Retire at 60 if home is paid off? (pay, million, rate)

[MuscleCar]

My 401k is projected to be 1 million in 20 years, I have an older $300/mo pension due then, and my home will be paid off.

Assuming all goes to plan, can I quit work at 60? I can start withdrawing my 401k and I'll have SS a few years later.

My only plans in life at that age are road trips and camping. My current health numbers are average, I'm a seafood buffet eater and beer drinker, I'll be literally shocked if I live past 80.

[Lacerta]

No one can answer that without knowing your expenses. For example, I live on the cheap end, so if I knew I was going to have $1million by 60 AND a pension AND a paid off house, I'd choose to retire at 55 with less and be perfectly fine. But if you live in NYC or LA and intend to stay there in retirement, you probably need to keep working.

[Quietude]

Quit work, sure. Stop earning income, at least some? Maybe not. But then, I loathe the conventional notion of retirement anyway; I think life should be more linear, even if it's a declining curve of effort and income.

I always remember that Mickey Mantle's father and grandfather died at 37 or so, so he burned out every battery by the time he was 40, not expecting to live longer. While it would be nice to have your last dollars spent on your urn, I think some cushion or extension for longer-than-expected life is a good idea.

But by all means plan to work at something that pleases you at 60, even if it wouldn't have supported your earlier life. I suggest you'll get very tired of driving around and camping in a lot less than the rest of your life.

[wheelsup]

Conventional wisdom says once you hit a 4% withdrawal rate that meets your monthly/yearly spending amounts you are done and financially independent.

Example. Your yearly spending is $36k. A $1m portfolio will generate $40k a year plus adjust for inflation. So you're done. You can either quit working or find a job you like more or whatever you want at that point.

[mathjak107]

keep in mind that is only true providing they are willing to keep at least 40% in equities or so . all bets are off if they are going fixed income or plan on lower equity levels .

the 4% rule is not based on all allocations , it has a certain minimum equities requirement

[49erfan916]

i would be worried about a million dollars in calfornia even if with a paid off house. What if my accounts crash like in 2008?

My personal expenses would be about 1900 a month without the mortgage and I'm single. If i antiicipate kids/grandkids, then my expenses would be more.

i rread somewhere that you should have enough income to cover 80 percent of your current expenses.

[mysticaltyger]

Originally Posted by 49erfan916

i would be worried about a million dollars in calfornia even if with a paid off house. What if my accounts crash like in 2008?

I think that's reasonable to think about even if you don't live in CA. Even if inflation is modest, $1M isn't going to buy as much in 20 years.

Originally Posted by 49erfan916

I read somewhere that you should have enough income to cover 80 percent of your current expenses.

Those articles that say that are kinda stupid and too one-size-fits-all, though. It really depends on a lot of factors. One of the biggest is your savings rate. If you save more than 20% of your income, then you probably won't actually need 80% of your income in retirement. It depends more on your savings rate and future living expenses than anything.

[Quietude]

I just RFC'ed and noted you're around 40. I'd say keep socking it away at whatever rate is comfortable for you with that solid cushion, keep it in fairly safe, lower-growth investments, and get back to the issue in about 15 years.

[petch751]

Don't forget inflation. When I was younger $1 M was considered rich, today, although not bad, it's not rich. What will $1M be able to buy or pay for when you retire.

[mysticaltyger]

Bottom line is you need 25X your living expenses saved/invested, with at least 40% in stocks.