dollar account?

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Quote:

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I am sure it is not the end all be all, but found it to be helpful framework and reference when studying more and reading discussions.

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You would have know the exact date you are going to kick the bucket for that calc to be worth anything. What I am currently doing is assuming an estimate on life expectancy and have a rate of return plus withdrawal amount that would make my money run out 10 years later.

My number is roughly 5 million and it will go to zero at 95 years old with my estimated withdrawal and rate of return. Maybe that's not conservative enough but I am using a low rate of return estimate once in retirement. Also that number is what I want in the 401k. Hoping to have other after dividend and real estate income streams to supplement that number if needed.

what's the best strategy to reach halfway to 8 figures in a 401K..?

DannyDuberstein said:

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Yeah, my parents were extremely active into their early 70s. And by active I mean climbing CO mountains and doing bike races across the country. But then it screeched to a halt around 72. Mom diagnosed with ovarian cancer and dead at 75. Dad is 81 but his mobility has been extremely limited for 7-8 years due to multiple strokes. He's basically been a shut-in for years now. The man started his 70s biking across Iowa and ended them with a walker and unable to drive a car to the store. And this story seems very common as far as the 70s slowdown.

That said, the lifestyle gets extremely cheap. By 73-74, their Soc Sec check was enough income to cover living. Their annual property taxes and income tax payments on RMDs and SS disbursements were the only thing investments had to cover.

I'm 49, my target is 55, and I'm tracking comfortably toward it.

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I'm glad your parents were so active. My mother in law at 68 was running around Vegas drinking and getting high. Four days later, a stroke took 90% of one side of the brain, and she led a slow painful death in the hospital for the next month. Living proof of live every day like it's your last and tell the ones you care that you love them.

Sorry 5 MM is goal for total 401 and IRAs. But max out for another 20 plus years with good company match and 401k bonus.

Plus hope for good returns. Fear is getting let go or having to shift careers In my 50s.

aduey06 said:

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You would have know the exact date you are going to kick the bucket for that calc to be worth anything. What I am currently doing is assuming an estimate on life expectancy and have a rate of return plus withdrawal amount that would make my money run out 10 years later.

My number is roughly 5 million and it will go to zero at 95 years old with my estimated withdrawal and rate of return. Maybe that's not conservative enough but I am using a low rate of return estimate once in retirement. Also that number is what I want in the 401k. Hoping to have other after dividend and real estate income streams to supplement that number if needed.

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That's a reasonable enough way of looking at things, and I could do the same with the numbers I have and intend to have, my life expectancy, etc. Which calculator/tool did you use for this? My question is almost the reverse - I know what I have, and I have a rough idea of what I would have if I pushed retirement X years down the road. What I want to know is what it would likely spin off if I were also eating into principal as I lived off of its returns.

There are a few calculators online I used online just to check basic numbers. I made my own calculator just so I could vary the rate of return earlier assuming I would go more conservative as a images and moved further into retirement.

Looking online it looks like bankrate has a calculator that will do what you are looking for.

CuriousAg said:

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How did you come up with your number? I don't know what to shoot for and have time to plan.

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How Many Millionaires are there

Only 8.8% of Americans are millionaires

I will state that if you can't live as one of the wealthiest 8% of humans on the entire planet of 8 billion people- then you have serious issues.

Comparing yourself to others is a fallacy in both directions

aduey06 said:

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You would have know the exact date you are going to kick the bucket for that calc to be worth anything. What I am currently doing is assuming an estimate on life expectancy and have a rate of return plus withdrawal amount that would make my money run out 10 years later.

My number is roughly 5 million and it will go to zero at 95 years old with my estimated withdrawal and rate of return. Maybe that's not conservative enough but I am using a low rate of return estimate once in retirement. Also that number is what I want in the 401k. Hoping to have other after dividend and real estate income streams to supplement that number if needed.

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What do you consider a low rate of return for your retirement years? I use 4.5%.

Late to this conversation, but I'm curious how many of you have a $ that's tied to a pension?

I'm almost 45, single, one kiddo about to start college (my dad is taking care of the balance that isn't covered by scholarships).

Retirement and cash savings is finally starting to look good again (took a hit like everyone else and had very little growth other than my contributions for about a year). Only debt is my house and goal is to have that paid off by age 50. Monthly mortgage payment is very reasonable, and I'm doing my best to keep my taxes in check (to the extent that's possible).

Problem is, a big chunk of my retirement savings (roughly 1/3) is in a pension. That would be what I tapped into if I retire early, but I've got to stick it out until age 55. And there is a HUGE financial incentive to stay even a few years past that (58-59-ish).

I know I'm VERY fortunate to have a pension, but at this point in my career, it feels a little bit like a ball and chain.

First world problems, I know. Just wondering if anyone else feels this way. It's not mid-career burn-out; I still enjoy my job. Just feels a bit more like work at this point in my career than it ever did before. I'm trying to console myself with the fact that I should get 40 more hours of vacation on Jan 1, and I'm in a situation where I can take it with no problem. So that's up to 6 weeks total I can spend doing the things I really enjoy.

I'll get a very small pension when I retire because the company I used to work for froze it last year. When it was active I referred to it as golden handcuffs because I felt tied to the company and wanted to keep working there to build up the multiplier. I had opportunities to go elsewhere and make more money but stuck around bc I wanted to keep getting more years of service. Once they froze it I was gone. I can take it as early as 55 but I'll get the maximum amount if I wait till 65 to start collecting it.

I decided to leave my pension job for a new job and new challenge a few months ago. It's been good for me, but I do wonder if I should have stayed in the pension job. I still have that pension but it's stopped growing since I left. In my case, I would have had to stick it out for another 13 years until I could move immediately from work into drawing the pension. Now I'll have to wait 16 years until it kicks in. But anytime you're referring to "sticking it out", it's good to revisit your employment situation.

