What's Your Number? (For Retirement)

[I_H8_Crawford]

Just curious with all of the talk of (the lack of) fiscal responsibility in the politics thread - if you were to retire tomorrow, what would you want to have set aside to do so?

Me - I want $2.5 M in liquid assets + a paid off house. Then even at a modest 5% return, that is giving me $125K/year with my biggest expense taken care of.

Bonus question - what do you consider rich/wealthy? Me - I would say anyone with a net worth (excluding primary residence) of $5 Million+ is rich.

[mrkajz44]

I think I'm a little too young to have specific totals - too much can change between now and my retirement that would affect what number I need to get to. I will say that your number is probably quite high for what I'd think most people can achieve. A retirement income of $125K without depleting any principle seems almost excessive and unrealistic for most.

Bonus question: Rich/wealthy to me is not at all about how much money or net worth you have. It's all about how easy it is to spend when you need to spend. I would consider myself wealthy in the sense that I don't really worry much about where the money is going to come from to pay for a vacation, a new kitchen appliance, a major car repair, etc. That doesn't mean I'm spending a ton of money on these things - I'll work to live within my means. But for me, having very little financial stress = rich.

[BlackArcher101]

I plan on moving somewhere extremely cheap on a retirement visa and opening my own little business to continue working through retirement. There is no way I'll be able to do a typical north american retirement.

[blankall]

Originally Posted by mrkajz44

I think I'm a little too young to have specific totals - too much can change between now and my retirement that would affect what number I need to get to. I will say that your number is probably quite high for what I'd think most people can achieve. A retirement income of $125K without depleting any principle seems almost excessive and unrealistic for most.

I think the $125k+ return without depleting capital and no rent is very unrealistic for most...it's certainly a dream. I can't imagine there are many people who wouldn't want to take that deal. You'd have to be very into your work (or I guess certain luxury items) to want to continue working with no rent and $10k/month coming in.

For most people, it's more about just being able to retire at all.

[iggy_oi]

Originally Posted by I_H8_Crawford

Bonus question - what do you consider rich/wealthy? Me - I would say anyone with a net worth (excluding primary residence) of $5 Million+ is rich.

$5M+ net worth at retirement or during their career?

[I_H8_Crawford]

Originally Posted by iggy_oi

$5M+ net worth at retirement or during their career?

I'd say if someone has $5mil+ net worth at any point in their lives they are rich.

[calumniate]

My plan is to live in a shed on PEI. Currently looking pretty feasible! Have a nice plot.. just need a saw and potentially Fuzz and the other garage enthusiasts.

[RichieRich]

Some folks may follow the rule of 4%, some perhaps as high as 5%. For those who don't understand what this means is that you don't want to withdraw more annually than your typical annual return.

So... the inverse of 4% (0.04) is 25. This basically means your total nest egg (capital) should be at least 25x your annual spend/budget. So if you want to spend $60k/yr (before) tax, then 60x25= $1.5MM required. Of course if you get pension, OAS, CPP then that also affects your magic number. I'd love to have more than $100k annually in retirement however that's unlikely.



Rich vs Wealthy? Rich may still have a rough budget, whereas Wealthy really can spend a few $100k yearly without any concerns of drawdown. An arbitrary number would be ~$3-5MM versus $10MM+ respectively.


Here's an excellent website (which I've posted before) that lets you go down that rabbit hole of estimating your spend as well as acturial-based review of your investment odds, lifespan, etc... quite a few other links on this site that are awesome:
https://engaging-data.com/will-money-last-retire-early/

[Weitz]

Don’t have a number in mind yet.

World will be in a very different/likely not as good spot in 20-30 years. No sense in planning for something that may look significantly different than it does now. Not saying there is no saving going on though.

[topfiverecords]

$20,000 and a commercial van.

[troutman]

Originally Posted by I_H8_Crawford

Just curious with all of the talk of (the lack of) fiscal responsibility in the politics thread - if you were to retire tomorrow, what would you want to have set aside to do so?

Me - I want $2.5 M in liquid assets + a paid off house. Then even at a modest 5% return, that is giving me $125K/year with my biggest expense taken care of.

Bonus question - what do you consider rich/wealthy? Me - I would say anyone with a net worth (excluding primary residence) of $5 Million+ is rich.

On average, not so many of my clients near retirement have estates more than $2M.

[stone hands]

1M, we save well over 50% of our income and live a pretty simple lifestyle. 4% withdrawl rate once we hit that number in the next decade gives us enough passive income to exist indefinitely. once our mortgage is paid off around the same time, our monthly expenses drop about half. looking to retire by our early 40s



not a lifestyle a lot of people are comfortable with, but hey, works for us

[Fighting Banana Slug]

My dream scenario is pretty close to the OP. The ability to generate 100k-140k through whatever sources (which I think would be in the $2.5 mil range).

I actually like what I am doing, so if that means working to around 70, I am ok with that. Just hoping for good health and then a good retirement. No interest in scraping by and hoping that my money outlasts me.

[Jason14h]

Originally Posted by Weitz

Don’t have a number in mind yet.

World will be in a very different/likely not as good spot in 20-30 years. No sense in planning for something that may look significantly different than it does now. Not saying there is no saving going on though.

"Likely not as good spot in 20-30 years"

Why do you say that? Has the world ever gotten worst over any 30 years period? And does it really change that much from a retirement standpoint?

20 years ago was 2001. Are things dramatically different? How about from 1991.

You need a home, food, medical and entertainment $. If anything those (other then housing) should relatively come down in price as technology advances

[Timbo]

I say retirement like Jim Mora said “playoffs”.

[undercoverbrother]

My retirement plan is to move somewhere that my dollar really have buying power, somewhere like Sudan or Somalia.

I'd get me a pack of 30 dudes with AK's and white Toyotas to guard my compound.

[Fighting Banana Slug]

Originally Posted by undercoverbrother

My retirement plan is to move somewhere that my dollar really have buying power, somewhere like Sudan or Somalia.

I'd get me a pack of 30 dudes with AK's and white Toyotas to guard my compound.

Very low chance of outliving your savings.

[undercoverbrother]

Originally Posted by Fighting Banana Slug

Very low chance of outliving your savings.

Yeah but what a way to go out!

[pseudoreality]

Originally Posted by undercoverbrother

My retirement plan is to move somewhere that my dollar really have buying power, somewhere like Sudan or Somalia.

I'd get me a pack of 30 dudes with AK's and white Toyotas to guard my compound.

I was planning on getting a hobby farm in the Annapolis Valley, but that does sound appealing.

I'm actually taking some retirement planning training right now. It's for people with federal public sector pensions and it is crazy long at 6 x 3 - 3.5 hour sessions.

Back to my hobby farm, my wife and I are looking at maybe accelerating it so we are still able-bodied on the farm. It might mean I should start a consulting firm earlier than planned.

[CroFlames]

Originally Posted by I_H8_Crawford

Just curious with all of the talk of (the lack of) fiscal responsibility in the politics thread - if you were to retire tomorrow, what would you want to have set aside to do so?

Me - I want $2.5 M in liquid assets + a paid off house. Then even at a modest 5% return, that is giving me $125K/year with my biggest expense taken care of.

Bonus question - what do you consider rich/wealthy? Me - I would say anyone with a net worth (excluding primary residence) of $5 Million+ is rich.

I'm curious what you would do with $125k in retirement when your only expense is utilities, property tax and insurance? I make no judgments.

If I had that kind of dough in retirement, I'm likely getting into some exotic cars. But I highly doubt I get to 2.5MM in assets not including the house.