Say you wanted to retire and you owned your primary residence outright, how much savings would you want to have to live off without worrying that it would run out?
Retiring early - how much $ would be enough?
- Thread starter TrevorS
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In the UK the average wage is £27,000 pa. That would be circa $43,000 in the US.
In the UK the state retirement age is 65 at the moment and the state pays a single person a state pension of £6,000 to £10,000 sometimes higher depending on their work record and earnings.
So say £8,000 state pension that means they have to find a further £19,000 a year to notice no reduction in retirement earnings year. That would need a lump sum of £400k to get a non inflated pension or £600,000 to get the £19,000 inflated every year.
So at least a dollar $800,000 lump sum to fund a retirement!!!!!!!!!!!!!!!!!!!!
For your info th,e usual retirement lump sum that people have to buy their self funded or partial employer funded pension is circa $65,000. Most people on a pension in the UK are not rich as you can guess. They only have an extra income of say $4k a year.
I would be interested in what the figures are in the US.
eddie
In the UK the state retirement age is 65 at the moment and the state pays a single person a state pension of £6,000 to £10,000 sometimes higher depending on their work record and earnings.
So say £8,000 state pension that means they have to find a further £19,000 a year to notice no reduction in retirement earnings year. That would need a lump sum of £400k to get a non inflated pension or £600,000 to get the £19,000 inflated every year.
So at least a dollar $800,000 lump sum to fund a retirement!!!!!!!!!!!!!!!!!!!!
For your info th,e usual retirement lump sum that people have to buy their self funded or partial employer funded pension is circa $65,000. Most people on a pension in the UK are not rich as you can guess. They only have an extra income of say $4k a year.
I would be interested in what the figures are in the US.
eddie
I believe they say it should be your current standard of living (annual salary) for a certain number of years. Depends on a lot of variable factors.
Check out the Mr Money Mustache blog, he has calculators and tips on how to retire early. 30 in his case!
Originally Posted By: TrevorS
Say you wanted to retire and you owned your primary residence outright, how much savings would you want to have to live off without worrying that it would run out?
At what age?
Guess what... This is me.....
At 52.....
- Owe no one a Penny.
- Live within your means.
- Don't go into Debt.
- Pay Cash for everything.
- Don't waste money on Cable & other unnecessary junk.
Have a Wife that can cover you on Health Ins. (I hope).
Own Dividend Stocks to supplement your income so you don't have to dip into savings as much!
Have enough in your non-retirement acct. to take you to official retirement age.
If your expenses are $500-$700 a month, you should have at least 100,000x to 120,000x that much.
Does that help?
What age do you want to retire?
Say you wanted to retire and you owned your primary residence outright, how much savings would you want to have to live off without worrying that it would run out?
At what age?
Guess what... This is me.....
At 52.....
- Owe no one a Penny.
- Live within your means.
- Don't go into Debt.
- Pay Cash for everything.
- Don't waste money on Cable & other unnecessary junk.
Have a Wife that can cover you on Health Ins. (I hope).
Own Dividend Stocks to supplement your income so you don't have to dip into savings as much!
Have enough in your non-retirement acct. to take you to official retirement age.
If your expenses are $500-$700 a month, you should have at least 100,000x to 120,000x that much.
Does that help?
What age do you want to retire?
Got to consider that once you are on retirement savings, you aren't paying income tax (well, as much income tax), and you aren't saving for retirement (you are there)...so you don't need to replace your income, but your living expenses...
Have seen too many people work for too long, putting off the cessation of working (for security), and ending up such that there is no happy spousal retirement, but a single person with (nearly) double the money that they would ever need.
Have seen too many people work for too long, putting off the cessation of working (for security), and ending up such that there is no happy spousal retirement, but a single person with (nearly) double the money that they would ever need.
Originally Posted By: Turk
Originally Posted By: TrevorS
Say you wanted to retire and you owned your primary residence outright, how much savings would you want to have to live off without worrying that it would run out?
At what age?
Guess what... This is me.....
At 52.....
