I want to retire at 55, and drive all over the country to all the State/Federal parks.
What should my retirement look like for this to happen?
What should my retirement look like for this to happen?
What should I have to comfortably retire at 55?
- Thread starter Vern_in_IL
- Start date
What’s your age and situation like now?
Honestly, no regrets here, did my 20 in federal law enforcement and then relaxed my schedule and stress levels by becoming a campus cop.
If you’re young enough, federal LE can’t be beat.
Honestly, no regrets here, did my 20 in federal law enforcement and then relaxed my schedule and stress levels by becoming a campus cop.
If you’re young enough, federal LE can’t be beat.
Rule of thumb is, withdraw no more than 4% from retirement, so that it lasts. I’m not sure if that assumes a principal that does not drop, but a diversified portfolio with a few years expected spending in cash certainly won’t track the market.
Too early for SS so I would wager 25x whatever you want to spend per year. You may have to increase that for health insurance, as I suspect that will increase sharply. Or you may find ways to live cheaper than you do today, dunno.
Once you hit 62 you could claim SS but it would be reduced, not only from taking early bit also (possibly?) from not having 35 years paid in. Not sure on that, but you certainly won’t have SS for 7 years.
Now could you draw more than 4% for those 7 years, then drop down to 4% once you claim SS? I don’t see why not, but this may be some fun math to do.
But no other info, I’d swag it at 25x.
Too early for SS so I would wager 25x whatever you want to spend per year. You may have to increase that for health insurance, as I suspect that will increase sharply. Or you may find ways to live cheaper than you do today, dunno.
Once you hit 62 you could claim SS but it would be reduced, not only from taking early bit also (possibly?) from not having 35 years paid in. Not sure on that, but you certainly won’t have SS for 7 years.
Now could you draw more than 4% for those 7 years, then drop down to 4% once you claim SS? I don’t see why not, but this may be some fun math to do.
But no other info, I’d swag it at 25x.
Lemme think…
If SS gives you 25% at age 62 (taking early and missing a few years), then your portfolio has to give 75%. I come up with 19x saved at 62?
But note, you were taking 100% from age 55 to 62, so 7 more years on top of that. That’s 26x saved up at age 55, so as to have same spending habits.
I’d be curious what others come up with math here, financial stuff isn’t my strong suit.
If SS gives you 25% at age 62 (taking early and missing a few years), then your portfolio has to give 75%. I come up with 19x saved at 62?
But note, you were taking 100% from age 55 to 62, so 7 more years on top of that. That’s 26x saved up at age 55, so as to have same spending habits.
I’d be curious what others come up with math here, financial stuff isn’t my strong suit.
Vern, what makes you ask this question? On Bitog, we can expect Dave Ramsey type answers and answers saying become a cop or firefighter/EMD. But who are you? And also, be realistic.
AZjeff
$50 Site Donor 2023
Only you and your financial person can answer that with any amount of validity.
I was thinking about this the other day, wondering. I heard someone recently say $2 million in an average area in cash. Dunno.
Here's my way of thinking, attempting to adjust for inflation. Try to determine what you have earned in your life, do some basic estimates on adjusting for inflation, and a proportional amount of time you earned, vs. remaining time. Example.
Say from 20-65 you earned $2 million and had a comfortable lifestyle you'd like to maintain. That's $2 million over 45 years, about $45,000 annually on average.
Now extrapolate that with constant dollars from 65 thru 90 in retirement. That's 25 years x $45,000, or $1,250,000 adjusted for inflation, interest bearing, etc. Of course some further plus or minus numbers can be run based on variables.
Deduct, if you own your house and have no mortgage, inexpensive vehicles owned outright, kids are off on their own, you plan to scale back expenses and travel, commuting, dry cleaning suits, etc. Will you be doing DIY projects, or hiring professionals to fix every little thing? Big difference. Will hobbies be bird watching and gardening (cheap), or golf and traveling and gambling (expensive)? Add if you have significant medical expenses or want to increase your lifestyle, or have expensive hobbies like golfing and gambling, etc.
Someone who made $2 mil in his working life, paid off a house and cars, and has no major expenses and good healthcare, could probably survive comfortably on a adjusted liquid $1 million in his last 25 years. You'd be living on $40,000 annually, which fixes one to a reasonable budget but not particularly hard if the house and cars are paid off. Figure one will also ideally get another roughly $1000 per month in SS, so that's a supplement of $300,000 in the last 25 years. So that's closer to living on $50k annually, very do-able in a normal geographical environment with modest expenses. So if you can have a liquid million in this example, that's earning interest, and have a SS kicker to help, probably be okay.
