What is your retirement number...and what do you do when you reach it?

[AJ444]

5 mil in today's dollars is our number and my current projection shows us hitting it when I am 50. We will likely work 5 more years for my wife's pension and retirement healthcare benefits.

The plan is to live off of her pension, both of our SS, and the dividends/interest from the 5 mil. It will be invested the same as it is now, a total market strategy with 120 minus our age in bonds. Once we hit 50/50 bonds/stock I don't see lowering the stock portion any further.

Given my wife's pension and our expected Social Security I don't anticipate messing with annuities, we could live off just that. When we die we plan on giving half of the principal to family and half to charity.

[corn18]

How can anyone have multi-million dollar portfolios just by saving? According to TH, that's not possible. You have to be in real estate.

[Singuy]

How can anyone have multi-million dollar portfolios just by saving? According to TH, that's not possible. You have to be in real estate.

If you have a household income of 150k/year or less and want to hit multi million at a reasonable time frame, I think something drastic like what TH suggest is more feasible than just saving alone.

It doesn't have to be real estate, but any kind of business with risks would do.

[corn18]

How does anyone know what their number is if they do not know what their expenses are? Is it even possible?

The farther you are from retirement the more difficult it is to determine expenses, so I can see the source of your question.

I'm 50 and I have a good idea of what my retirement expenses will be. I'm targeting $75k / year plus whatever we want to spend on vacation / fun. So my number is $120k / year (we plan to have a lot of fun). That puts my number at $120k * 25 = $3M. But I have a $45k / year military pension that is COLA adjusted. So my number is $75k * 25 = $1.9M. I hit that at 58 if I don't save any extra above my plan. If I save at my current rate, I hit that at 54. Then I will be financially independent and everyone can bugger off. And for TH, yes, I have plenty of non-401k money to access between 54 and 59 1/2.

But I will never stop working. When I retire, I want to be active in pet rescue. That could mean I run the SPCA, that could mean I volunteer at the local shelter. I may consult a few days a month at the ridiculous rate that retired presidents charge me. I may not. I may keep doing what I am doing and spend it all. That would be a hellofa lifestyle, but not sustainable. What I won't be doing is managing any property or dealing with running a business. All truly passive income. If the market tanks, my number accounts for that.

That's my plan today. If the market drops 40% tomorrow, I'll have a different plan.

Tom

[corn18]

If you have a household income of 150k/year or less and want to hit multi million at a reasonable time frame, I think something drastic like what TH suggest is more feasible than just saving alone.

It doesn't have to be real estate, but any kind of business with risks would do.

Just making a point that you don't have to make $150k / year to retire with millions.

[TexasHusker]

How can anyone have multi-million dollar portfolios just by saving? According to TH, that's not possible. You have to be in real estate.

Never said that. Not quite sure why you would feel the need to post that, but continue as you were.

[phantom]

My husband and I are in our thirties, and our plans for the future shift from year to year. My husband thinks we'll need at least 2 million (in today's dollars) for a comfortable retirement. I think we could get away with a little less, but I'm content to call 2 million the goal. We're maxing our our retirement savings right now with the idea that the more progress we make towards saving for retirement now, the less we'll have to worry about that and the more flexibility we'll have in the future. At the moment, it seems likely that at least one of us will continue working till our kid(s) finish school, so that's at least 20 more years.

[Petunia 100]

I told my wife that we need to work for 10 more years on a sub 30-40k/year budget for expenses in order to retire with the number I want, which is 3.5 million in a taxable account.

We will be 44 by that time, which means we have a lot of years left before we die from old age.

At this time I will probably work part time and my wife will probably work 2 days/week and hire someone for the other 5 days/week.

Our income at retirement will hopefully look something like this.

250k/year worth of dividend generated from the nest egg
60k/year from my part time job (for health insurance)
200k/year from my wife's part time job


At this point we may just open up and spend 100k/year..doing some traveling but the kiddo who is in grade school will make it tough. The rest of the money not being used will be saved.

Are you piling up that money for something in particular?

[Nutria]

Never said that. Not quite sure why you would feel the need to post that, but continue as you were.

"401(k) & IRAs are Eeeeeevil; you must buy real estate!!" was a regular motif of yours in the spring/summer of last year.

[corn18]

Never said that. Not quite sure why you would feel the need to post that, but continue as you were.

"Every financial investment that we make is a calculated risk.

I look at investing "conservatively" (i.e. mutual funds, etc.) to actually be a very risky play. The risk being quite high that the mediocre returns will nowhere close to fund an enjoyable retirement.

I took a different approach - starting two businesses, getting them going good, and then slowly "retiring" from them. To me that is a very safe investment because the income is substantial and I am in much more control over the situation. CNBC, Bloomberg, and Brexit don't affect my income much.

So I believe mine to be the conservative play. Those out there counting on Fideiity 2040 fund have lots of hiney showing, I'm afraid."

"I'll be the dissenter and tell you to avoid all of the IRS endorsed vehicles - IRAs, 401Ks, etc, if you want to grow your wealth. These vehicles were invented for Everyman, and Everyman isn't getting rich and never will. Whatever the gubmit is incentivizing me to do, is often to my detriment and for the gubmit's benefit.

At their best, these vehicles provide paltry growth, in exchange for a heavy price - locking your money away until retirement, and an extremely limited option of "investments" (using that term generously). Wish I had figured this out at 30 instead of 40.

No thanks."

"At the core of it, if you are going to achieve significant wealth by your 40s or 50s, you cannot do so by saving all of your money. You can only do so by being an owner. That is, a business owner. Owning a business can take many forms.