- Owe no one a Penny.
- Live within your means.
- Don't go into Debt.
- Pay Cash for everything.
- Don't waste money on Cable & other unnecessary junk.
Have a Wife that can cover you on Health Ins. (I hope).
Own Dividend Stocks to supplement your income so you don't have to dip into savings as much!
Have enough in your non-retirement acct. to take you to official retirement age.
If your expenses are $500-$700 a month, you should have at least 1,000x to 1,200x that much.
Does that help?
What age do you want to retire?
Corrected - sorry I just woke up.
Originally Posted By: TrevorS
Say you wanted to retire and you owned your primary residence outright, how much savings would you want to have to live off without worrying that it would run out?
At what age?
Guess what... This is me.....
At 52.....
- Owe no one a Penny.
- Live within your means.
- Don't go into Debt.
- Pay Cash for everything.
- Don't waste money on Cable & other unnecessary junk.
Have a Wife that can cover you on Health Ins. (I hope).
Own Dividend Stocks to supplement your income so you don't have to dip into savings as much!
Have enough in your non-retirement acct. to take you to official retirement age.
If your expenses are $500-$700 a month, you should have at least 1,000x to 1,200x that much.
Does that help?
What age do you want to retire?
Corrected - sorry I just woke up.
To retire at 65 you need apprx $900-1,000k in the bank/investments to have 90%+ chance of not running out of money. The key to saving for the future is to always live below your means when you do have an income, do not run balances on credit cards, buy a home you can afford and pay it off in 10-15 max or less, buy cars for cash that you can afford.
Having savings in the bank is not rocket science...everyone over age 8 knows exactly what to do to save and build some financial security, but very few have adequate will power and discipline to pull it off.
Having no money saved in the bank when you have an income is never an income problem, it is always spending problem.
Having savings in the bank is not rocket science...everyone over age 8 knows exactly what to do to save and build some financial security, but very few have adequate will power and discipline to pull it off.
Having no money saved in the bank when you have an income is never an income problem, it is always spending problem.
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It depends upon your age and retirement plans.
At the very minimum, I suggest $1,000,000 in savings/investment that can supply you with a return of about 10%. More is always better.
Personally, I've never understood the allure of "retirement". It's too much fun being productive and making money.
At the very minimum, I suggest $1,000,000 in savings/investment that can supply you with a return of about 10%. More is always better.
Personally, I've never understood the allure of "retirement". It's too much fun being productive and making money.
Originally Posted By: Pop_Rivit
Personally, I've never understood the allure of "retirement". It's too much fun being productive and making money.
For folks with no hobbies I agree. If work interests you enough to fill the time by all means.
In my 30's(pre kids) I only worked 20hrs/week as telecommuter and still managed 6 figures was able to ski, mountain bike and travel like mad.
Now I work 50-60 hrs thankfully hourly and look forward to mundane tasks like yard work, chopping wood etc.
Personally, I've never understood the allure of "retirement". It's too much fun being productive and making money.
For folks with no hobbies I agree. If work interests you enough to fill the time by all means.
In my 30's(pre kids) I only worked 20hrs/week as telecommuter and still managed 6 figures was able to ski, mountain bike and travel like mad.
Now I work 50-60 hrs thankfully hourly and look forward to mundane tasks like yard work, chopping wood etc.
~ 75% of your present salery per year, if you want to travel some and enjoy life instead of a rocking chair.
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JHZR2
Staff member
Originally Posted By: Pop_Rivit
At the very minimum, I suggest $1,000,000 in savings/investment that can supply you with a return of about 10%. More is always better.
Not sure that's reasonable, primarily because 10% return isn't ensured year by year. Sure over the long run it may average out that way, but over the long run there are also no dividend payers that will remain that high (there are currently), and a year with a big drop will equate to highly irregular distributions or excessive removal of principal.
IMO it needs to be sufficiently high that in a major down year, if principal must be removed, its a very small amount. I think one ought to be 2-5x that amount to ensure a 100k-ish pull out without a big issue of principal.
