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Life is so short. We retired at 60 with modest pension, health insurance & savings. We have been traveling, hiking, biking, visiting old friends, skiing & relaxing.
IMHO, if you actively manage your money you can easily retire, especially given your wife will still be working for a few more years. I'm planning on retiring it next year at 58 (CANT WAIT - ugh... did a 12 hour day today... one of many these days).
I hope to have $1.5M in cash. I have about 1.2M now in cash and real estate. I'm still not sure I'll get there as it depends on my luck in the stock market (now have $1M with $650K of it in VTUS, MACK, MNKD, APPY plus about $90K in employee stock option equity)... and how much my house and condo will fetch. I'm selling all my real estate. I currently rent here in LA and am a landlord in Atlanta and DC. But I really don't expect to get much out of the real estate... maybe 200K at the most.
I'm planning on putting $1M into a basket of dividend ETFs (I own SDIV, LVL, DWX). I'm hoping to be able to see more than a four percent yield and possibly as high as six after expenses. I would also purchase a hedge (like SH or puts on some ETFs) from time to time.
The other 500K is for active trading. I believe I can easily make at least 10% annually on the 500K, but I'm not counting on it.
I'm a believer that cheap energy drives an economy and the US is just starting to reap the blessings of fracking. Remember cheap oil was a big part of the reason the 90's were the roaring 90's. Within five years the transformation should be in full swing.
That's why living below your means will really help.
How much money do you spend now on an annual basis? It should be pretty simp!e to determine. Just subtract the amount you save from your gross income. That will get you close to how much you spend. You'll then be able to figure how much you need.
That's why living below your means will really help.
How much money do you spend now on an annual basis? It should be pretty simp!e to determine. Just subtract the amount you save from your gross income. That will get you close to how much you spend. You'll then be able to figure how much you need.
"Will have to pay $500. Per month health insurance" for now... we have friends that used to pay $500 a month, now with ACA they have been told beginning next year their bill is $1800 a month. Make sure you can afford a roller coaster ride like that til you are on medicare. Also she is 56 andf plans to work til 60. What if she gets laid off tomorrow? Hey, I have seen it happen. Can you weather it?
It depends. What you need to determine is the amount of money on an annual basis that you currently live on. This includes income taxes and property taxes. When you retire, you will still have to pay income taxes, but that amount could be less.
It depends. What you need to determine is the amount of money on an annual basis that you currently live on. This includes income taxes and property taxes. When you retire, you will still have to pay income taxes, but that amount could be less.
I see what you mean. By subtracting what you save from your gross income, you get what you spend, including income taxes. My thinking was kind of backwards, I now see. I don't think of "spending" money on income taxes because that money is withheld and I never see it. It comes out approximately right when I file.
Therefore, what I "live on" (as I think of it personally) is money for food, housing, transportation, entertainment, clothing, etc., but not income taxes. The spending categories (not including income taxes) are stuff that I can control and modify, whereas taxes will be what they will be and I have very little if any control over them. So I would subtract what I save from net income rather than gross income to get what I spend.
I see what you mean. By subtracting what you save from your gross income, you get what you spend, including income taxes. My thinking was kind of backwards, I now see. I don't think of "spending" money on income taxes because that money is withheld and I never see it. It comes out approximately right when I file.
Therefore, what I "live on" (as I think of it personally) is money for food, housing, transportation, entertainment, clothing, etc., but not income taxes. The spending categories (not including income taxes) are stuff that I can control and modify, whereas taxes will be what they will be and I have very little if any control over them. So I would subtract what I save from net income rather than gross income to get what I spend.
The taxes come directly out of the paychecks, plus we always have to pay even more, so we feel the pain! Sometimes I look at it like buying one or two nice new cars every year with cash, without getting the cars! That's a lot of money out the door! Some of the money is spent well by the government, but most of it is wasted, just like you put stacks of 100 bills in barrel and burned them.
If your retirement income stream is still six figures, it might make enough of a difference to move to a more friendly state for retirement income. Or in our case to snowbird six months plus one day, so that our primary residence state is more tax friendly towards retirement income.
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