In my situation I own three franchises, a property management company, and some rent houses. So effectively three businesses. Certainly, some savings was involved, but the two biggies were leverage (borrowing lots of $$), and significant financial risk.

Most people don't have the stomach for such, and that is perfectly OK. But people that really think you can achieve any sort of wealth through systematic savings and some mutual fund returns are delusional. Of course there are those rare exceptions.

By the way, I kissed my share of toads along the way."

"You have reason to be concerned. If you follow the road of the masses - IRAs, 401Ks, stocks, and bonds - you will have to save a TON and be one lucky fellow in order to achieve financial independence before you're an old man."

"Real estate all the way. Few get rich off of mutual funds or anything else to do with the stock market. But I bet there's plenty of real estate millionaires driving around your hometown."

[TexasHusker]

"Every financial investment that we make is a calculated risk.

I look at investing "conservatively" (i.e. mutual funds, etc.) to actually be a very risky play. The risk being quite high that the mediocre returns will nowhere close to fund an enjoyable retirement.

I took a different approach - starting two businesses, getting them going good, and then slowly "retiring" from them. To me that is a very safe investment because the income is substantial and I am in much more control over the situation. CNBC, Bloomberg, and Brexit don't affect my income much.

So I believe mine to be the conservative play. Those out there counting on Fideiity 2040 fund have lots of hiney showing, I'm afraid."

"I'll be the dissenter and tell you to avoid all of the IRS endorsed vehicles - IRAs, 401Ks, etc, if you want to grow your wealth. These vehicles were invented for Everyman, and Everyman isn't getting rich and never will. Whatever the gubmit is incentivizing me to do, is often to my detriment and for the gubmit's benefit.

At their best, these vehicles provide paltry growth, in exchange for a heavy price - locking your money away until retirement, and an extremely limited option of "investments" (using that term generously). Wish I had figured this out at 30 instead of 40.

No thanks."

"At the core of it, if you are going to achieve significant wealth by your 40s or 50s, you cannot do so by saving all of your money. You can only do so by being an owner. That is, a business owner. Owning a business can take many forms.

In my situation I own three franchises, a property management company, and some rent houses. So effectively three businesses. Certainly, some savings was involved, but the two biggies were leverage (borrowing lots of $$), and significant financial risk.

Most people don't have the stomach for such, and that is perfectly OK. But people that really think you can achieve any sort of wealth through systematic savings and some mutual fund returns are delusional. Of course there are those rare exceptions.

By the way, I kissed my share of toads along the way."

"You have reason to be concerned. If you follow the road of the masses - IRAs, 401Ks, stocks, and bonds - you will have to save a TON and be one lucky fellow in order to achieve financial independence before you're an old man."

"Real estate all the way. Few get rich off of mutual funds or anything else to do with the stock market. But I bet there's plenty of real estate millionaires driving around your hometown."

Thanks. I stand by my opinion. To get to millionaire status through retirement vehicles, you have to save early, often, and a lot, and get good returns. And mathematics won't generally work until you reach your 60s. I also stated that there are rare exceptions to this.

I'm not a fan, but if it works for you, by all means do it.

I'll make you a deal: I will refrain from embellishing your opinion with hyperbole, if you will respond in kind.

[TexasHusker]

"401(k) & IRAs are Eeeeeevil; you must buy real estate!!" was a regular motif of yours in the spring/summer of last year.

I never said they were evil. Just that I felt them to have downsides that people fail to consider, as well as substandard returns for achieving wealth.

Interesting how things get distorted.

[Singuy]

Are you piling up that money for something in particular?

I don't ever see ourselves spending 500k+/year...my wife fully quitting may not be an option since she technically still works for a corporation even though the business is ours to manage..so if she quits, we are giving up 400k/year of total income, or 200k of free income...might just have to suck it up and work 2 days/week until maybe the daughter takes over or something....or until the business no longer exist due to structural changes.

Basically just let the money accumulate, build a legacy and put it in a trust fund.

[Nutria]

I never said they were evil. ...

Interesting how things get distorted.

"Whatever the gubmit is incentivizing me to do, is often to my detriment and for the gubmit's benefit."

That's... evil. So don't be shocked when we read that and think that you mean that the IRA and 401(k) are evil.

[sv2007]

By that question, I mean, is there a specific dollar amount that, once you reach it, you can retire?

Let's say your number is $1 million. Once you reach that number, how do you live off of the $1 million? Do you want to just live off of the earnings and not touch the principal? Are you OK drawing down the principal to supplement?

What investments are you considering that you can put your lifetime nest egg into that will keep it safe, and pay you some sort of living? Are you planning on putting it all in an annuity so that you have a guaranteed amount with no risk (assuming the annuity ins. co. never goes under).

I hear a lot about saving and investing for retirement, but I am curious as to what number folks are planning to try to reach, and specifically how that money is utilized once they get there.

We' never had any specific numebrs. Initially we kind of wanted to save $1m for no specific purpose besides it being a nice, round number, and it looked so hard to do. Then, we kind of lost track of it, and next thing we know we had much more than $1m assets.

The smart person would use some principal; leaving any money behind after you die is like leaving money on the poker table. Sure, it isn't practical to use up everything, but leaving too much behind when you already don't have enough, effectively means you're living a cramped lfe style or need to save more than necessary. I.e. non-optimal.

Risk=reward. Annuity, sure, but their returns suck. We currently moved the majority of our assets into the equity market. We have a diversified enough portfolio (even covers RE and commodities thanks to REITs and ETFs) that we feel comfortable with the risks.