The alternate risk is insufficient return in later years. With people living longer and by extension staying active longer, this becomes a bigger and bigger concern given market irregularities and dips and rises.
At the very minimum, I suggest $1,000,000 in savings/investment that can supply you with a return of about 10%. More is always better.
Not sure that's reasonable, primarily because 10% return isn't ensured year by year. Sure over the long run it may average out that way, but over the long run there are also no dividend payers that will remain that high (there are currently), and a year with a big drop will equate to highly irregular distributions or excessive removal of principal.
IMO it needs to be sufficiently high that in a major down year, if principal must be removed, its a very small amount. I think one ought to be 2-5x that amount to ensure a 100k-ish pull out without a big issue of principal.
The alternate risk is insufficient return in later years. With people living longer and by extension staying active longer, this becomes a bigger and bigger concern given market irregularities and dips and rises.
I would want enough in investment income to live off of.
Originally Posted By: cashmoney
To retire at 65 you need apprx $900-1,000k in the bank/investments to have 90%+ chance of not running out of money. The key to saving for the future is to always live below your means when you do have an income, do not run balances on credit cards, buy a home you can afford and pay it off in 10-15 max or less, buy cars for cash that you can afford.
I'm all for living within one's means, but I would not be paying off a home that quick. It may make sense for some people but given interest rates today, I'd be looking to hold onto the extra cash I have from not paying off a home and invest it elsewhere.
To retire at 65 you need apprx $900-1,000k in the bank/investments to have 90%+ chance of not running out of money. The key to saving for the future is to always live below your means when you do have an income, do not run balances on credit cards, buy a home you can afford and pay it off in 10-15 max or less, buy cars for cash that you can afford.
I'm all for living within one's means, but I would not be paying off a home that quick. It may make sense for some people but given interest rates today, I'd be looking to hold onto the extra cash I have from not paying off a home and invest it elsewhere.
Originally Posted By: 99Saturn
Originally Posted By: cashmoney
To retire at 65 you need apprx $900-1,000k in the bank/investments to have 90%+ chance of not running out of money. The key to saving for the future is to always live below your means when you do have an income, do not run balances on credit cards, buy a home you can afford and pay it off in 10-15 max or less, buy cars for cash that you can afford.
I'm all for living within one's means, but I would not be paying off a home that quick. It may make sense for some people but given interest rates today, I'd be looking to hold onto the extra cash I have from not paying off a home and invest it elsewhere.
It makes sense if you have enough left over to still retire early...
Originally Posted By: cashmoney
To retire at 65 you need apprx $900-1,000k in the bank/investments to have 90%+ chance of not running out of money. The key to saving for the future is to always live below your means when you do have an income, do not run balances on credit cards, buy a home you can afford and pay it off in 10-15 max or less, buy cars for cash that you can afford.
I'm all for living within one's means, but I would not be paying off a home that quick. It may make sense for some people but given interest rates today, I'd be looking to hold onto the extra cash I have from not paying off a home and invest it elsewhere.
It makes sense if you have enough left over to still retire early...
JMO - but even retiring early, I'd still be inclined to carry the debt and invest the cash that would go to paying off a home. I can see the logic versus risk aversion, I guess I'm just having trouble with the interest rate + tax benefit versus return available out there. Maybe I'm way off.
Originally Posted By: 99Saturn
JMO - but even retiring early, I'd still be inclined to carry the debt and invest the cash that would go to paying off a home. I can see the logic versus risk aversion, I guess I'm just having trouble with the interest rate + tax benefit versus return available out there. Maybe I'm way off.
Paying interest is just like putting down your car window and throwing your money out the window.
Example: Would you rather pay $210,000 for a house or 265,000 for the same house?
I'll pay the $210,000. Any day.
You think I am able to retire early at 52 by paying massive $$$$$ in interest???
This is why sooooooooo many Americans are in Debt & live paycheck to paycheck!!