I haven't ruled out going back to a pension job and restarting the clock at some point.

In my sheet I am assuming 7% return from right now until 60. 5% from 60 to 65, 4% from 65 to 70 and 3% from 70 to 95.

annual expenses x30 liquid. we live pretty comfortably on 80k/year expenses so we're calling it $3M to pad it. we'll both be "retired" by 40 most likely, and will probably take lower paying part time jobs to fill the time and buoy us.

I'm in a similar boat as far as golden handcuffs. 49 years old, and while my savings are in good shape for retirement, I also have a pension where walking away right now would literally be a decision to surrender a million bucks. Need to make it to 55. The hit decreases the closer I get to 55, but there is a kicker at 55 that essentially doubles the value (then it freezes). Not to mention I've also got a series of RSUs in various stages of 3 year vesting.

Nice problems to have, but absolutely feel anchored to this place and have for several years

Good gosh. I'd be worried they would can me at 54.

What about inflation?

South Platte said:

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Good gosh. I'd be worried they would can me at 54.

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Once you hit 49, if they can you, they bridge your pension to 55 in order to avoid being sued. They also vest your RSUs. Getting canned is actually a way to get free sooner and keep the $$$. So hitting 49 a few months ago was kind of a big deal.

Sounds like pretty good deal

the 4% rule accounts for inflation...this is the same thing, just more conservative at 3.33%....

now whether or not rising insurance costs or individual health plans are accounted for properly is another matter. That's probably the biggest variable and price increase for folks that want to retire early.

aduey06 said:

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There are a few calculators online I used online just to check basic numbers. I made my own calculator just so I could vary the rate of return earlier assuming I would go more conservative as a images and moved further into retirement.

Looking online it looks like bankrate has a calculator that will do what you are looking for.

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Thank you. This seemed the most appropriate calculator on the website you mentioned:

Bankrate Retirement Plan Income Calculator

It definitely gave me a "quick and dirty" figure based on inputs of current funds, expected additional annual contributions, age at retirement, and expected lifespan.
Assumptions built in were 7% growth pre-retirement, 4% after retirement, and an inflation rate of 2.9%.
I believe it also assumes the principal is left intact.
Unfortunately, it made you decide in an "all or none" fashion whether the retirement savings were pre-tax or post-tax, and I would imagine most everyone would have some combination of both. I guess you could run the simulation twice - once pre-tax and once post-tax then calculate what return you would expect based on your current and future percent of assets held in a taxable vs pre-tax account. I figured that out on my own, as I are a graduate of Texas A&M University! Math.
Altogether a nice calculator, thanks for the response.
If anyone knows of any more detailed calculators, that would also be appreciated.

topher06 said:

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What about inflation?

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not worried about it, since the vast majority of the nest egg will still be in the market (hopefully) outpacing inflation. as BDJ accurately notes, the 4% rule accounts for inflation. our investment horizon is much longer than that rule is meant for, so we'll be supplementing income and tightening it down to closer to 3%.

I guess mine isn't a pension per se, but I am a state employee with teacher retirement, so I definitely feel stuck. Now there is a change later this year I could turn it into ORP, but I don't think I will. Pretty much my retirement is a guaranteed thing. I am pretty sure I won't hit full retirement though (58.5). My guess is I'll go 53-54.

Not sure if it is true, but I heard I could quit working, but push out retirement - so if this is true and I could live without the income for a few years - that would really help. Each year I go early I take a 5% hit.

The main thing would be to have enough income/savings to get me from 53-54 to when we can start drawing on IRA's, etc. Hoping rental incomes can help with that and if I am still owning my business separate from teacher retirement.

JMac03 said:

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I guess mine isn't a pension per se, but I am a state employee with teacher retirement, so I definitely feel stuck. Now there is a change later this year I could turn it into ORP, but I don't think I will. Pretty much my retirement is a guaranteed thing. I am pretty sure I won't hit full retirement though (58.5). My guess is I'll go 53-54.

Not sure if it is true, but I heard I could quit working, but push out retirement - so if this is true and I could live without the income for a few years - that would really help. Each year I go early I take a 5% hit.

The main thing would be to have enough income/savings to get me from 53-54 to when we can start drawing on IRA's, etc. Hoping rental incomes can help with that and if I am still owning my business separate from teacher retirement.

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Isn't it a simple years of service + age formula?

My mom retired from teaching, worked for my dad doing payroll, books, etc., and delayed taking her teacher retirement for this very reason.

htxag09 said:

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JMac03 said:

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I guess mine isn't a pension per se, but I am a state employee with teacher retirement, so I definitely feel stuck. Now there is a change later this year I could turn it into ORP, but I don't think I will. Pretty much my retirement is a guaranteed thing. I am pretty sure I won't hit full retirement though (58.5). My guess is I'll go 53-54.

Not sure if it is true, but I heard I could quit working, but push out retirement - so if this is true and I could live without the income for a few years - that would really help. Each year I go early I take a 5% hit.

The main thing would be to have enough income/savings to get me from 53-54 to when we can start drawing on IRA's, etc. Hoping rental incomes can help with that and if I am still owning my business separate from teacher retirement.

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Isn't it a simple years of service + age formula?

My mom retired from teaching, worked for my dad doing payroll, books, etc., and delayed taking her teacher retirement for this very reason.

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Yes. But I didn't know I could quit and basically retire later. Now this might have health insurance implications so I would have to look into that. But if I have enough to survive on for a few years I could push out retirement a few years for 5% each year that I wouldn't lose if I flat out retired early.