Now this goes out the window with runaway inflation that is eating everything up, national bankruptcy, a bankrupted SS system, global war, etc. But we can't really do much about that.
Someone who is going to do a lot of RV traveling, would have to figure a whole different set of costs, are you maintaining a house and RV traveling, fuel prices, eating on the road is more expensive, etc.
Here's my way of thinking, attempting to adjust for inflation. Try to determine what you have earned in your life, do some basic estimates on adjusting for inflation, and a proportional amount of time you earned, vs. remaining time. Example.
Say from 20-65 you earned $2 million and had a comfortable lifestyle you'd like to maintain. That's $2 million over 45 years, about $45,000 annually on average.
Now extrapolate that with constant dollars from 65 thru 90 in retirement. That's 25 years x $45,000, or $1,250,000 adjusted for inflation, interest bearing, etc. Of course some further plus or minus numbers can be run based on variables.
Deduct, if you own your house and have no mortgage, inexpensive vehicles owned outright, kids are off on their own, you plan to scale back expenses and travel, commuting, dry cleaning suits, etc. Will you be doing DIY projects, or hiring professionals to fix every little thing? Big difference. Will hobbies be bird watching and gardening (cheap), or golf and traveling and gambling (expensive)? Add if you have significant medical expenses or want to increase your lifestyle, or have expensive hobbies like golfing and gambling, etc.
Someone who made $2 mil in his working life, paid off a house and cars, and has no major expenses and good healthcare, could probably survive comfortably on a adjusted liquid $1 million in his last 25 years. You'd be living on $40,000 annually, which fixes one to a reasonable budget but not particularly hard if the house and cars are paid off. Figure one will also ideally get another roughly $1000 per month in SS, so that's a supplement of $300,000 in the last 25 years. So that's closer to living on $50k annually, very do-able in a normal geographical environment with modest expenses. So if you can have a liquid million in this example, that's earning interest, and have a SS kicker to help, probably be okay.
Now this goes out the window with runaway inflation that is eating everything up, national bankruptcy, a bankrupted SS system, global war, etc. But we can't really do much about that.
Someone who is going to do a lot of RV traveling, would have to figure a whole different set of costs, are you maintaining a house and RV traveling, fuel prices, eating on the road is more expensive, etc.
D
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gathermewool
Site Donor 2023
My car is making a weird noise. What do you guys think it is?
Why come at us with such an important life question and give zero details?
Why come at us with such an important life question and give zero details?
Being able to rent your house while you are travelling is good way to offset the travel costs. I would get a van as well, comfortable to live in for 1 or 2, and small enough to go into the cities as well. Dragging around a trailer for 2 people seems like a PITA to me unless you do some soft roading adventures.
Assuming no additional information and going strictly by statistics, you'll live an additional 35 years. RV lifestyle will require an RV sufficient to actually live in, whether a towable one and a truck or otherwise. Probably will need a couple over the 35 years. Call it $500,000 cash, and $10,000 annually for fuel and maintenance (forget DIY on the road). Food, lots of eating out. Another $10,000 annually. Average medical, no idea so add that later.
Just for the travel and food for 35 years, that's $700,000 in constant dollars. Add the RV $500,000, you'll need minimum $1.3 million. Add any unusual medical or other expenses on top. I don't know how much SS a person might get retiring at 55 but guessing not much.
Projected monthly income minus projected monthly expenses. It ain't rocket science.
JHZR2
Staff member
And what’s the matter with either?
JHZR2
Staff member
I come back to needing about $5M, so that when earning 3-5% in safer investments, you can have a reasonable income from the interest.
What you don’t want is an early drawdown, because long term inflation and other factors can create major issues. The earlier you retire, the less reliant on draw down, more reliant on interest/passive income from the assets you should be, imo…
What you don’t want is an early drawdown, because long term inflation and other factors can create major issues. The earlier you retire, the less reliant on draw down, more reliant on interest/passive income from the assets you should be, imo…
I retired at 62 first thing is you payoff everything so that you are debt free. House, cars, RV everything. Then you'd better have a couple million in savings. A good retirement a 401K and a ROTH IRA and oh and affordable health insurance!
You can spend down the principal/nest egg when you get older but if you take 5% per year of the nest egg, the egg keeps getting smaller each year.
My financial guys tell me that they can only tell me the numbers. They can't determine if I want to work longer and have a nicer/shorter retirement or retire earlier with a more modest retirement. That's up to me to decide. To retire at 55 and live the live of leisure takes a several million dollars.
JHZR2
Staff member
Sure you can. And then the divvy/interest drops, so it accelerates the drawdown. A self-perpetuating issue.
Not something I’d want to think about anytime soon if I was retiring at 55.
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