JMO - but even retiring early, I'd still be inclined to carry the debt and invest the cash that would go to paying off a home. I can see the logic versus risk aversion, I guess I'm just having trouble with the interest rate + tax benefit versus return available out there. Maybe I'm way off.
Paying interest is just like putting down your car window and throwing your money out the window.
Example: Would you rather pay $210,000 for a house or 265,000 for the same house?
I'll pay the $210,000. Any day.
You think I am able to retire early at 52 by paying massive $$$$$ in interest???
This is why sooooooooo many Americans are in Debt & live paycheck to paycheck!!
Instead of saving I'm building up rentals, I want 100. Right now I have two sites that add up to 24 that I will be building out over the next 12-18 months.
At an average rent of say $1,600 a month, that's $160k a month. Figure 1/3 to expenses and vacancy's 1/3 to me and 1/3 to my business partner, so around $53k a month.
Over the next 10-12 years I plan on building them out, paying them off then "retiring" as a manager.
I don't trust the stock markets I like assets you can see and touch, I'm very simple with my money.
At an average rent of say $1,600 a month, that's $160k a month. Figure 1/3 to expenses and vacancy's 1/3 to me and 1/3 to my business partner, so around $53k a month.
Over the next 10-12 years I plan on building them out, paying them off then "retiring" as a manager.
I don't trust the stock markets I like assets you can see and touch, I'm very simple with my money.
Originally Posted By: Turk
Originally Posted By: 99Saturn
JMO - but even retiring early, I'd still be inclined to carry the debt and invest the cash that would go to paying off a home. I can see the logic versus risk aversion, I guess I'm just having trouble with the interest rate + tax benefit versus return available out there. Maybe I'm way off.
Paying interest is just like putting down your car window and throwing your money out the window.
Example: Would you rather pay $210,000 for a house or 265,000 for the same house?
I'll pay the $210,000. Any day.
You think I am able to retire early at 52 by paying massive $$$$$ in interest???
This is why sooooooooo many Americans are in Debt & live paycheck to paycheck!!
Actually their is nothing wrong with paying interest, I don't understand why people are so averse to it. I know their are a lot Dave Ramsey fans around but I don't put much faith into what he says. He is the AA guy of financial advice for the financial worlds version of alcoholics.
IMHO if your mortgage is below 4% you can do better elsewhere so I would carry the note for the full term. Money sitting in a house is dead money, even if its paid off HELOC that money out and put it to work. Now if interest rates were over 10% that advice changes of course.
If you were buying a $210k house and had $210k today instead of throwing it all in a house I'd put $10k down or as little as possible and finance the rest. Because 30 years from now $50k is nothing, that's at today's value which is going to be about half or less in 30 years; but its not terrible difficult to turn $200k into a small fortune in 30 years.
Originally Posted By: 99Saturn
JMO - but even retiring early, I'd still be inclined to carry the debt and invest the cash that would go to paying off a home. I can see the logic versus risk aversion, I guess I'm just having trouble with the interest rate + tax benefit versus return available out there. Maybe I'm way off.
Paying interest is just like putting down your car window and throwing your money out the window.
Example: Would you rather pay $210,000 for a house or 265,000 for the same house?
I'll pay the $210,000. Any day.
You think I am able to retire early at 52 by paying massive $$$$$ in interest???
This is why sooooooooo many Americans are in Debt & live paycheck to paycheck!!
Actually their is nothing wrong with paying interest, I don't understand why people are so averse to it. I know their are a lot Dave Ramsey fans around but I don't put much faith into what he says. He is the AA guy of financial advice for the financial worlds version of alcoholics.
IMHO if your mortgage is below 4% you can do better elsewhere so I would carry the note for the full term. Money sitting in a house is dead money, even if its paid off HELOC that money out and put it to work. Now if interest rates were over 10% that advice changes of course.
If you were buying a $210k house and had $210k today instead of throwing it all in a house I'd put $10k down or as little as possible and finance the rest. Because 30 years from now $50k is nothing, that's at today's value which is going to be about half or less in 30 years; but its not terrible difficult to turn $200k into a small fortune in 30 years.
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