When can I retire?

[Wisedog]

I know it's many years away but is there a calculation I can use to find out how much money I need to retire at a given age?

I'm 35 years old, my wife and I have about $200,000 in retirement accounts, another $30,000 in taxable avcounts/savings. We make a little over $100,000 per year and currently live off $50,000 but could live off about $30-35,000

Can anyone help offer some directions for future planning please?

[feh]

I know it's many years away but is there a calculation I can use to find out how much money I need to retire at a given age?

I'm 35 years old, my wife and I have about $200,000 in retirement accounts, another $30,000 in taxable avcounts/savings. We make a little over $100,000 per year and currently live off $50,000 but could live off about $30-35,000

Can anyone help offer some directions for future planning please?

firecalc.com

[rennigade]

Theres a lot of different retirement calculators which are nice...but to really know how much you'll need you'll probably need to track your expenses for a couple years to get a feel for how much you'll actually need. Also, some expenses go up in retirement...some go down.

[techgirlable]

I know it's many years away but is there a calculation I can use to find out how much money I need to retire at a given age?

I'm 35 years old, my wife and I have about $200,000 in retirement accounts, another $30,000 in taxable avcounts/savings. We make a little over $100,000 per year and currently live off $50,000 but could live off about $30-35,000

Can anyone help offer some directions for future planning please?

This post made me really nervous! Im only a few years behind you and dont have anywhere near that socked away! You guys are doing great, Congrats!

I love this forum. Its such a great kick in the butt to remind me to stay on track with savings!

[Petunia 100]

If you want to use a withdrawal rate of 4%, you need a nest egg of 750k to draw 30k per year. If you want to use a safer withdrawal rate, you need more money.

What age do you want to retire? As soon as you possibly can? Remember that once you and your wife begin drawing SS benefits, the demands on your nest egg decrease.

If you're investing sensibly (reasonable asset allocation plan, watching your costs), your 230k nest egg could turn into 460k in about 10 years. If you're saving even 30k per year, that's 760k total (ignoring growth on new money). If you're saving more than 30k, you have a pretty comfortable margin of error to be set in 10 years.

[jIM_Ohio]

I know it's many years away but is there a calculation I can use to find out how much money I need to retire at a given age?

I'm 35 years old, my wife and I have about $200,000 in retirement accounts, another $30,000 in taxable avcounts/savings. We make a little over $100,000 per year and currently live off $50,000 but could live off about $30-35,000

Can anyone help offer some directions for future planning please?

Take control of two things, and figure out where they converge.

First, $35k spending per year is $875,000 in retirement accounts.
As time gets closer you analyze the sources of income (SS, taxable accounts, Roth accounts, tax deferred accounts). For now, the goal is $875,000 cash. If you won the lottery or received a severance, this is what it would take.

Second, you have $230k now, in 8 years this can double ($460k) and in 8 years this can double ($920k) so if you invest to get a 9% return, (80% stocks) what you have done thus far is good enough.

At age 51, revisit this idea, you may have enough to retire. MIGHT.
Two things could influence this, one is your spending- $35k now might inflate to $70k in 16 years based on costs of goods going up.
The second is your savings rate. Can you take that $100k income and save $35k per year? That is a 35% savings rate and this means a few things
1) Each year you work, you are saving one year of expenses. In this case, you could retire in less than 12 years with about 100% certainty.
2) You could lower the 80% equities to 60% equities and take on less investment risk.
3) You will be spending less than you earn to a high degree, this is the single biggest factor to your success
4) If you can save 20% of your gross pay, that is excellent, if you can save 35% of your gross pay you are better than excellent.

[snafu]

I agree the site calculators lack precision and two significant factors are left out...health factors and changes the government will make over the years to dig their hands deeper into your pocket. I feel certain that retirement age will move and people will continue their careers longer. Lifestyle choices will be the predominant factor for determining 'how much is enough.'

[Zedon]

Do you want to live off of 30k or 50k? Is that pretax or after tax?

[Wisedog]

This post made me really nervous! Im only a few years behind you and dont have anywhere near that socked away! You guys are doing great, Congrats!

I love this forum. Its such a great kick in the butt to remind me to stay on track with savings!

It's not a race you need to win, it's a race you need to finish. That's what is most important.

Start a new post explaining your situation and send me the link or email. I can offer you advice if you're interested.

[Wisedog]

Take control of two things, and figure out where they converge.

First, $35k spending per year is $875,000 in retirement accounts.
As time gets closer you analyze the sources of income (SS, taxable accounts, Roth accounts, tax deferred accounts). For now, the goal is $875,000 cash. If you won the lottery or received a severance, this is what it would take.

Second, you have $230k now, in 8 years this can double ($460k) and in 8 years this can double ($920k) so if you invest to get a 9% return, (80% stocks) what you have done thus far is good enough.

At age 51, revisit this idea, you may have enough to retire. MIGHT.
Two things could influence this, one is your spending- $35k now might inflate to $70k in 16 years based on costs of goods going up.
The second is your savings rate. Can you take that $100k income and save $35k per year? That is a 35% savings rate and this means a few things
1) Each year you work, you are saving one year of expenses. In this case, you could retire in less than 12 years with about 100% certainty.
2) You could lower the 80% equities to 60% equities and take on less investment risk.
3) You will be spending less than you earn to a high degree, this is the single biggest factor to your success
4) If you can save 20% of your gross pay, that is excellent, if you can save 35% of your gross pay you are better than excellent.

A great breakdown. Thanks.

[alarson566]

All I would add to this is try not to bank on the 9% return. Do your math envisioning something more like a 5% stock return and then if it's over that you'll be even better off.

[Spiffster]

I know it's many years away but is there a calculation I can use to find out how much money I need to retire at a given age?

I'm 35 years old, my wife and I have about $200,000 in retirement accounts, another $30,000 in taxable avcounts/savings. We make a little over $100,000 per year and currently live off $50,000 but could live off about $30-35,000

Can anyone help offer some directions for future planning please?

Wow, these are almost our exact numbers, age and everything... 180k in various retirement accounts, so we are a little behind you there. I think we are doing great. We are aiming for retirement by 55 (20 years from now) and actually retire (or go part-time) by 60.

By my calculations we would only need 750k in the bank to retire comfortably, assuming that amount will generate 8-10% in fixed income. I dont want to retire comfortably though, I want to retire rich.

[techgirlable]

It's not a race you need to win, it's a race you need to finish. That's what is most important.

Start a new post explaining your situation and send me the link or email. I can offer you advice if you're interested.

Oh cool thank you! Ill have to wait until this evening to do that, but I will! Thanks for the offer!

[Wisedog]

Oh cool thank you! Ill have to wait until this evening to do that, but I will! Thanks for the offer!

Maybe you haven't yet made a post because you don't want to share all your personal information with the Web just yet. I do think its a benefit to make a post because you can learn from many different people. But I understand this can be a bit scary the first time. Why don't you email me and we can iron a few things out and then we can get things ready for you to make a post.
j.doggard at uymail DOT com
I welcome anyone with serious questions and a desire to learn to use this email addrss. I have done this for quite awhile and share my knowledge with anyone who will listen.

Sorry for the strange email address, I cannot post the email until I'm here a week so in a few days I will correct it. But you can use that address above anytime.

[BadSaver]

Rule of 25

35,000 x 25 = 875,000

As a starting point.
50,000 x 25 = 1,250,000

The rule of 25 assumes a 4% withdrawl rate which may or may not be acheivable. Because we don't know what future returns will be.

For monthly income multiply by 300 = 25 x 12 months